How Platform Governance Changes when Customers Become Developers

Maximilian Schreieck, Manuel Wiesche, and Helmut Krcmar (2020) – Academy of Management Proceedings Vol. 2019, No. 1, p. 13904

Abstract

Platform ecosystems in the software industry are considered to have two sides: third-party developers that provide applications and customers that use these applications. However, in many platform ecosystems that emerge in complex environments such as in the enterprise software industry, customers act as developers by creating solutions on the platform for their own use. Acknowledging these ‘customers as developers’ changes how platform owners apply governance in their platform ecosystem. Customers as developers do not trigger indirect network effects – the reason why platform ecosystems typically scale fast – and require different tools and resources for value creation. In this paper, we analyze SAP’s cloud platform ecosystem with a multi-year grounded theory study to describe the phenomenon of customers as developers. By showing how SAP adapted its platform governance approach, considering the role of customers as developers, we derive insights how platform owners can successfully govern the transition of products to platforms in complex technological environments. Platform owners need to first enable customers as developers for example by ensuring compatibility to the customers’ IT landscape and fostering exchange among customers and their implementation partners. With an increasing installed base of customers as developers, platform owners can direct the ecosystem towards a two-sided platform ecosystem by increasing scalability of initially customer-specific solutions. With these results, we enhance the understanding of platform ecosystems in complex technological environments such as enterprise resource planning or the industrial Internet of things.

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