Platform participants hedging risk: post-alliance technology search of a platform participant and a rival platform

Abstract

Using Oracle's enterprise software platform ecosystem, we demonstrate how the platform players involved in or affected by alliances adjust their post-alliance technology search behaviours to address potential competitive challenges. While both platform owners and platform participants increase searches for each other's technology after the formation of a technology alliance, we find that the latter also increase the technology searches for the main rival platform owner, likely in order to hedge the risk of being exclusively tied to the former. We further find that the rival platform owner also increases searches for the technology of the platform participant in order to neutralise potential competitive threats from the focal alliance. In doing so, this study cross-pollinates the separate research streams of platform ecosystems and alliances in order to examine the competitive interplays between platform player and the resulting technological evolution in a platform ecosystem.