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.