The Interplay of Power and Trust in Platform Ecosystems of the Enterprise Application Software Industry

In recent years, the formerly oligopolistic Enterprise Application Software (EAS) industry began to disintegrate into focal inter-firm networks with one huge, powerful, and multi-national plat-form vendor as the center, surrounded by hundreds or even thousands of small, niche players that act as complementors. From a theoretical point of view, these platform ecosystems may be governed by two organizing principles - trust and power. However, it is neither from a practical nor from a theoretical perspective clear, how trust and power relate to each other, i.e. whether they act as complements or substitutes. This study tries to elaborate our understanding of the relationship of trust and power by exploring their interplay using multi-dimensional conceptual-izations of trust and power, and by investigating potential dynamics in this interplay over the course of a partnership. Based on an exploratory multiple-case study of seven dyadic partner-ships between four platform vendors, and seven complementors, we find six different patterns of how trust and power interact over time. These patterns bear important implications for the suc-cessful management of partnerships between platform vendors and complementors, and clarify the theoretical debate surrounding the relationship of trust and power.

The Emergence of Partnership Networks in the Enterprise Application Development Industry - A Global Corporation Perspective

Currently, dramatic changes are happening in the IS development industry. The incumbent system developers (hubs) are embracing partnerships with less well established companies (spokes), acting in specific niches. This paper seeks to establish a better understanding of the motives for this strategy. Relying on existing work on strategic alliance formation, it is argued that partnering is particularly attractive, if these small companies possess certain capabilities that are difficult to obtain through other arrangements than partnering. Again drawing on the literature, three categories of capabilities are identified: the capability to innovate within their niche, the capability to provide a specific functionality that can be integrated with the incumbents’ systems, and the capability to address novel markets. These factors are analyzed through a case study. The case represents a market leader in the global IS development industry, which fosters a network of smaller partner firms. The study reveals that temporal dynamics between the identified factors are playing a dominant role in these networks. A cyclical partnership model is developed that attempts to explain the life cycle of a partnership within such a network.