Battle of Platforms: Unlocking Profitability in Multi-Sided Software Platform Business Models
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Beschreibung
Software platforms have become central to the digital economy,
reshaping industries and accelerating growth far beyond traditional
business models. Their success stems from multi-sided ecosystems
that integrate consumers and complementors, leverage strong
network effects, and enable rapid scale with limited resources.
This book presents a market model for profit-maximizing pricing
strategies in software platform markets, focusing on the interactions
between consumers, complementors, and platform owners. The
analysis shows that variable, transaction-based fees are optimal
once complementor participation exceeds 50 %, and that sustainable
oligopolies depend on stable participation equilibria across market
sides. When multiple equilibria exist, markets tend to tip toward
monopoly as one platform attracts most single-homing consumers.
Building on these insights, the book offers strategic guidance for
incumbents and entrants based on complementor heterogeneity and
consumer benefits.
Applying the model to the mobile app market illustrates its practical
relevance, showing that real-world two-platform competition often
converges to a single stable equilibrium—challenging earlier
predictions from one-platform frameworks.
Autor*in
Benjamin Dennhardt
Themen in »Battle of Platforms: Unlocking Profitability in Multi-Sided Software Platform Business Models«
Multi-sided markets, Platform economics, Pricing strategy, Network effects Platform competition, Oligopoly formation, Profit maximization Software platforms, Digital transformation, Digital platform business models Multi-sided markets, Network effects (direct & indirect) Market share competition, Platform profitability, Platform competition