Governance Strategies to Drive Complementary Innovation in IoT Platforms: A Multiple Case Study

Abstract

The widespread uptake of the Internet of Things spurred both software and hardware firms to compete for platform leadership. Information systems research has acknowledged that a platform’s success depends on the innovational output of its ecosystem of firms. However, the question whether platform owners should coordinate these firms through cooperative or competitive strategies to create complementary applications remains unaddressed. To address this gap, an exploratory, multiple case study of four German companies with IoT platforms was conducted. Five of the six governance strategies derived from the literature were confirmed: opening, alliancing, coring, entering, and pricing. In these strategies, 19 distinct governance mechanisms and their positive or negative effects were identified. The findings contribute to research on business-to-business platforms by demonstrating that cooperation between platform owners and complementors represents the dominant meta-level strategy in IoT platforms.