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Parker and Van Alstyne's seminal paper explores two-sided network effects in information markets, demonstrating how firms can strategically offer products for free by leveraging distinct markets of content providers and end consumers. Their model reveals that by understanding network externalities, companies can increase consumer welfare and firm profits simultaneously through sophisticated product coupling and pricing strategies. The research provides critical insights into how digital platforms like operating systems and internet browsers create value by balancing the needs of different user groups, effectively explaining the economic logic behind seemingly counterintuitive business models that offer core products at zero cost.

The discussion begins with positive network externalities, which are broken down into three key factors: accumulation, variety, and utility. Accumulation describes how interconnected items on a platform, such as Wikipedia articles, create value. Variety refers to the value generated by diverse complements, exemplified by apps in an app store. Utility represents the immediate value a platform offers, like an Uber ride. We then explore the concept of negative network externalities, which occur when positive effects become excessive. These include rivalry from increased user numbers, choice overload due to excessive variety, fragmentation from over-accumulation, and value degradation resulting from poor utility....

Baldwin and Clark's "Design Rules, Volume 1" explores how modular design transforms technological innovation. The book reveals how breaking complex systems into independent, interconnected components enables faster, more flexible technological development. By analyzing design architectures, the authors demonstrate how modularity reduces complexity, accelerates innovation, and provides strategic advantages across technological domains.

This podcast episode features Wim Vanhaverbeke, a digital strategy and open innovation expert, discussing digital platforms and their impact on open innovation. Vanhaverbeke explains his perspective on platforms as business models facilitating interactions, highlighting the complexities of multi-sided B2B platforms compared to two-sided models. He details how digitalization and AI enhance open innovation, offering examples of companies using platforms internally and externally for innovation. The conversation further explores the challenges managers face adapting to these evolving platform dynamics and the crucial role of data sharing in overcoming adoption barriers, particularly within regulated sectors like healthcare. Finally, Vanhaverbeke discusses future research...

Join us as we analyze the complex dynamics of markets shaped by network effects. We'll investigate how compatibility decisions and sponsorship influence technology adoption and how the presence of two-sided platforms creates unique challenges and opportunities. To shed light on these critical market forces, we draw from the work of Katz and Shapiro (1985, 1986) and Rochet and Tirole (2003).

This conversation with Andrei Hagiu explores the power dynamics between platforms and participants, highlighting platform traps where dominant platforms can exert control over sellers. The discussion also considers the potential of blockchain technology to decentralize platforms and create more equitable business models.

In The Interaction Field, management expert and professor Erich Joachimsthaler explains that the only way to thrive in this environment is through the Interaction Field model. Companies who embrace this model generate, facilitate, and benefit from data exchanges among multiple people and groups -- from customers and stakeholders, but also from those you wouldn't expect to be in the mix, like suppliers, software developers, regulators, and even competitors.

Platform cooperatives reimagine a world where domestic workers can double their income by establishing their platform. On this internet, platforms such as Twitch, Twitter, and Roblox are owned by their streamers, users, and creators. What if small fishing communities in Mexico or farmers in Kerala had the power to determine what data they collected about their work and how they utilized that data?

Platform cooperatives are not a figment of the romantic imagination, but rather a reality transforming industries today. Collectives that leverage technology offer an urgent and practical solution to shift how businesses are owned and controlled, allowing workers...

"Ecosystems represent potentially the best organizational model for the future of organizations."
Mark Greeven

Enterprise information systems (EIS) have been important enablers of business cross-functional processes since the 1990s. Often referred to as enterprise resource planning (ERP) systems, they were extended in line with electronic businesses for integration with suppliers and customers. Today, EIS architectures comprise, not only, ERP, supply chain, and customer relationship management systems, but also, business intelligence and analytics. We open the discussion piece by discussing how decentralization dynamics impact EIS and how such dynamics must be controlled but also harnessed to make future EIS more efficient and useful.