Managing Proprietary And Shared Platforms: A Life-Cycle View

In a platform-mediated network, users rely on a common platform, provided by one or more intermediaries, that encompasses infrastructure and rules required by users to transact with each other. A fundamental design decision for firms that aspire to develop platform-mediated networks is whether to preserve proprietary control or share their platform with rivals. With a shared platform, such as Visa, DVD, or Linux, multiple firms collaborate in developing the platform's technology then compete in offering users different but compatible versions of the platform. This paper examines factors that favor proprietary versus shared models when designing new platforms then explains how management challenges differ for proprietary and shared platform during subsequent life-cycle stages: network mobilization and platform maturity.