Don’t “Just Do It”: On Strategically Creating Digital Ecosystems for Commodity Functionality

Paper in proceeding, 2024

For years, research on software ecosystems has focused on the many opportunities for stakeholders to engage in collaborative innovation and creation of new customer value. With a common platform as the basis, companies co-evolve capabilities around a shared set of technologies, knowledge, and skills, to develop new products and services that would have been difficult for the involved parties to realize internally. Previous studies present key elements for successful innovation ecosystems and strategies for when and how to align with external partners to accelerate innovation while maintaining competitive advantage. However, while research on innovation ecosystems is important for future value creation, research on ecosystems for managing commodity functionality is limited. Although commodity functionality constitutes a large part of existing systems, strategies for how to maintain, manage and evolve this type of functionality are often neglected and not paid as much attention. In this paper, and based on multi- case study research, we present a strategic framework that allows companies to systematically create a fully developed digital ecosystem around commodity functionality. The framework outlines a sequence of strategies starting from outsourcing and moving on to preferred supplier, supplier network and with the final stage being a fully developed ecosystem.