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Multi-homing and Software Firm Performance

Abstract : Joining or leaving a platform ecosystem is a key strategic decision for software developers. ‘Multi-homing’ is strategy in which a company distributes its products via more than one platform ecosystem in parallel. ‘Single-homing’ is an opposite strategy in which the software is being distributed exclusively via a single platform ecosystem. On one hand, multi-homing can increase customer reach in markets where customers typically single-home. On the other hand, creating a new version of the software product for multi-homing purposes generates, e.g., conversion, maintenance, and marketing cost. Interestingly, multi-homing as a strategic choice in software business has thus far have received surprisingly little academic scrutiny. In particular, there is very little information on whether multi-homing is an economically viable distribution strategy. To fill in this void, we explore the financial performance between single-homers and multi-homers in mobile application ecosystems. We investigate how the decision to multi-home affects firm performance with a sample of mobile application developers. The results imply that the revenue growth has been faster among single-homers while our dataset is biased towards single-homers. This calls for additional research comparing the two distribution strategies. This paper acts as a starting point for a research agenda in order to better understand multi-homing a strategic choice in software business.
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Submitted on : Tuesday, April 17, 2018 - 11:55:00 AM
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Sami Hyrynsalmi, Matti Mäntymäki, Aaron Baur. Multi-homing and Software Firm Performance. 16th Conference on e-Business, e-Services and e-Society (I3E), Nov 2017, Delhi, India. pp.442-452, ⟨10.1007/978-3-319-68557-1_39⟩. ⟨hal-01768493⟩

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