New Publication in Information Systems Research: “Strategic Drivers of Core Expansion on Software Platforms”
Software platforms rely on a core-periphery structure: platform owners provide a core product (such as the iOS operating system), which external developers extend with complementary software (e.g., “apps” like Whatsapp). While this structure creates strong incentives for cooperation, platform firms like Apple intermittently expand their core, for instance, by integrating flashlight features or screen-time tracking into iOS. This study explores the question: why do platform owners expand into niches, apparently at the expense of their developers, if the ecosystem thrives on cooperation?
The central findings of the article are:
- Core expansions systematically target underperforming niches, those characterized by low user satisfaction, limited innovation activity, and high market concentration.
- The decision of whether an expansion occurs as a standalone app or as an integrated core feature is systematically linked to the specific characteristics of the respective niche.
By linking niche characteristics to expansion strategies, this study provides actionable guidance for the regulation and management of evolving software platforms.
The article is available (open access) here.