Survival of the fittest: understanding the effectiveness of update speed in the ecosystem of software platforms

Abstract

ABSTRACTThe ecosystem of software platforms is emerging as a dominant model for software-based services. Following the trend of open innovation, platforms extend product boundaries by encouraging many complementary apps to join them and organize an innovation ecosystem to satisfy the needs of heterogeneous users. In such innovation ecosystems, apps update and evolve continuously. Considering the ubiquitous nature of software updates, scholars have examined the impact of updates on the diffusion and market performance of focal software. However, few studies examined the moderators for the effectiveness of update speed. Apps, like organisms, do not exist in a vacuum. The success of one app depends not just on its own efforts but also on its interaction with other innovations in the ecosystem. Informed by the ecology theories, this study theorizes how the effectiveness of app update speed is influenced by ecological factors. Using longitudinal data about apps in a browser platform, we obtain several important insights. First, update speed has a significant positive effect on app performance. Second, frequent platform update and intraspecific competition weaken the effectiveness of update speed. Third, interspecific mutualism and developer capability strengthen the effectiveness of update speed. This study contributes by advancing the overall understanding of value software updates as well as providing novel insights about the interdependence in innovation ecosystems.