Platform Compatibility and Developer Multihoming: A Trade-off Perspective

Digital platform ecosystems feature interplatform competition. A potential strategy for a platform with market disadvantage is to make itself compatible with competitors to attract multihoming of developers. However, many questions remain unresolved regarding how a platform’s compatibility strategy impacts developers’ multihoming decisions and subsequent app performance. In this study, we use the context of web browser platforms (i.e., Firefox and Chrome) to investigate how the increase in the technological compatibility of a secondary platform (Firefox) influences developer multihoming from a primary dominant platform (Chrome). We theoretically consider how increased platform compatibility influences the trade-offs in developers’ multihoming decisions and their subsequent app development choices. Based on this trade-off perspective, we posit and empirically investigate the effects of increased platform compatibility on developer multihoming, and the subsequent development choices and app performance resulting from multihoming. Our findings illustrate that developers with larger user bases on the primary platform are more willing to multihome than those with smaller bases, but increased platform compatibility reduces this gap and enables developers with smaller user bases to better embrace multihoming. Increased platform compatibility also encourages multihoming developers to develop exclusive apps for the secondary platform. Moreover, increased platform compatibility facilitates multihoming developers to leverage their primary-platform user bases to enhance their secondary-platform app performance, and this effect is influenced by the development type (porting or exclusive development). Our study generates unique insights that add to the theoretical understanding of platform compatibility, multihoming, and platform competition.