Scaling of Digital Platform Ecosystems : A Conceptualization and Case Study

Abstract

Over the last few years, the market share of platform companies in the global economy has increased significantly. The reason for this is that platform companies can scale their business much faster than their industrial counterparts by adding digital infrastructure. Although the research topic of digital platform ecosystems has gained popularity across several disciplines in recent years, only a small body of research exists with regard to the aspect of scaling. As a reaction to this research gap, a conceptualization of digital platform ecosystems was conducted in the course of this thesis. With the goal of identifying key attributes for the conceptualization, a structured literature search and a case study were conducted. This revealed that a distinction can be made between technical scalability and economic scalability. Technical scalability is the prerequisite for enabling economic scalability. It must ensure load scalability (the ability of the system to handle an increased volume of user requests) and structural scalability (the ability to expand the system into any dimension without much friction). For economic scalability, financial factors such as reducing marginal costs, as well as strategic factors such as increasing operational efficiency through growth, attracting new partners and users, and enabling the recombination of existing resources to create new products and services play an important role. The conceptualization further reveals three scalable pillars: technical infrastructure, partners and users. Each pillar is subject to different conditions regarding its potential for scaling. The four scaling mechanisms identified - natural growth mechanism, expansion mechanism, recombination mechanism and data generating mechanism - show how these pillars reinforce themselves and each other, thereby providing a digital platform ecosystem several potentials to scale.