Platform Adoption in Network Markets: Selecting Beneficial Partners to Achieve Market Dominance

Strategic partnering has become a common place when introducing innovations to systems markets. In standards battles, network affiliation has been used as a market signal to create confidence in a format's success. This paper's authors thus develop and test a model aimed at finding the right partners to sponsor an innovative technology. The results suggest that company characteristics shape expectations about a system's future value and the likelihood of its survival. Partners that have proven successful in adjacent industries are especially suited to drive diffusion. Attracting big players may therefore be more beneficial than attracting multiple, but minor, firms. Quality clearly beats quantity when selecting new partners.