Entrance into a platform‐dominated market: Virtue of an open strategy on the numerical computation market

• Author: Frédérique Blondel,Serge Edouard
• DOI: http://doi.org/10.1002/cjas.1320
• Published date: 01 September 2015
• Date: 01 September 2015

Entrance into a platform-dominated market: Virtue

of an open strategy on the numerical computation

market

Frédérique Blondel*

Université Paris-Sud, laboratoire RITM (Réseaux

Innovation Territoires et Mondialisation)

Serge Edouard

Université Paris-Sud, laboratoire RITM (Réseaux

Innovation Territoires et Mondialisation)

Abstract

Strategic and industrial analysis reveals it is extremely diff‌i-

cult to enter a market dominated by an existing platform. In

fact, direct or indirect network effects give the established

company’s platform a considerable competitive edge. This

is true of the numerical computation market and the Matlab

+ Simulink platform by MathWorks. The case study of Scilab

Enterprises helps identify conditions of viability for breaking

into such a market. We f‌ind that alone, the platform strategy

is doomed to fail, but accompanied by an open strategy, en-

tering a platform market becomes possible. We hypothesize

that a platform strategy is successful when associated with

an open innovation process (integration of the open source

community) and supported by a business ecosystem (a huge

community of developers, users, and allies). Copyright ©

2015 ASAC. Published by John Wiley & Sons, Ltd.

Keywords: numeric computing, business ecosystem, open

innovation, open source, platform

Résumé

L’analyse stratégique et industrielle montre qu’il est

extrêmement diff‌icile, pour un nouvel entrant, de pénétrer un

marché dominé par une plateforme en place. C’est le cas du

marché du calcul numérique avec la plateforme Matlab +

Simulink de MathWorks. L’étude de cas de Scilab Enterprises

permet, dans ce contexte particulier, d’identif‌ier des conditions

de viabilité d’une stratégie d’entrée sur un tel marché. En soi,

la stratégie de plateforme seule est vouée à l’échec.

Accompagnée d’une stratégie ouverte, cette entrée devient pos-

sible. La stratégie ouverte est déf‌inieicicommeunestratégie

de plateforme associée à un processus d’innovation ouverte

(intégration de la communauté open source) et s’appuyant

sur un vaste écosystème d’affaires (vaste communauté de

développeurs, d’utilisateurs et d’alliés). Copyright © 2015

ASAC. Published by John Wiley & Sons, Ltd.

Mots-clés : calcul numérique, écosystème d’affaires, inno-

vation ouverte, logiciel libre, plateforme

Business models based on a single platform seem to

have become the Holy Grail of companies, at least for

those in the information and communication technology

(ICT) sector. A platform strategy is often considered a

success from the moment it attains a dominant position or

monopoly. Earlier studies have led to a “winner-take-all”

consensus, but the possibility that platforms could

coexist in the same market or that a new entrant could

compete against an incumbent has yet to be examined

(Cennamo & Santalo, 2013). The model developed by

Zhu and Iansiti (2012) is the f‌irst to have acknowledged this

gap. That said, opportunities to enter a platform-dominated

market are so limited that a successful entrance strategy is

hard to fathom.

In this study we examine an open software development

company named Scilab looking to penetrate the numerical

computation market dominated by the Matlab platform.

We aim to identify less restrictive conditions for market

entry. Gueguen and Torrès (2004) and Loilier and Tellier

(2004) have also studied the development of open softwares,

examining Linux in contrast to software giant Microsoft.

The Linux developers formed a community of informatics

geographically separated that contributed to enhance the

software’s value: this is referred to as an open community.

This paper was reviewed and accepted in its original French and translated

upon acceptance. Both the English and French versions are available online

at http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1936-4490.

We would like to thank Melissa Corey as well as the two reviewers of this

manuscript for their valuable comments and for their encouragement, which

improved the quality of our article.

*Please address correspondence to: Frédérique Blondel, MIAGE, Université

Paris-Sud, Pôle Universitaire d’Ingénierie d’Orsay (PUIO, bât. 640), Rue

Louis de Broglie, 91405 Orsay cedex, France. Email: frederique.

blondel@u-psud.fr

Canadian Journal of Administrative Sciences

Revue canadienne des sciences de l’administration

32: 177–188 (2015)

Published online 8 June 2015 in Wiley Online Library (wileyonlinelibrary.com) DOI: 10.1002/CJAS.1320

Can J Adm Sci

32(3), 177–188 (2015)Copyright © 2015 ASAC. Published by John Wiley & Sons, Ltd. 177