From platform dominance to weakened ownership: how external regulation changed Finnish e-identification
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RESEARCH PAPER
From platform dominance to weakened ownership: how external regulation changed Finnish e-identification Anar Bazarhanova 1
&
Jesse Yli-Huumo 1 & Kari Smolander 1,2
Received: 7 May 2018 / Accepted: 8 January 2019 # The Author(s) 2019
Abstract Background There is substantial interest among scholars in digital platforms and the ecosystems around them. Digital platforms are open, continuously evolving, sociotechnical structures that can be sensitive to various changes. Aim We take one-step further and investigate the post-dominance phase of platforms. The electronic identification (eID) ecosystem in Finland provides a good example of ecosystem transformation due to external changes from EU and national regulation. Method We engage in an extensive case study of a nation-wide monopolistic eID platform. We first take a retrospective view to understand the historical context and then examine in detail how an external driver leads to changes in the ecosystem. Results We explicate the platform evolution process, from a phase of dominance with centralized control structures to a more federated governance approach. We find that the introduction of intermediaries between the platform and its users contributes to a weakening of the dominant platform owners. Conclusion This finding that platforms can transform into industry infrastructures has an important implication for our understanding of the dynamics underlying digital platforms. Keywords Industry platforms . Platform ecosystems . Platform evolution . Platform dominance . Digital infrastructrues JEL classification O3 . L
Introduction Current research on platforms has focused on guiding firms to become platforms (Gawer and Cusumano 2008; Leijon et al. 2017). Amrit Tiwana’s seminal book on orchestrating software platforms suggests that businesses must learn to leverage Responsible Editor: Juho Lindmann * Anar Bazarhanova [email protected] Jesse Yli-Huumo [email protected] Kari Smolander [email protected] 1
Department of Computer Science, Aalto University, Konemiehentie 2, P.O. Box 15400, FI-00076 Aalto, Finland
2
School of Business and Management, Lappeenranta University of Technology, P.O. Box 20, FI-53851 Lappeenranta, Finland
the power of platform business models in order to stay competitive (Tiwana 2014). Firms are increasingly opening up their products and services to create developer ecosystems around their services (Jansen 2015). So-called “platformization” has become a popular topic leading many firms to tap into this model of value creation de Reuver et al. 2017). However, increasing use of digital platforms among businesses creates dependencies that we know relatively little about and need to understand better. Digital platforms are digital artifacts, thus, they are volatile and sensitive to changes in technology, regulation, and customer preferences. However, few studies have addressed the implications of termination phases of the platform or the periods following the dominance. After integrating with externally develope
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