European Journal of Information Systems

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Dynamic capabilities for transitioning from

product platform ecosystem to innovation
platform ecosystem

Kazem Haki, Michael Blaschke, Stephan Aier, Robert Winter & David Tilson

To cite this article: Kazem Haki, Michael Blaschke, Stephan Aier, Robert Winter & David
Tilson (2024) Dynamic capabilities for transitioning from product platform ecosystem to
innovation platform ecosystem, European Journal of Information Systems, 33:2, 181-199, DOI:
10.1080/0960085X.2022.2136542

To link to this article: https://doi.org/10.1080/0960085X.2022.2136542

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EUROPEAN JOURNAL OF INFORMATION SYSTEMS
2024, VOL. 33, NO. 2, 181–199
https://doi.org/10.1080/0960085X.2022.2136542

RESEARCH ARTICLE

Dynamic capabilities for transitioning from product platform ecosystem to

innovation platform ecosystem
a
Kazem Haki , Michael Blaschkeb, Stephan Aierb, Robert Winterb and David Tilsonc
a
Geneva School of Business Administration (HES-SO, HEG-Genève), Geneva, Switzerland; bInstitute of Information Management, University
of St Gallen, St Gallen, Switzerland; cSimon Business School, University of Rochester, Rochester, New York, USA

ABSTRACT ARTICLE HISTORY

Over recent decades, many platform-native start-ups and firms were founded and some are Received 15 May 2020
now among the world’s most valuable. This study, however, focuses on an incumbent firm Accepted 28 September 2022
transitioning from a long established product platform ecosystem to an innovation platform KEYWORDS
ecosystem in response to the platform-natives’ threats of disruption. We specifically investigate Product platform; innovation
the dynamic capabilities needed by the incumbent firm in an enterprise software ecosystem in platform; enterprise software
the transition phase. Our analysis builds on multi-perspective empirical data covering the ecosystem; dynamic
viewpoints of all the actor types in the ecosystem, i.e., platform owner, platform partners, capability; case study
and end-user firms. The results imply the necessity of four dynamic capabilities: resource
curation, ecosystem preservation, resource reconfiguration, and ecosystem diversification.
With this study, we contribute to the emerging literature on the incumbent firms’ transition
to a new ecosystem organising logic, and extend the study of dynamic capabilities specifically
for the case of transitioning to innovation platform ecosystems.

1. Introduction extension, and customisation of the packaged software

The considerable attention to digital platforms in to the individual requirements of end-user firms (Ng
information systems (IS) research and other disci­ & Gable, 2010; Staehr et al., 2012). New entrants to the
plines (e.g., Cennamo & Santaló, 2019; Rietveld & enterprise software industry (e.g., Salesforce,
Schilling, 2021; Thomas et al., 2014; Tilson et al., Workday) offered cloud-based (vs. on-premises) plat­
2010) can be explained by platform-native start-ups forms. By design, their platforms were more accessible
disrupting the long established industry arrangements to third-party developers, allowing a wider range of
and challenging the incumbent firms’ positions in partners to innovate new solutions building on the
their industries (de Reuver et al., 2018). For example, functionalities offered by these innovation platforms.
Uber has transformed the taxi business without own­ Some incumbent enterprise software vendors
ing taxis, Airbnb has transformed hospitality without responded to the threats of disruption by transitioning
owning hotels, and Kickstarter has channelled funding from their traditional technological configurations
to creative projects that would have otherwise (product platforms) and business models (product
struggled to get the attention of traditional investors. platform ecosystems) to innovation platforms and
Since platform-natives are the most salient firms in building much expanded ecosystems around them
the platform economy (Kenney & Zysman, 2016; (Ceccagnoli et al., 2012; Schreieck et al., 2022). We
Parker et al., 2016), it is not surprising that prior adopt the terms product platform and innovation plat­
research has primarily emphasised such cases (e.g., form (and their associated ecosystems) for the techno­
Cennamo & Santaló, 2019; Eaton et al., 2015; Huang logical configurations before and after the transition
et al., 2017; Oh et al., 2015; Tan et al., 2015). However, building on prior literature (e.g., Gawer, 2009) and a
enterprise software are also important platforms that recent work studying the same type of transition1
are gaining increasing attention from IS scholars (e.g., (Schreieck et al., 2022). This recognises that product
Ceccagnoli et al., 2012; Foerderer et al., 2019; Huber et platforms in industries such as enterprise software,
al., 2017; Schreieck et al., 2021, 2022). Enterprise soft­ banking, and insurance can be digital in nature,
ware is an interesting setting in the platform economy while also distinguishing them from innovation plat­
since their vendors (e.g., Oracle, SAP) have long forms that enable greater production, transaction, and
offered product platforms (in the form of on-premises, innovation leverage (Thomas et al., 2014) and facil­
packaged software) supported by an ecosystem of itate increased generativity (Tilson et al., 2010).
partners (Sarker et al., 2012; Shang & Seddon, 2002). The transition from product platform to innovation
Partners were engaged in the implementation, platform ecosystems implies that incumbent firms

CONTACT Kazem Haki [email protected] Geneva School of Business Administration (HES-SO, HEG-Genève), Geneva, Switzerland
© 2022 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group.
This is an Open Access article distributed under the terms of the Creative Commons Attribution-NonCommercial-NoDerivatives License (http://creativecommons.org/licenses/by-
nc-nd/4.0/), which permits non-commercial re-use, distribution, and reproduction in any medium, provided the original work is properly cited, and is not altered, transformed, or
built upon in any way.
182 K. HAKI ET AL.

turn their focal resource from a product platform to an platform ecosystems is a long and tedious process in
innovation platform, fostering complementary inno­ which incumbent firms need to operate the innovation
vations in the ecosystem (Schreieck et al., 2022). This platform business and the traditional business sepa­
transition is manifest in the idea of “inverted firms” rately while trying to integrate them to increase syner­
(Parker et al., 2017). That is, incumbent firms leverage gies (Matzner et al., 2021). When transitioning,
an ecosystem of external parties instead of only relying incumbents must alter established roles in the ecosys­
on their internal resources, and orchestrate the output tem, including significant shifts in strategic direction
of others instead of merely producing their own out­ and structure. It can create high uncertainty and dis­
put (Parker et al., 2017; Thomas et al., 2014). In doing rupt the position of actors, and thereby re-specify the
so, the traditional principal – agent relationships in ecosystem’s fitness landscape (Kapoor & Agarwal,
supply chains are replaced by arms’ length relations 2017). Incumbents make choices that might render a
between the incumbent firms and their partners (de substantial portion of their resource base obsolete and
Reuver et al., 2018; Eaton et al., 2015; Ghazawneh & impact (or destroy) their relationships with their part­
Henfridsson, 2013). Further, the value propositions ners and end-users (Ozalp et al., 2018). They face
shift from standalone offerings by each ecosystem considerable challenges because of their attachment to
actor to integrated solutions jointly created by a multi­ the old logic (product platform) and because the exist­
tude of ecosystem actors (Stonig et al., 2022). The ing operational capabilities align with the ecosystem’s
transition from product platform to innovation plat­ traditional organising logic. In dealing with the chal­
form ecosystems thereby entails distinct ecosystem lenges entailed in the transition phase, we posit that
organising logics: maximising the focal firm’s value dynamic capabilities can provide the capacity to extend
appropriation vs. increasing the value of all firms in and modify incumbents’ extant resource base (Helfat &
the ecosystem; controlling a focal firm’s unique Raubitschek, 2018; Karimi & Walter, 2015; Teece, 2007;
resources vs. leveraging the evolution of multi-partner Winter, 2003) to purposefully make the transition.
innovation; and improving the cost and quality of Therefore, we seek to answer the following research
standalone offerings vs. innovating to generate inte­ question: what dynamic capabilities do incumbent firms
grated solutions (Stonig et al., 2022). need to make transition from a product platform to an
Incumbent firms’ transition to an innovation plat­ innovation platform ecosystem?
form ecosystem requires them to enable additional Similar to existing studies’ dominant focus on plat­
sources of platform leverage (Thomas et al., 2014) form-native cases, current research mainly offers
and to shift the locus of innovation on the platform dynamic capabilities for such cases (Helfat &
(Sandberg et al., 2020; Thomas et al., 2014; Yoo et al., Raubitschek, 2018; Tan et al., 2015; Teece, 2017), with
2010). They open up access to their focal resource (the a few notable exceptions (Schreieck et al., 2021).
product platform) to loosely coupled partners and Instead, our study focuses on dynamic capabilities for
build well-defined interfaces and common develop­ transitioning from a product platform to an innovation
ment kits, such that the resultant innovation platform platform ecosystem, requiring deft reconfiguration of
serves as a foundation upon which a large number of existing resources and prudent redefinition of existing
partners can jointly develop innovations in the form of roles and capacities. We investigate a thriving enter­
integrated solutions (Cusumano et al., 2019). prise software ecosystem through multi-perspective
In general, the transition from product platform to empirical data from all its actors, i.e., platform owner,
innovation platform ecosystems involves a bandwa­ platform partners, and end-user firms. The studied case
gon effect (e.g., Sandberg et al., 2020; Stonig et al., reveals the challenges encountered by each ecosystem’s
2022; Svahn et al., 2017). The few incumbent firms actors during the transition phase, the employed
that make successful transitions enjoy enormous mechanisms by the platform owner to overcome the
returns and competitive positions, while many others challenges, as well as the effects and the factors that
fail (Gawer & Cusumano, 2008; Hagiu & Altman, moderate the effects of the platform owner’ actions
2017; Yoffie et al., 2019; Zhu & Furr, 2016). In the during transition. Building on the empirical data, we
transition phase, incumbent firms encounter many derive and differentiate four dynamic capabilities
challenges such as deploying a strategic reorientation required for transitioning to an innovation platform
from product thinking to platform thinking (Matzner ecosystem, namely resource curation, ecosystem preser­
et al., 2021), attracting their existing partners to the vation, resource reconfiguration, and ecosystem diversi­
innovation platform (Schmid et al., 2021; Svahn et al., fication along with their constituent antecedents,
2017), addressing the complexity of interactions in the mechanisms, consequences, and moderators.
ecosystem (Sandberg et al., 2020), and managing iden­
tity tension between the old and the emerging ecosys­
2. Research foundations
tem organising logics (Lindgren et al., 2015).
In effect, the latter challenge points to the fact that, In this section, we first introduce product platform
transition from product platform to innovation and innovation platform ecosystems. Subsequently,
 EUROPEAN JOURNAL OF INFORMATION SYSTEMS 183

we position our study through investigating dynamic loosely coupled to the platform (Cusumano et al.,
capabilities for transitioning to innovation platform 2019; Gawer, 2014; Tiwana et al., 2010). An innovation
ecosystems. platform employs mechanisms such as standardised
interfaces to facilitate co-creation of integrated yet
reusable solutions (Ceccagnoli et al., 2012; Tiwana,
2.1. Product platform and innovation platform 2015); flexible boundary resources (e.g., APIs, SDKs)
ecosystems to cultivate the development of solutions (Ghazawneh
An ecosystem is a community of interacting firms that & Henfridsson, 2013); multi-sided recommender sys­
are not hierarchically controlled and that depend on tems to tame challenges of generating solutions
one another for their overall effectiveness and survival (Malgonde et al., 2020); and knowledge sharing and
(Jacobides et al., 2018; Lusch & Nambisan, 2015). An seeding channels to stimulate the development of
ecosystem can be shaped around a product platform solutions (Huang et al., 2018; Zhang et al., 2022).
or an innovation platform. Innovation platforms function as the nexus of inno­
A product platform is a focal resource (e.g., an on- vation platform ecosystems. The latter is a complex
premises, packaged enterprise software) provided by ecology of firms that jointly create integrated solutions
the principal firm in an ecosystem upon which part­ on the platform (Cennamo & Santaló, 2019; Jacobides
ners develop complementary extensions (Schreieck et et al., 2018). In an innovation platform ecosystem,
al., 2022). Accordingly, a product platform ecosystem while the platform owner offers the platform, platform
includes the product platform’s provider and a multi­ partners have a common interest in the prosperity of
tude of partners that create solutions for end-users the platform for materialising their own extensions
(Wang, 2021). The partners’ complementary exten­ (Selander et al., 2013). Ultimately, end-users derive
sions have to be implemented upon, and thereby certain value from the integrated offerings provided
intertwined with, the proprietary technologies of the by the platform owner and platform partners. As such,
product platform’s provider (Schreieck et al., 2022). the platform owner plays the orchestrator role for the
Using heterogeneous interfaces, the product platform entire ecosystem, who simultaneously needs to
and partners’ complementary extensions are bundled improve the technological core while constantly align­
into standalone and custom-built solutions in ing the interests and competencies of all ecosystem
response to the needs of individual end-users actors (Tiwana et al., 2010). Table 1 summarises the
(Schreieck et al., 2022). In the enterprise software differences between product platform and innovation
context, this corresponds to a relatively high degree platform ecosystems.
of coupling between the modules provided by all
actors, limited opportunities for module reuse, and
2.2. Dynamic capabilities for transitioning to
bounded generativity (Ceccagnoli et al., 2012; Ng &
innovation platform ecosystems
Gable, 2010).
An innovation platform is a digital technology While finding its roots in the field of strategy
foundation (e.g., a cloud-based enterprise software (Eisenhardt & Martin, 2000; Schilke et al., 2018;
platform), providing building blocks upon which part­ Teece, 2007; Winter, 2003), the study of dynamic
ners can jointly develop new innovations that are capabilities is omnipresent in various fields including

Table 1. Key characteristics of product platform and innovation platform ecosystems (emphasis on enterprise software context).
Product Platform Ecosystems Innovation Platform Ecosystems Literature
Platform A platform using e.g., on-premises technology upon A platform using digital platform technology Gawer & Cusumano
which partners develop custom-built extensions that (e.g., cloud) upon which partners develop (2014); Schreieck et
are highly coupled to the platform and offered to reusable extensions that are loosely coupled al. (2022); Tilson et
individual end-users to the platform and offered to various end- al. (2010)
users
Types of Leverage Production leverage to drive economies of scale and Production leverage to drive economies of scale Thomas et al. (2014)
Provided by scope in the development of extensions and scope, transaction leverage to drive
the Platform economies of search and transaction, and
innovation leverage to drive economies of
complementarities in the development of
extensions
Standardisation Heterogeneous development environments and Standardised development kits (SDKs) and Schreieck et al. (2022);
of the Platform interfaces with little standardisation for the interfaces (APIs) for the development and Tiwana (2015);
and Interfaces development and integration of extensions integration of extensions Wareham et al.
(2014)
Level of Control over the platform, the partners that have access Open access to the platform to potential Boudreau (2017);
Openness of to the platform, and the relationship with end-users; partners, with no control over the extensions Ghazawneh &
the Platform supports an ecosystem of selected partners of the platform and the relationship with Henfridsson (2013)
end-users; supports a wider ecosystem of
heterogeneous partners
184 K. HAKI ET AL.

IS research (e.g., Karimi & Walter, 2015; Pavlou & El Raubitschek (2018) propose three categories of
Sawy, 2010). Going beyond the resource-based view of dynamic capabilities, i.e., innovation capabilities,
the firm, which lays emphasis on an organisation’s environmental scanning and sensing capabilities,
current resource base, dynamic capabilities were and integrative capabilities. There are other studies
introduced to shift the focus to the purposeful mod­ that further map existing classes of dynamic cap­
ifications of an organisation’s resource base (Teece et abilities to different lifecycle stages of a platform’s
al., 1997; Teece, 2007). In this regard, current research growth and maturity. Teece (2017) maps Teece’s
differentiates operational from dynamic capabilities. (2007) classes of dynamic capabilities, i.e., sensing,
Operational capabilities are organisational routines seizing, and reconfiguring to birth, expansion, lea­
and processes that are developed over time through dership, and self-renewal lifecycle stages of a plat­
learning, and provide organisations with the capacity form. Similarly, Tan et al. (2015) extract classes of
to undertake activities in a reliable manner (Winter, capabilities from the literature and map them to
2003). They are directed towards maintaining and different stages of a platform’s development. Only
leveraging the status quo and permit an organisation recently, scholars have begun to investigate the
to “make a living” (Schilke et al., 2018; Teece, 2017; required capabilities in the emergent innovation
Winter, 2003). platform ecosystems (Schreieck et al., 2021).
Dynamic capabilities are forward-looking capabil­ In complementing existing research, the focus of
ities by which organisations extend, modify, or recon­ our research is on dynamic capabilities for transition­
figure existing operational capabilities into new ones ing from product platform to innovation platform
in response to disruptive technological shifts and ecosystems rather than on platform-native cases
innovations2 (Helfat & Raubitschek, 2018; Karimi & addressed by existing research (Helfat &
Walter, 2015; Teece, 2007; Winter, 2003). As the foun­ Raubitschek, 2018; Tan et al., 2015; Teece, 2017).
dation of competitive advantage in regimes of rapid This is an important inquiry in the sense that the
technological change (Teece, 2007), dynamic capabil­ platform is built by an incumbent firm to redefine
ities introduce new alternatives, new ways of perform­ the organising logic of an existing ecosystem and to
ing organisational activities, and new ways of creating reconfigure a huge existing installed base and its
value (Karimi & Walter, 2015; Schilke et al., 2018). underlying operational capabilities.
Dynamic capabilities can be categorised according to
three general types of functions directed towards stra­
3. Research method
tegic change: to sense and shape opportunities and
threats, to seize opportunities, and to continuously Studying an incumbent firm’s dynamic capabilities for
reconfigure an organisation’s resource base (Teece, transitioning from a product platform to an innova­
2007). tion platform ecosystem requires a research approach
Dynamic capabilities are relevant to our study that provides an in-depth understanding of platform
because incumbent firms’ effort in transitioning the ecosystems in their real-world contexts. Therefore, we
organising logic of an already established ecosystem to opted for a single-case study research design
a new one is directed towards strategic change (Helfat (Eisenhardt, 1989; Yin, 2009) through overlapping
& Raubitschek, 2018). Such a transition requires con­ data collection and analysis steps. Building on existing
siderable modification of existing operational capabil­ guidelines (Eisenhardt & Graebner, 2007; Eisenhardt,
ities to create new ways of organising the ecosystem 1989), our study comprises the following steps: select­
and new ways of creating value. Further, innovation ing the case, crafting instruments, entering the field,
platform ecosystems have their own dynamics (Teece, analysing data, and shaping the theory.
2017) in dealing with various types of uncertainties:
resource uncertainty, i.e., whether the required
3.1. Selecting the case
resources to be integrated and offered as an innovation
are available; coordination uncertainty, i.e., whether The studied case is an enterprise software ecosystem in
the required coordination of technology is feasible which the platform owner is a global enterprise soft­
when resources are available; and timing uncertainty, ware vendor. For decades, the vendor offered a pio­
i.e., whether the innovation is offered at the right time neering ERP system as a product platform (employing
and at the right scale when resources are available and on-premises architecture), which was adopted by
coordination is feasible (Venkatraman et al., 2014). thousands of end-user firms across the globe. The
Existing research either generally theorises on ERP system was the focal resource in a product plat­
dynamic capabilities in the context of platforms form ecosystem in which many partner firms were
(Karimi & Walter, 2015), or proposes classes of engaged in, for instance, developing extensions to fill
dynamic capabilities for platforms. Resembling the white spaces in the ERP system, as well as in
Teece’s (2007) sensing, seizing, and reconfiguring providing consultancy, customisation, implementa­
classes of dynamic capabilities, Helfat and tion, and training services to end-user firms.
 EUROPEAN JOURNAL OF INFORMATION SYSTEMS 185

As of 2012, the vendor decided to offer its focal provide consulting, implementation, and training
resource on a cloud platform and provide open access services.
to a wider range of partner firms. Instead of develop­ IP serves end-user firms, most of which are large
ing extensions that are inextricably intertwined with multinational enterprises. End-user firms typically
the core ERP, partner firms develop modular software- operate massive arrangements of interconnected sys­
as-a-service applications on standardised development tems and technologies deployed over many years.
kits and integrate them with the core ERP via APIs. Against this backdrop, end-user firms opt for IP to
This initiative went far beyond merely transitioning to obtain a lower cost but more reliable state-of-the-art
cloud technology. It has been transitioning the ven­ technology, finely customised IT solutions, and faster
dor’s product platform ecosystem to an innovation implementation of IT solutions. Figure 1 illustrates the
platform ecosystem, making partner firms adapt their actors in the studied innovation platform ecosystem.
business models and their complements to the ecosys­ We selected IP-Eco for our case study on the
tem, and creating immense potential for numerous grounds of its revelatory nature (Yin, 2009). The stu­
partner firms to generate innovative solutions. In its died case is a prime example of transition from a
transition phase, which is still ongoing until this writ­ product platform to an innovation platform ecosys­
ing, the vendor has attracted thousands of existing tem. The vendor launched IP in 2012 and continues to
(from product platform ecosystem) and new partner persuade more of its existing partners and end-user
firms to its innovation platform. In what follows, we firms from the product platform ecosystem to move to
elaborate on the innovation platform and the role of IP. We collected data in the transition phase five years
the ecosystem’s participants, i.e., platform owner, plat­ after IP’s launch, which gave us sufficient time after
form partners, and end-user firms. the launch to observe the changes made in the course
The studied innovation platform (IP) is the nexus of of the transition and their implications.
an innovation platform ecosystem (IP-Eco). IP pro­
vides digital infrastructure components such as net­
work, in-memory storage, servers, operating systems,
3.2. Crafting instruments and entering the field
SDKs, and APIs for building new and extending exist­
ing enterprise applications in a cloud computing We collected data from January to September 2017 by
environment. IP is managed by its owner (IPO), i.e., means of semi-structured interviews in a four-stage
the vendor of the ERP system. To complement IP, IPO process: crafting the interview guide, identifying
collaborates with thousands of build, run, sell, and potential interviewees, testing the interview guide,
service partners. Build partners design and develop and conducting interviews (Table 2).
integrated solutions based on IP. Run partners offer To ensure consistency in the data collection pro­
private- or public-cloud-deployed services based on IP cess, we first started with crafting an interview guide.
solutions. Sell partners resell IP solutions while mana­ The latter starts with introductory questions to under­
ging an entire service’s lifecycle. Service partners stand the interviewees’ context, for instance their

Innovation Platform Ecosystem

Platform Partners
Build Service Run Sell
Partners Partners Partners Partners

Platform Owner
Partner App Platform Account
Program Centre Mgmt. Executives
Innovation
Partner Industry Platform Platform Sales
Executives Teams Operations Force

End-user Firms

User 1 User 2 User 3 … User n

Figure 1. Overview of the studied innovation platform ecosystem.

186 K. HAKI ET AL.

Table 2. Four-stage process for primary data collection.

Stage Outcome Means Interviews
Crafting An interview guide to ensure a consistent The research goal to comprehend the new -
Interview and systematic data collection organising logic in the ecosystem
Guide
Identifying Suitable interviewees at IPO, partners, and Four interviews (avg. 56 minutes), 130 emails IP managers
Interviewees end-user firms to account executives
Testing Tested and refined semi-structured Four face-to-face interviews (avg. 62 minutes) IPO employees
Interview interview guide
Guide
Conducting Recorded and transcribed interviews 15 semi-structured interviews (avg. 53 Five IP managers, five IP partners, and
Interviews minutes) via Skype five IP end-user firms (Table 3)

roles, goals, and new opportunities in IP-Eco as well as emergent categories. The predetermined categories
encountered challenges in the transition phase. The helped us structure the data, unfold emergent cate­
interview guide was specifically designed to collect gories, and systematically present the empirical data
data on resource contributions of IP-Eco’s actors, associated with the emergent categories. We used
exemplary resource exchanges among actors, the use ATLAS.ti 9 to conduct the coding in both of the steps.
of IP’s mechanisms for generating integrated solu­ Innovation platforms are essentially means for service
tions, as well as means for transitioning to the innova­ innovation jointly created by various actors (Jacobides et
tion platform ecosystem, each triggered by an open al., 2018; Lusch & Nambisan, 2015; Wareham et al., 2014).
question. We adapted the interview guide and its In the first step of analysis, we thus employed the value co-
constituent questions to the role of each interviewee’s creation concept (Galvagno & Dalli, 2014; Payne et al.,
organisation in IP-Eco (i.e., IPO, IP partner, and IP 2008; Ranjan & Read, 2016) as a sensitising device (Klein &
end-user firm). Myers, 1999) to track the joint creation of value among the
For identifying potential interviewees, requirements innovation platform ecosystem’s actors in our data. We
were business or technology roles in relation to IP, employ­ included constituent constructs of value co-creation to the
ment at either IPO, a licenced IP partner, or an IP end-user coding scheme, i.e., actors in the innovation platform
firm, as well as in-depth familiarity with IP. After identify­ ecosystem, resource contributions by each actor in the
ing the potential interviewees and before entering the field, ecosystem, value of joining the innovation platform
we conducted pilot interviews with four IPO employees for (instead of using the product platform) for each actor,
testing and refining the interview guide. institutional arrangements to enable co-creation of value
The interview guide’s refined version was employed among the actors in the new ecosystem organising logic, as
to conduct interviews with key informants from IPO, well as the co-created services/solutions by bundling of
IP partners, and IP end-user firms. Table 3 explains various actors’ resources (Vargo & Lusch, 2004, 2008,
the organisations and the portfolio of the 15 intervie­ 2016, 2017). Next to value co-creation’s constructs, we
wees. All the interviews were recorded and transcribed also included further codes in the coding scheme to cap­
verbatim, each transcript (one per interview) contain­ ture transition from a product platform to an innovation
ing on average 12 pages. Next to the transcribed inter­ platform ecosystem. We coded the triggers that brought
views, after every few interviews the research team about transition points, challenges that various actors
discussed, reflected on, and documented the major encountered in the transition phase, goals of transition,
insights that they gained. These discussion sessions and outcomes resulting from transition, all from different
revealed the need for adjusting the interview guide actors’ perspectives (i.e., IP owner, partners, and end-user
and its constituent questions, stimulating the parallel firms).
conduction of data collection and analysis steps. The first analysis step provided us with explana­
Besides semi-structured interviews for collecting tions of transition as well as a tentative list of dynamic
primary data, the research team was granted access capabilities that enabled the platform owner to address
to secondary data on IP-Eco, comprising internal and the challenges encountered during the transition
public documents (e.g., IP marketing, architecture, phase. Therefore, in the second analysis step, we
external analyses, and events). We employed the sec­ aimed to further code the data based on the tentative
ondary data as a supplement for further enhancing our list of dynamic capabilities resulting from the first
understanding of IP-Eco. step. The objective was to shape the theory by refining
and sharpening the definition and specificities of the
tentative dynamic capabilities, and by tracking empiri­
3.3. Analysing data and shaping the theory
cal evidence that measures and represents the refined
In analysing the primary data, we opted for a scheme- capabilities. For this, we opted for Schilke’s et al.
guided approach (Miles & Hubermann, 1994, pp. 55– (2018) framework for formulating dynamic capabil­
69) in a two-step process. The coding scheme relied on ities with regard to their primary antecedents, conse­
a mixed strategy using both predetermined and quences, mechanisms, and moderators. Antecedents
 EUROPEAN JOURNAL OF INFORMATION SYSTEMS 187

Table 3. Organisations and profiles of the interviewees.

Organisation (pseudonyms) Interviewee (Position/Unit/Role/Experience3)
IPO (large enterprise): Business Development Senior Manager/Products & Innovation/VP
A leading multinational enterprise software vendor with offices in 180 Operations of IP-Eco, Global/17, 12 (O_M1)
countries Business Development Expert/Products & Innovation/Senior Director of IP-
Eco, Americas/26, 14 (O_M2)
Partner Recruiter/Global Customer Operations/Head of Partner & Channel
Programs, Europe/17, 14 (O_M3)
Business Development Expert/Office of the CEO/System Integrators
Enablement, Global/20, 17 (O_M4)
Business Development Senior Manager/Products & Innovation/VP Strategy
and Marketing Communications of Independent Software Vendors,
Global/20, 20 (O_M5)
IP-Partner #1 (small enterprise): Co-founder and Chief Executive Officer/Office of the CEO/Corporate
Canada-based certified and award-winning build and run partner for Strategy and External Relations/11, 8 (P1_CEO)
specialised industry needs; Member of the IPO Partner Advisory Council
for Innovation
IP-Partner #2 (small enterprise): Co-founder and Chief Executive Officer/Office of the CEO/Corporate
USA-based certified build and service partner specialised on mobile Strategy and Solution Design/22, 20 (P2_CEO)
application
IP-Partner #3 (medium enterprise): Director Products, Innovations & Business Development/Research &
Germany-based certified service partner for CRM with 140 employees, 4 Development/Product Design and Go-to-Market/20, 20 (P3_Director)
offices, and over 300 customers
IP-Partner #4 (large enterprise): Senior Principal/Technology Consulting/Innovation and Solution Lead for
USA-based certified service, build, and sell partner; Global consulting and Design of IP Applications/23, 23 (P4_Principal)
professional services company with net revenues of $34.9 billion,
425,000 employees, and clients in 120 countries
IP-Partner #5 (large enterprise): IT Manager/Product and Custom Development/Head of IT Architecture/12,
Germany-based certified service and sell partner; Global IT service provider 12 (P5_Manager)
with 6,000 employees, net revenues of €812 million in 25 countries
IP-Client #1 (large enterprise): IT Program Manager/Corporate IT/Head of IP Applications/12, 2
European manufacturing company with 25,000 employees and net (C1_Manager)
revenues of CHF4.6 billion
IP-Client #2 (large enterprise): Senior Researcher/Research & Development/VP Intrapreneurship & Co-
Germany-based leading manufacturer and vendor of healthcare solutions Creation/0, 2 (C2_Researcher)
with 5,000 products and services
IP-Client #3 (large enterprise): Senior IT Manager/Corporate IT/Head of Application Portfolio/8, 4
Brazil-based multinational manufacturer and vendor of agricultural (C3_Manager)
machinery
IP-Client #4 (large enterprise): Senior Developer/Corporate IT/Head of IP Solution Development/8, 8
Belgium-based multinational service integrator with 1,700 employees and (C4_Developer)
27 offices in 13 countries
IP-Client #5 (large enterprise): Senior Architect/IT Services/Application Management, Platform
Germany-based chemicals company with 33,000 employees in over 100 Management, Team Manager IP Landscape Architecture/34, 24
countries (C5_Architect)

denote drivers and factors that necessitate the exis­ evidence for each of the dynamic capabilities from
tence of a dynamic capability. Consequences capture the perspectives of the platform owner, platform part­
outcome factors that are influenced by a dynamic ners, and end-user firms (Appendix).
capability. Mechanisms refer to means through which
a dynamic capability is operationalised and that even­
tually affect an outcome factor. Finally, moderators are 4.1. Dynamic capability I: resource curation
factors that affect the strength of the relationship
between a dynamic capability and its consequences. 4.1.1. Antecedent
Thus, we applied the latter constructs in coding for When transitioning to an innovation platform ecosys­
each of the dynamic capabilities in our list of tentative tem, IPO needed to own the platform layer. If IPO is
capabilities across several rounds. The idea was to perceived as merely the platform’s provider, it would
iteratively compare the emerged capabilities and be the de facto standard of a product platform ecosys­
their specificities with the empirical data to eventually tem. In contrast, if a partner or an end-user firm uses
reach a theory that closely fits with the data. IP, IPO is in the unique position to orchestrate inte­
grated solutions. However, an innovation platform
ecosystem contains a complex pool of resources
offered by various actors. Uncertain conditions in
4. Results
which innovation platform participants operate call
Our analysis of the collected data resulted in deriving for orchestrated configuration of complementary
four distinct dynamic capabilities and their antece­ resources to form integrated solutions. In contrast to
dents, mechanisms, consequences, and moderators, a classical bilateral owner–user relationships, innova­
structure that we employ to present each capability in tion platform-mediated services integrate various
this section. We also provide exemplary empirical resources to meet the needs of any given subset of
188 K. HAKI ET AL.

end-user firms. In IPO’s case, it was often uncertain serves as a central technological means to orchestrate
which platform participant is responsible for what in end-to-end business processes entailing resources of
developing a solution. For example, if IPO releases an various IP partners. The point of entry for all IP
application, it is not immediately available as not all partners to the codebase is a cockpit. In contrast to
the APIs might be ready. In addition, this application regular integration platform as a service (iPaaS), IP’s
may not always have the embedded licencing model cockpit represents an enterprise integration platform
available so that partners can be completely self-suffi­ as a service (eiPaaS). IP’s eiPaaS supports the curation
cient in adopting it. of resources in multi-cloud service integration (e.g.,
AWS, GCP, and Azure), application-to-application
4.1.2. Dynamic capability integration, partner-to-partner integration, and
The analysis of the data unfolds resource curation mobile application integration scenarios.
capability (Table A1 in Appendix and Figure 2). An
innovation platform owner should undertake orches­ 4.1.4. Consequence
tration actions to mobilise complementary resources Resource curation results in tailored service delivery to
in a complex pool of resources to form a requested meet the specific needs of any given subset of end-user
service. For example, IPO builds its resource curation firms. With end-user firms receiving tailored and
capability based on a partner-to-partner scenario to effectively consolidated solutions, they are more likely
serve IP-Client #1’s IT needs through a deliberate to move to the innovation platform rather than using
combination of complementary resources contributed the product platform. For instance, IP-Client #1’s IT
by IP-Partner #1 (built a module) and IP-Partner #5 architecture imposes substantial intricacies for IPO’s
(sold and implemented IP-Client #1’s requested app). solutions as it operates a “solid core” of critical on-
Resource curation captures the capability to efficiently premises applications and a “flexible boundary” of
align relevant complementary resources contributed customer-facing cloud applications (C1_Manager).
by various partners, such that the orchestrated service Moreover, IP-Client #1 faces the challenges of control­
works well with the other solutions currently being ling an entire array of extant interconnected systems.
used by end-user firms. From IPO’s perspective, its resource curation affords a
holistic understanding of IP-Client #1’s IT architec­
4.1.3. Mechanism ture. From IP-Client #1’s perspective, IPO’s IT service
Our case data reveals orchestrated co-creational service works well with other resources currently being used
configuration as one of the mechanisms for resource by IP-Client #1. From IP-Partner #5’s perspective, it
curation. For instance, once there is a demand from a largely depends on IPO’s guidance in curating
given subset of end-user firms, IPO employs a dedi­ resources and implementing an appropriate IT solu­
cated team (headed by O_M3) for partner manage­ tion in IP-Client #1’s architecture.
ment with sub-teams per partner engagement model
(i.e., build, service, run, and sell). This team system­ 4.1.5. Moderator
atically identifies, negotiates with, and allocates rele­ The strength of the resource curation capability in
vant IP partners. Such case-by-case co-creational effectively generating tailored services is contingent
service configurations can also deepen the commit­ on the interorganisational structure of the innovation
ment of both end-user firms and platform partners platform ecosystem. Interorganisational structure
to the innovation platform. concerns multiplicity, variety, and interdependency
To establish co-creational service configuration of actors that are orchestrated when configuring a
using digital platform technology, IPO provides part­ solution. With increasing complexity in the interorga­
ners with a cloud-based extensible codebase. The latter nisational structure of partners and end-user firms,

Antecedent Dynamic Capability Mechanism Consequence

Orchestrated co-creational service
Meeting the end-user Resource curation: configurations by the platform
firms’ requirements efficiently orchestrate owner to engage complementary Tailored services to
entails the the consolidation of resources to meet the end-user meet the end-user
orchestrated complementary firms’ requirements firms’ requirements
searching, resources from the that motivate them to
matching, and innovation platform’s adopt the innovation
integration of current resource base Moderator platform instead of
partners’ resources for meeting a given using the product
Platform owner’s deployment of
within a complex subset of end-user platform
an interorganisational structure
pool of resources firms’ requirements
to communicate with partners and
to facilitate communication among
partners

Figure 2. The resource curation dynamic capability.

 EUROPEAN JOURNAL OF INFORMATION SYSTEMS 189

more orchestration efforts are required for two rea­ platform ecosystem to move to the innovation plat­
sons. First, aligning a complex set of actors ensures the form to preserve the ecosystem’s global structure. On
organisational and technological integrity of the the other hand, a platform owner needs to leverage the
offered solution. Second, it ensures that value is selection, cultivation, and dissolution of individual
extracted, and that costs, risks, and revenues are relationships for case-by-case value co-creation pro­
shared by all involved actors within the generated cesses to preserve the ecosystem’s local operations.
solution. For example, O_M2 oversees a complex Ecosystem preservation captures the capability to effi­
interorganisational structure of 250 partners in ciently attain and retain the innovation platform eco­
North America managed by a team of four partner system’s resource capacity by re-establishing stable
managers. This team orchestrates these 250 partners in relationships in the ecosystem’s new organising logic.
evaluating IPO’s partner program, onboarding IP, get­
ting required resources (e.g., IPO’s licence), building 4.2.3. Mechanism
their derivatives, and then ultimately putting their Our data reveal the deployment of relevant institu­
derivatives on IPO’s marketplace. tional arrangements as one of the mechanisms for
ecosystem preservation. Institutional arrangements
4.2. Dynamic capability II: ecosystem include, for instance, guidelines for partners’ step-by-
preservation step onboarding on innovation platform, competitive
pricing incentives, and partnership policies (e.g., rev­
4.2.1. Antecedent enue share with partners, ownership, licence agree­
When launching the innovation platform, IPO faced ments). For example, an innovation platform owner
the challenge of incentivising existing partners in the needs to continuously adjust contractual arrange­
product platform ecosystem to adopt IP. In IP’s year of ments to persevere stable relations with its partners.
launch 2012, one of the reasons behind initial slow In the case of IPO, while IP partners make these
adoption of IP by “build” partners was a lack of sales arrangements bilaterally with IPO and end-user
support. For instance, while IP-Partner #3 benefitted firms, there are no contracts between IPO and the
from IP’s technological affordances in building its end-users as IPO relinquishes direct sales in its inno­
modules, it suffered from little or no support in mar­ vation platform business. An important institutional
keting them. Thus, IPO struggled to obtain a critical arrangement installed by IPO is its channel policy,
mass of partners (i.e., existing product platform part­ enforcing that IPO is not supposed to bypass the
ners adopting IP) with complementary resources to existing partner–customer relations for its own
offer a wide range of solutions. Once a solution to benefit.
serve the needs of a subset of end-user firms is envi­ To establish institutional arrangements using digi­
saged, a unique subset of all the available resource sets tal platform technology, IPO offers its partners an
is required rapidly to meet those needs. integration and certification centre. It works as a qual­
ity management means certifying IP partners’
4.2.2. Dynamic capability resources that integrate with IPO’s ERP system.
The analysis of the data suggests ecosystem preserva­ Through offering certifications and a plethora of inte­
tion capability (Table A2 in Appendix and Figure 3). gration scenarios, IPO incentivises partners and end-
An innovation platform owner should ensure positive user firms to join the innovation platform and
network effects and stable benefits for all participants leverages individual relationships for subsequent
in its brand-new ecosystem organising logic. On the value co-creation processes. All the certified resources
one hand, a platform owner needs to incentivise exist­ are listed on a directory on IP serving as a sales
ing partners and end-user firms in the product channel and giving certified IP partners exposure to

Antecedent Dynamic Capability Mechanism Consequence

A platform owner’s set of Availability of
Ecosystem institutional arrangements to complementary
Meeting the end-user Preservation: incentivise partners to join and resources and
firms’ requirements preserve stable contribute their resources to the variety of offered
entails achieving a relations with the innovation platform services on the
critical mass of innovation platform innovation platform
partners moving ecosystem that motivate end-
from the product participants to Moderator user firms to adopt
platform to the safeguard the Environmental uncertainty that the innovation
innovation platform ecosystem’s resource necessitates proactive actions by the platform instead of
capacity platform owner to motivate partners to using the product
stay on, and end-user firms to keep platform
sourcing their services from, the
innovation platform

Figure 3. The ecosystem preservation dynamic capability.

190 K. HAKI ET AL.

a large set of end-user firms that visit the directory IPO continuously adapts its licencing model in
regularly. response to partners’ changing needs in conducting
business through the innovation platform. Thus, plat­
4.2.4. Consequence form owners can, to some extent, intervene in mana­
Ecosystem preservation results in the availability of ging environmental uncertainty by taking strategic
complementary resources on the innovation platform actions that shape other actors’ expectations, keep
due to many actors’ willingness to benefit from the motivating them to contribute to the ecosystem, and
platform. This brings about the variety of offered ser­ reduce their assessments of the risks of committing to
vices that motivates end-user firms to move to the the innovation platform.
innovation platform rather than using the product
platform. For instance, IP-Client #3 co-produced an
innovative module with IPO for end-users who were 4.3. Dynamic capability III: resource
farmers located all over Brazil. Thanks to preserving reconfiguration
an ecosystem of numerous partners, IPO enabled
4.3.1. Antecedent
effective marketing for the module by mobilising suf­
In transitioning to an innovation platform ecosystem,
ficient IP “sell” and “service” partners across Brazil.
IPO needed to enable an orchestrated consolidation of
From IPO’s perspective, such capability has thus far
partners’ complementary resources (resource curation
ensured a thriving innovation platform ecosystem of
capability). Nevertheless, end-user firms’ require­
partners world-wide. From IP-Client #3’s perspective,
ments evolve over time. If end-user firms adjust their
such capability allowed for an effective roll-out of its
requirements, a constant reconfiguration of organisa­
module for Brazilian farmers. Similarly, affected
tional and technological resources is needed to lever­
Brazilian-based IP partners benefitted from a partner
age creation of new services or reformation of existing
management process to support their relationship
services. Therefore, in its transition phase, IPO faced
with IP-Client #3.
the challenge of balancing an efficient and orche­
strated creation of integrated solutions at a specific
4.2.5. Moderator
point in time with a flexible and bottom-up creation
The strength of ecosystem preservation in attracting
of new solutions in response to end-user firms’ ever-
complementary resources is contingent on the rate
evolving requirements.
and unpredictability of changes in the innovation plat­
form ecosystem (environmental uncertainty). New
environmental stimuli and competitive pressures 4.3.2. Dynamic capability
cause organisational and technological changes in the The analysis of the data suggests resource reconfigura­
ecosystem. The greater such environmental dyna­ tion capability (Table A3 in Appendix and Figure 4).
mism, the greater the need to proactively engage in The end-user firms’ evolving needs necessitate inno­
preserving the innovation platform ecosystem. The vative reconfiguration of existing resources to leverage
enterprise software industry is competitive in that the ecosystem’s unfolded innovation potentials. Thus,
multiple platforms are available (e.g., Oracle, IBM, an innovation platform owner should not only allow
SAP, Salesforce). Each of the platform owners in this for unforeseen resource recombination but also facil­
industry seek to dynamically adapt their institutional itate uncoordinated resource (re)configuration to fos­
arrangements (e.g., pricing strategies, revenue share, ter generativity. Resource reconfiguration captures the
ownership) in line with the emerging circumstances in capability to flexibly and continuously reform given
the market to keep incentivising partners and to take actor-to-actor constellations to reconfigure resources
advantage of their strategic resources. For example, and to generate novel solutions.

Antecedent Dynamic Capability Mechanism Consequence

Resource Autonomy for uncoordinated
reconfiguration: service innovation by enabling Adaptive service
End-user firms have flexibly and platform partners to exchange with offerings to meet the
evolving constantly reform one another, reconfigure resources, end-user firms'
requirements that given actor-to-actor and settle service agreements evolving
necessitate constant constellations in the requirements that
(re)formation of ecosystem to increase motivate them to
services to adequately an innovation Moderator adopt the innovation
meet the new platform’s capacity platform instead of
requirements for continuously using the product
Significance and potential of the
meeting the end-user platform
evolving opportunities with
firms' requirements
regard to their profitability and
innovation roll-out

Figure 4. The resource reconfiguration dynamic capability.

 EUROPEAN JOURNAL OF INFORMATION SYSTEMS 191

4.3.3. Mechanism catch up with the emerging requirements of end-user

One of the mechanisms for resource reconfiguration is firms, motivating them to move to the innovation
a fair degree of agency to provide autonomy to partners platform rather than using the product platform.
in innovating platform services. IPO was criticised for
employing the same approach as in its product plat­ 4.3.5. Moderator
form business even after lunching the innovation plat­ Our data suggest that resource reconfiguration’s effect
form. Since 2016, IPO is, for instance, shifting a subset is contingent on the significance and potential of the
of its services from a licence-based to a usage-based evolving opportunities (e.g., innovation roll-out, finan­
pricing model. The latter allows IP partners to move cial significance, potential for further innovation).
from IPO’s subscription-based cloud services to ser­ When end-user firms’ requirements evolve, the need
verless computing with a very granular function-as-as- to reform a given service comes with costs and oppor­
service (FaaS) pricing model. Such a granular FaaS tunities. For example, if an end-user firm additionally
pricing model gives platform partners the autonomy requires an HR solution, this organisation comes up
needed for innovating and creating their services. with a detailed request for proposal. IPO then needs to
In accounting for platform partner autonomy, both map the existing service to the evolving requirements
contractual and technical flexibility underlie resource outlined in the proposal. A reformed service could
reconfiguration. Contractual flexibility concerns the bring immediate financial benefits due to its relevance
degrees of freedom in adapting a service’s delivery to a considerable number of end-user firms and/or
parameters, such as payment models and cancellation create opportunities for further rounds of innovation.
periods. Technical flexibility relates to technical affor­ Thus, the significance and potential of the opportunity
dances of digital platform technology and concerns determines whether it is worthwhile to tackle the
scalability and/or adaptability of a service in response emerged requirements with a slight or a more radical
to new requirements. For that, IPO offers a larger reconfiguration of resources.
variety of programming languages on the innovation
platform that grants IP partners a wide set of choices
4.4. Dynamic capability IV: ecosystem
when selecting the best-suited development kit for
diversification
reconfiguring their services. Further, IPO provides a
dedicated tool for API management, allowing partners 4.4.1. Antecedent
to deliberately reconfigure services and facilitate unco­ In transitioning to an innovation platform ecosystem,
ordinated (re)configurations of partner resources. The IPO needed to incentivise a critical mass of partners to
tool entails API provisioning and publishing, API dis­ move to the innovation platform (ecosystem preserva­
covery and consumption, as well as API security and tion capability). Concurrently, IPO needed to allow for
access control. As such, IP partners constantly expose uncoordinated resource reconfigurations to foster
their own internal and draw on others’ APIs to flexibly generativity (resource reconfiguration capability). In
reconfigure existing and generate novel solutions. simultaneously enabling both, IPO faced the further
challenge of probing its ecosystem’s diversity at multi­
4.3.4. Consequence ple touchpoints. As partners’ entry points to the eco­
Resource reconfiguration results in adaptive service system, multiple touchpoints are required to attract
offerings to end-user firms. For instance, IPO continu­ and mobilise diverse partners to satisfy end-user firms’
ously tracks IP-Client #1’s requirements to adapt IP emerging needs. In effect, resource reconfiguration
services accordingly. From IPO’s perspective, this cap­ can only be achieved if diverse and enough IP partners
ability ensures a healthy long-term relation with IP- are available.
Client #1. From IP-Client #1’s perspective, this cap­
ability allows for evolving towards an operating model 4.4.2. Dynamic capability
of critical on-premises applications (“solid core”) and The analysis of the data reveals ecosystem diversifica­
customer-facing cloud applications (“flexible bound­ tion capability (Table A4 in Appendix and Figure 5).
ary”). From an IP partner perspective, resource recon­ An innovation platform’s sustainable evolution results
figuration allows a constant identification of gaps in from a continuous enrichment of both the ecosystem’s
IPO’s focal resource (i.e., the ERP system), which IP supplementary resources (to increase resource capa­
partners typically fill. When requirements constantly city) and complementary resources (to increase
change and the ecosystem allows for uncoordinated resource diversity) through the engagement of diverse
reconfiguration of resources, partners are motivated to partners. Ecosystem diversification captures the cap­
enhance their position in the ecosystem. This ability to continuously retain diversity in the ecosys­
encourages partners to conduct their business on the tem’s resource capacity by identifying the required
innovation platform (instead of the product platform) diverse groups of partners, and by establishing corre­
due to access to a wide range of opportunities. sponding processes to attract enough partners to the
Similarly, resource reconfiguration allows a constant innovation platform in each group.
192 K. HAKI ET AL.

Antecedent Dynamic Capability Mechanism Consequence

Diversification and adaptation of
Ecosystem platform partners to determine the
Capturing the required partner groups and attract Emergent service
diversification:
evolving several partners within each group, and innovations that
diversify the
requirements of end- to motivate partners to specialise their meet a wide range of
ecosystem’s recourse resource contributions
user firms requires end-user firms’
capacity
multiple touch requirements and
for continuously
points within an motivate them to
exploring evolving
innovation platform Moderator adopt the innovation
avenues of resource
ecosystem to attract platform instead of
integration in
diverse groups of The competitive market positioning using the product
response to emergent of the innovation platform relative to
platform partners platform
requirements existing platforms as well as
competitive position of the platform
owner prior to transition

Figure 5. The ecosystem diversification dynamic capability.

4.4.3. Mechanism 4.4.4. Consequence

Therefore, diversification of platform partners to A diversifying ecosystem affords generative recombina­
determine types of required partner groups and tion of resources and thereby emergent service innova­
attract partners for each group is one of the mechan­ tions. The latter makes the innovation platform’s service
isms for ecosystem diversification. For instance, IPO offerings more attractive and relevant to end-user firms,
has installed a partner management programme to motivating them to move to the innovation platform
attract a diverse range of IP partners in four dedi­ rather than using the product platform. However, ser­
cated engagement models, i.e., build, run, sell, and vice innovations need to be effectively propagated to
service partners. Using digital platform technology, end-user firms enabling them to easily find and reach
IP also grants dedicated tooling to each partner relevant services. For this, IPO developed an App Centre
group. For instance, service partners (e.g., as the point of access. Putting third-party apps on IPO’s
Accenture) require different tooling compared to App Centre enriched the innovation platform’s offerings
build partners (e.g., Salesforce). IPO’s build partners and ensured that partners and their apps are known and
need IP’s help portal, a tutorial navigator, how-to easily accessible to all end-user firms.
guides, cookbooks, developer communities, a cloud
appliance library tool, and a rapid-deployment tool. 4.4.5. Moderator
Service partners, in turn, need online educational Our data suggest that the strength of ecosystem diver­
tools, live webinars, an enterprise architecture sification is contingent on the competitive positioning
explorer, or a client testimonial database. Thus, dedi­ of the innovation platform against competing plat­
cated tooling adjusted to each of the partner groups forms as well as the competitive position of the platform
contributes to attracting partners in each group and owner prior to its transition. With increasing competi­
to continuously retaining diversity in the ecosystem’s tion amongst innovation platforms, ecosystem diver­
resource capacity. sification becomes both more relevant and difficult.
Building on empirical data, adaptation of plat­ IPO competes with other enterprise software plat­
form partners is another mechanism for ecosystem forms through the innovation platform itself and the
diversification. Partners need to adapt themselves platform’s multi-sidedness. From a platform perspec­
after joining an innovation platform ecosystem. tive, IPO competes through a superior configuration
For instance, after entering the IPO’s ecosystem, of technological components. IP leverages economies
IP-Partner #1’s main goal was to make sure that it of scale and scope, which are realised based on inno­
is no longer internally focused but can also sense vation of the core and peripheries. From a multi-sided
the market and the opportunities that IP affords. IP- platform perspective, IPO embodies positive network
Partner #1’s goal is now to make sure it is able to effects in the enterprise software market whereby the
navigate within the innovation platform ecosystem value of its IP has grown significantly due to the
to differentiate itself from other partners. IP-Partner growth of platform users. In addition, IPO built on
#1’s goal has also evolved to ensure that it works its strong competitive position and established pro­
with diversified technologies to have an ecosystem duct platform ecosystem prior to its transition to an
of its own. Therefore, platform owners need to put innovation platform ecosystem. Such an established,
in place processes and incentives that leverage such strong ecosystem noticeably facilitates positive net­
adaptation of partners that eventually contribute to work effects and access to a wide and diverse types of
the ecosystem’s dynamics. partner firms.
 EUROPEAN JOURNAL OF INFORMATION SYSTEMS 193

5. Discussion and conclusion platform owner (the incumbent firm), partner firms,
and end-user firms.
This study’s focus is on incumbent firms’ transitioning
Our study also contributes to the emerging litera­
of their product platform ecosystems to innovation
ture on dynamic capabilities for platforms (e.g., Helfat
platform ecosystems, considering their already estab­
& Raubitschek, 2018; Schreieck et al., 2021; Tan et al.,
lished operational capabilities. Building on empirical
2015). Resembling Teece’s (2007) seminal classes of
evidence from an enterprise software case, we uncov­
dynamic capabilities (i.e., sensing, seizing, and recon­
ered the key required dynamic capabilities in the tran­
figuring), current research either proposes classes of
sition phase. In the following, we discuss the
dynamic capabilities (Helfat & Raubitschek, 2018) or
implications of our findings for theory and practice
maps them to different lifecycle stages of a platform’s
along with limitations and avenues for future research.
maturity (Tan et al., 2015; Teece, 2017). We comple­
ment these studies by offering particular capabilities, i.
e., resource curation, ecosystem preservation, resource
5.1. Implications for theory and practice
reconfiguration, and ecosystem diversification. We also
Our study complements the growing research on digi­ discuss the antecedents that necessitate each capability
tal platforms. We specifically contribute to the emer­ as well as the implementation mechanisms, the con­
ging literature on transition to innovation platform sequences, and the factors that moderate the effects of
ecosystems and on dynamic capabilities for platforms. each capability. The derived dynamic capabilities in
Existing literature on digital platforms mainly dis­ our work instantiate Teece’s (2007) seizing and recon­
cusses platform-native or disruptor cases (e.g., figuring classes of capabilities. These classes of
Cennamo & Santaló, 2019; Eaton et al., 2015; Huang dynamic capabilities build on the necessity of mana­
et al., 2017; Oh et al., 2015; Tan et al., 2015). However, ging resources and co-specialisation in orchestrating
platforms’ role in the transition of established busi­ the delivery of complex solutions (Teece, 2007). That
nesses of incumbent firms has become the crux of the is, in making the leap to an innovation platform eco­
platform economy and is increasingly gaining traction system, incumbent firms should be equipped with
(e.g., Sandberg et al., 2020; Stonig et al., 2022; Svahn et capabilities for attracting the required resources and
al., 2017). Our study complements existing research by for reconfiguring resources to generate co-specialised
analysing transition from a product platform to an and innovative solutions. For this, seizing capabilities
innovation platform ecosystem in a mature rather (i.e., resource curation and ecosystem preservation)
than a nascent case, led by an established firm rather concern maintaining and improving complementary
than a disruptor. Therefore, our study brings an resources while reconfiguring capabilities (i.e.,
underexplored aspect of the platform economy to the resource reconfiguration and ecosystem diversification)
forefront of digital platforms research. That is, a plat­ concern the ability to recombine complementary
form is built by an incumbent firm to redefine the resources for generating innovations (Teece, 2007).
organising logic of an established ecosystem. Existing research already informs us that a plat­
Our study specifically contributes to the emerging form’s sustainable operation is heavily contingent on
literature on the incumbent firms’ transition to innova­ simultaneously allowing for both structural stability
tion platform ecosystems (e.g., Lindgren et al., 2015; and change (Ciborra et al., 2000; de Reuver et al.,
Sandberg et al., 2020; Schreieck et al., 2022; Stonig et 2018; Ghazawneh & Henfridsson, 2013; Henfridsson
al., 2022; Svahn et al., 2017) in two ways. First, existing & Bygstad, 2013; Lusch & Nambisan, 2015; Tan et al.,
research raises the challenges and complexity of such 2015; Tilson et al., 2010). Thus, we assert that our
transition (Lindgren et al., 2015; Sandberg et al., 2020; derived dynamic capabilities supplement one another
Svahn et al., 2017) and points to the high failure rate in and are all required simultaneously: resource curation
realising the transition (Gawer & Cusumano, 2008; and ecosystem preservation capabilities are needed for
Hagiu & Altman, 2017; Yoffie et al., 2019; Zhu & efficient and orchestrated consolidation of resources,
Furr, 2016). Our work complements these studies by whereas resource reconfiguration and ecosystem diver­
taking dynamic capabilities as a lens to specify the sification capabilities are required for flexible and gen­
areas of competencies that incumbent firms need to erative reconfiguration of resources. This implies that,
extend and modify their extant resource base to to successfully navigate the leap to an innovation plat­
address the challenges entailed in transition. Second, form ecosystem, there is a need to attain and con­
in discussing transition, existing studies primarily stantly maintain a balance between this set of
focus on incumbent firms (Lindgren et al., 2015; paradoxically related dynamic capabilities. Each cap­
Sandberg et al., 2020; Svahn et al., 2017). When ela­ ability is crucial on its own but only contributes to a
borating on the capabilities that incumbent firms successful transition if balanced with the other cap­
require, we provide a multi-actor-role perspective abilities. Therefore, incumbent firms intending to
through studying an innovation platform ecosystem make a transition to an innovation platform ecosystem
as fluid actor-to-actor constellations constituted by the need to put in place diverging mechanisms to
194 K. HAKI ET AL.

simultaneously operationalise all four of the dynamic user firms. Therefore, our derived theoretical insights
capabilities uncovered by this study. should be interpreted in the context of similar plat­
In research on capabilities for innovation platform forms. Further, our study purposefully represents a
ecosystems, Schreieck et al. (2021) offer several cap­ transition case, such that the platform owner was
abilities (i.e., cloud-based platformisation, open IT already a major player and had an established product
landscape management, ecosystem orchestration, platform ecosystem before launching its innovation
platform evangelism, platform co-selling) similar to platform. Therefore, our derived theoretical insights
our study. They focus on capabilities for an emergent specifically apply to incumbent firms seeking to
innovation platform ecosystem. Our derived dynamic exploit digital platform technology in redefining the
capabilities complement their inquiry by focusing on organising logic of their established product platform
the transition phase during which the incumbent firms ecosystems.
seek to reconfigure existing operational capabilities to This study systematically derives dynamic capabil­
adapt to the ecosystems’ new organising logic. The ities in terms of their antecedents, mechanisms, con­
latter is manifest in our “dynamic” capability approach sequences, and moderators. Nevertheless, due to our
(unlike Schreieck et al.) in identifying capabilities single-case study approach, the presented constituents
along with their primary antecedents, consequences, of each dynamic capability are specific to the studied
mechanisms, and moderators (Schilke et al., 2018). case. As a further step and building on our insights, we
Our findings also contribute to practice. We pro­ encourage future research to come up with an exhaus­
vide incumbent firms with a set of capabilities along tive articulation of the derived dynamic capabilities in
with their triggering factors and implementation this study, specifically with regard to a set of mechan­
mechanisms. Focusing on the identified capabilities, isms required to realise each dynamic capability.
managers might anticipate areas of concern and take Moreover, platform governance (e.g., Boudreau,
appropriate measures. Reflecting on these capabilities 2010; Tiwana et al., 2010) is a major topic in the
can be valuable for incumbent firms that may be literature. Existing research discusses numerous gov­
motivated to enter into innovation platform business ernance mechanisms such as intellectual property
but are unaware of inherent intricacies and the rights, revenue sharing, gatekeeping, pricing policies,
required managerial actions. This is of particular among others (e.g., Gawer, 2009; Ghazawneh &
value for practitioners as more incumbent firms seek Henfridsson, 2013; Tiwana, 2014). Governance
to adopt a digital platform strategy to (re)establish mechanisms can be employed differently depending
their position in the digital economy. on the circumstances under which they are applied.
Specifically, from an ecosystem leadership stand­ For instance, gatekeeping can be employed by plat­
point (Cusumano & Gawer, 2002), the derived cap­ form owners to attract a high number of platform
abilities draw practitioners’ attention to the partners, while in other circumstances it is employed
paradoxical capacities that incumbent firms need to as a restriction to control who joins the platform
put in place to institutionalise a new ecosystem orga­ (Eisenmann et al., 2006). We posit that our set of
nising logic (Schreieck et al., 2022). These capabilities dynamic capabilities can be used as a basis to elabo­
are paradoxical as while being contradictory, they rate on how and why certain governance mechanisms
need to co-exist for successfully establishing the tran­ are employed. Each dynamic capability requires a
sition. On the one hand, incumbent firms need portfolio of governance mechanisms, and each
resource curation to orchestrate co-creation of solu­ mechanism can serve several capabilities depending
tions and simultaneously they need resource reconfi­ on the way the given mechanism is applied.
guration to foster uncoordinated generation of Therefore, we encourage prospective research to
innovations. On the other hand, incumbent firms build on our set of dynamic capabilities to system­
need ecosystem preservation to preserve stable rela­ atically discuss the multi-sided implications and
tions among ecosystem’s actors and simultaneously rationales of governance mechanisms.
they need ecosystem diversification to foster genera­ Further, the main focus of our study is on the
tivity of the ecosystem. These capabilities imply that, capabilities of incumbent firms transitioning to an
while incumbent firms need to actively participate in innovation platform ecosystem. Nevertheless, these
the innovation process, they need to carefully define capabilities’ realisation is closely related to digital
the scope of their engagement to allow for both affordances of platform technology such as boundary
ecosystem-wide directives as well as bottom-up resources, modular architecture, and recommender
initiatives. systems. In line with Hein et al. (2020), we encourage
prospective research to examine the technological
properties of platforms making them the nexus of
5.2. Limitations and future research
their ecosystems and providing the means to shift to
We investigate a B2B platform that is used as a foun­ a new ecosystem organising logic. Such properties are
dation to provide highly complex solutions to end- technological proxies of mechanisms that we discuss in
 EUROPEAN JOURNAL OF INFORMATION SYSTEMS 195

each dynamic capability. Therefore, future research is 3. Years in IT industry, years of experience with IP or
called to elaborate on technological affordances of a IPO, respectively.
platform to afford a balanced establishment of all
dynamic capabilities discussed in our study.
Although our empirical data includes the perspec­ Disclosure statement
tives of the platform owner, partners, and end-user No potential conflict of interest was reported by the authors.
firms, the offered dynamic capabilities merely serve
platform owners. Platform partners are an integral
part of any innovation platform ecosystem and their Funding
investigation is an important stream in platform
The work was supported by the Swiss National Science
research (Rietveld & Schilling, 2021). Therefore, we
Foundation (SNSF) and the RCSO & EM (University of
call for inquiries on platform partners, specifically for Applied Sciences of Western Switzerland, HES-SO).
the case of transition to an innovation platform eco­
system, as follows.
First, a critical success factor for transitioning from ORCID
a product platform to an innovation platform ecosys­
tem is to offer mechanisms that encourage partner Kazem Haki http://orcid.org/0000-0002-8807-0147
firms to develop solutions on the innovation platform
rather than the product platform (see antecedent of References
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Appendix

Table A1. Exemplary empirical evidence for the resource curation dynamic capability.
Perspective Exemplary Evidence
Platform owner orchestrates multiple partners’ distributed resources “the customer gets the demand satisfied from one integrated architecture – so also
at a given point in time in an easier to maintain way. The important point is [. . .] that business
processes run end-to-end across multiple systems.” O_M5
“IPO will build a product and will address needs, but invariably [the needs] are
things we [IPO] don’t have. Imagine some niche services like scanning of a bar
code in a store – we [IPO] may not build technology to do that but there are
other vendors who do that, and they need to provide those services integrated
with the cloud platform”. O_M2
Platform partners form a service with platform owner to contribute “From the partner side, definitely the simple and very flexible way to implement
their distributed resources the solutions with the full lifecycle management of the solution is one of the
[winning] elements. [. . .] then definitely we have a very good and promising
platform”. P4_Principal
“IP is more reliable and versatile technology. It is really a big benefit to be able to
deliver our software solutions faster and in a more agile manner within IPO’s
cloud ecosystem as would have been possible on-premises. [. . .] It is not one
partner doing it but you have a real system [of partners] that can interact”.
P5_Manager
End-user firms’ specific needs require orchestrated bundling of “We also use the platform to ramp up a new IoT service or IoT platform which also
complementary resources from a complex pool of distributed runs on IP and that is also a collaboration between IP and our company. [. . .]
resources We have C1 providing the [IoT] service and we have another partner who is
basically implementing the service in one of our applications which are
developed for C1”. C1_Manager
“We have all actors that are responsible for maintaining and developing IP: [. . .]
The C3 software development team, IPO Labs software development team, and
the C3 customer. [. . .] We can add other actors [. . .] that are joining the same
platform”. C3_Manager

Table A2. Exemplary empirical evidence for the ecosystem preservation dynamic capability.
Perspective Exemplary Evidence
Platform owner ensures positive network effects and stable benefits for “There are several competing platforms in the market. [. . .] With IP, [. . .] the
all ecosystem participants in its brand-new innovation platform partners who decide to choose our [IPO] technology not only find a very
ecosystem strong technology offering, very competitively priced, but at the end of the
day, it has a willing ecosystem of sales and account executives in IPO who
want to sell those apps that are on IP. So [. . .] we can provide them [IP
partners] both opportunity in the cost side, which is providing the
resources, but also provide them an opportunity to drive revenue. And that
is different from anywhere else. [Competing innovation platforms] are not
helping their partners who use their platform to sell their applications”.
O_M3
“We have a channel policy which is specific to the channel partners, which
basically says IPO is not supposed to overtake or ignore the partners and
customer relation in order to take some benefit out of that. The most
blatant example would be we [IPO] are working with a partner in one
department, and the partner has an opportunity with an end customer.
IPO has put this channel partner policy in place where [IPO’s approaching
this end customer directly] is strictly forbidden”. O_M1
Platform partners rely on stable relations and mechanisms within the “Even when you are a baby and you are born in this partnership, they [IPO]
new ecosystem organising logic to exploit the given network at a given give you step-by-step guide [with] step 1, step 2, step 3. Then you mature.
point in time You go to like grade 1. Then you start working with the platform and then
you go to grade 2. Then you start working with the partner manager and
you go to grade 3. As you progress, you get more tools and you get step-
by-step guidance almost like a school or college.” P1_CEO
“From the technology side, good interaction between IPO and the partners is
a very important point because knowledge sharing, showing how simple
the solution could be, and providing to the partners a lot of tools to
simplify the development of apps, this is one of the main reasons from the
technology perspective about the success. If the platform is providing
insufficient technology, relations are not stable, [and] it would be hard for
the partner to make the implementation”. P4_Principal
End-user firms are attracted to those platforms on which stable relations “During the discussion with the insurance company, we had a question about
afford efficient delivery of integrated solutions who can see data and who cannot see the data [. . .]. We were able to say
[. . .] that was settled by IP, and we could avoid that kind of discussions on
all the local regulations [. . .] so that we do not have to mangle as a partner
with all the local regulations in cloud. That for me is a good thing. That
enables us to sell cloud much faster”. C4_Manager
“One good example is that the main IPO developer meets once a month with
our development team during the development phase; and when we want
to test the new versions, new releases of the solution, we go to the farmer’s
site and then we test in a real case together with the IPO development
person, with our development person and the customer. [. . .] Once a
month, we talk about the roadmap and the development plan”.
C3_Manager
 EUROPEAN JOURNAL OF INFORMATION SYSTEMS 199

Table A3. Exemplary empirical evidence for the resource reconfiguration dynamic capability.
Perspective Exemplary Evidence
Platform owner leverages the constant reform of given actor-to- “We have [. . .] partner councils [. . .] to bring certain key partners in different
actor constellations to meet end-user firms’ changing aspects together, for example, in a quarterly meeting. We have, for example, a
requirements quarterly meeting with 20 of our key partners to understand from them what is
good, what is bad, what needs to be improved, certain joint collaborative
projects, and in order to improve our offering and also to help the partners
improve their offering. Then, we have, of course, things like communities where
these development partners can exchange ideas and issues and problems in a
community platform”. O_M2
“So, for the customer, it [reformed service] is a better service [. . .] to his changing
needs, to the agility that he needs. Also, in tracking the cost in the markets and
the market requirements and the customer requirements that he faces through
an ecosystem that is broad, through [. . .] a platform solution that is
comprehensive and that gives all the capabilities that are needed in order to
quickly set up new solutions that are needed”. O_M5
Platform partners engage into various actor-to-actor constellations “We go to a customer together [with IPO] and IPO sells a core product and you [IP
to meet end-user firms’ changing requirements partner] sell your own product by bundling it on the platform. That would be the
most important to us because, first, we are doing it together [to meet end-user
demands]. Second, it really reduces our customer acquisition costs tremendously.
And, third, we have a lot of credibility to begin with when we go with them”.
P1_CEO
“A partner has that deep insight into the core business of the customers. The drive
to innovate has to come from the intrinsic motivation of the customer. And that
is something that it has to deliver to the partners and or to IPO in order to be
able to create new solutions on the IP”. P5_Manager
End-user firms have continuously evolving requirements that can be “I am responsible for the so-called Flexible Boundary Stream [for evolving
met by the (re)form of services requirement]. It [. . .] takes care of and comprises all the different applications
which are [. . .] not part of the core system. We basically create a common
platform – that is the IP – to host those applications and to also have the
integration possibility with our core system”. C1_Manager
“The advantage for the customers is that a customer can innovate very actively – in
a very agile and rapid manner – his solutions via such a platform which is
integrating into its backend systems. We do not really want to touch [the
backend systems] because you do not change a running system. This is what the
business depends on critically and this needs to be totally reliable 100% and just
needs to work and operate”. C3_Manager

Table A4. Exemplary empirical evidence for the ecosystem diversification dynamic capability.
Perspective Exemplary Evidence
Platform owner constantly diversifies the ecosystem’s resource capacity “There are 1,300 individual partners which have a partner contract with IPO.
and leverages end-user firms’ access to a wide range of innovative We have different partner tracks or engagement models or partner types.
services The sell partnership is for the value-added resellers. There are service
partners who are doing services for or with IPO and then there are the build
partners. [. . .] Currently, we have 1,967 [build] partners. We have an
additional 300 that are in [. . .] a limited-period-of-time engagement which
lasts for a year for the partner to try free of charge”. O_M1
“We have the digital front [. . .] App Centre 2.0 which has just been launched,
where these partner apps are being published and the end-user can either
directly purchase them from the App Centre or [. . .] clients can basically click
on it and get in contact with the partner who sells these apps”. O_M1
Platform partners contribute to and take advantage of the innovation “For IPO and its partners, we think value is a proportion of savings on lower
platform’s wide use in response to end-user firms’ emergent needs [. . .] TCO [Total Cost of Ownership] you offer the client organisations, parts
of the lower cost of running operations using ERP systems, client loyalty,
and, lastly, insights regarding necessary enhancements to IPO’s ERP package
within the particular industry verticals or necessary enhancements for the
complementary part in the modules.” P5_Manager
“When we started, we actually explored several markets with Microsoft, even
with Google and IPO. And we found most success working with IPO just
because of [. . .] their enterprise [software] experience. [. . .] We were actually
already working with Azure or even Amazon because on the cloud side IPO
were starting a little bit behind. So, when it came out, we jumped on it [IP]
because of the enterprise [software] ecosystem”. P1_CEO
End-user firms contribute to and take advantage of the ecosystem’s “Our goal is to be able to connect to a diverse ecosystem that provides even
diverse resource set to meet their own emergent needs more value to our end customers so we can have a single platform to
manage all of his farm with the different machines that he has and different
information that he has to deal with. So, our goal with the initiative is to be
able to connect to this ecosystem and bring value to our customer”.
C3_Manager
“IPO has no industry competence. That is what the partners have. But even this
I cannot really believe because real industry competence has a customer by
itself. And that is what is a little bit missing on the IPO side. I do not think
that partners can compensate this because every company has special
processes and so on. [. . .] That [industry competence] is what the customers
bring in – and the customer has a lot of experience”. C5_Manager