Value co-creation practices in business-to-business platform ecosystems

Abstract

Moving beyond value creation in individual companies, firms have integrated customers, partners, and stakeholders in a mutual value co-creation process. Examples are platforms such as Apple’s App Store, where external developers use boundary resources provided on the platform to develop and share applications in an ecosystem. While value co-creation on business-to-consumer platforms is common practice, research on their business-to-business (B2B) counterparts is still sparse. The goal of this paper is to analyze how B2B platforms utilize value co-creation practices. We conduct a multiple case study in the context of emerging Internet of things (IoT) platforms highlighting that B2B platforms follow three standardized value co-creation practices. The platform encourages the supply side through the (1) integration of complementary assets, the demand-side through (2) ensuring platform readiness and connects both processes by (3) servitization through application enablement. We conclude by showing how platforms leverage different boundary resources in a process of standardization to develop a scalable infrastructure that explains how platforms enable value co-creation within their ecosystem.

Full text

RESEARCH PAPER
Value co-creation practices in business-to-business platform ecosystems
Andreas Hein
1
&Jörg Weking
1
&Maximilian Schreieck
1
&Manuel Wiesche
1
&Markus Böhm
1
&Helmut Krcmar
1
Received: 14 September 2017 /Accepted: 5 February 2019
#The Author(s) 2019
Abstract
Moving beyond value creation in individual companies, firms have integrated customers, partners, and stakeholders in a mutual
value co-creation process. Examples are platforms such as Apple’s App Store, where external developers use boundary resources
provided on the platform to develop and share applications in an ecosystem. While value co-creation on business-to-consumer
platforms is common practice, research on their business-to-business (B2B) counterparts is still sparse. The goalof this paper is to
analyze how B2B platforms utilize value co-creation practices. We conduct a multiple case study in the context of emerging
Internet of things (IoT) platforms highlighting that B2B platforms follow three standardized value co-creation practices. The
platform encourages the supply side through the (1) integration of complementary assets, the demand-side through (2) ensuring
platform readiness and connects both processes by (3) servitization through application enablement. We conclude by showing
how platforms leverage different boundary resources in a process of standardization to develop a scalable infrastructure that
explains how platforms enable value co-creation within their ecosystem.
Keywords Val u e c o - cr e a t i o n .Digital platforms .Internet of things .Case study .Boundary resources .Standardization
JEL classification O320 Management of Technological Innovation and R&D
Introduction
The creation of economic value has shifted during the last
decades from individual contributions by single firms to the
integration of customer knowledge in product development
(Edvardsson et al. 2012;Matthingetal.2004)totheco-
creation of value in complex service ecosystems (Skålén
et al. 2015; Peppard and Rylander 2006; Prahalad and
Ramaswamy 2004; Hippel and Katz 2002). For the latter,
service platforms have emerged as a dominant model (Lusch
and Nambisan 2015). Service platforms represent the center of
an ecosystem of different actors and take advantage of net-
work externalities by facilitating supply and demand (Lusch
and Nambisan 2015; McIntyre and Srinivasan 2017; Hein
et al. 2018c). The concept of ecosystems has changed the view
from traditional inter-firm competition to a joint approach of
coopetition –simultaneous competition and cooperation –be-
tween actors (Moore 1996; Adner 2006; Pereira et al. 2017).
Prominent examples of service platforms are application
stores such as Apple’s App Store and social media platforms
such as Facebook, where complementors provide the majority
of complementary products or services –applications in the
case of the App Store and content in the case of Facebook. The
complementors are part of the ecosystem that is continually
enhancing the service platform and turning the value creation
process into a joint value co-creation process (Parker et al.
2017). In this regard, owners of service platforms foster a
loosely-coupled arms-length approach to integrating different
This article is part of the Topical Collection on The future of shared
services
Responsible Editor: João Leitão
*Andreas Hein
hein@in.tum.de
Jörg Weking
weking@in.tum.de
Maximilian Schreieck
maximilian.schreieck@in.tum.de
Manuel Wiesche
wiesche@in.tum.de
Markus Böhm
markus.boehm@in.tum.de
Helmut Krcmar
krcmar@in.tum.de
1
Technical University of Munich, Boltzmannstr. 3, 85748 Garching
bei München, Germany
Electronic Markets
https://doi.org/10.1007/s12525-019-00337-y

parties into their ecosystem (Ghazawneh and Henfridsson
2013,2015), while traditional companies use tight coupling
in the form of strategic partnerships to co-create value (Orton
and Weick 1990; Steensma and Corley 2000). This effect
becomes apparent at the boundaries between a service plat-
form and its ecosystem. The service platform provides bound-
ary resources in the form of application programming inter-
faces (APIs) or software development kits (SDKs) to facilitate
a scalable resource integration (Ghazawneh and Henfridsson
2013).
Research on value co-creation in service platforms mainly
focuses on the business-to-consumer (B2C) market. Research
objects are successful platforms such as Facebook (Lee et al.
2015), Uber (Teubner and Flath 2015), Airbnb (Zervas et al.
2017), or Apple’sAppStore(Eatonetal.2015). In contrast,
research on emerging business-to-business (B2B) platforms is
still sparse (Sarker et al. 2012; Förderer et al. 2018). However,
there are grounds to consider that value co-creation practices
between B2C and B2B platforms differ. First, the service eco-
system of B2B platforms is more complex compared to their
B2C counterpart. Internet of things (IoT) platforms, as an
example in the B2B market, cannot solely rely on third-party
developers to ensure value-adding services. The platform also
needs to encourage the participation of sensor manufacturers,
software and application companies, and consumers subject to
different, inhomogeneous environments (e.g., machines, pro-
cesses). Second, users are not private individuals but legal
organizations, which use the platform for business-critical
processes. Third, B2B services are more complex compared
to B2C services. In the case of IoT platforms, the platform
owner must provide device management, compatibility with
sensors and machines, and communication protocols to the
demand of industrial customers.
Accordingly, our research objective is to understand how
B2B service platforms foster value co-creation. From a the-
oretical perspective, we draw on the service-oriented frame-
work of Lusch and Nambisan (2015) to describe the actor-
to-actor (A2A) ecosystem, and the value co-creation process
connecting those actors. Based on the value co-creation
practice, we adhere to the principle of boundary objects
coined by Star (2010) to elaborate on the platform boundary
resources (Ghazawneh and Henfridsson 2010,2013) that
enable the value co-creation practice. Methodically, we fol-
low a multiple case study subject to three B2B service plat-
forms in the field of IoT (Yin 2014). We show that IoT
platforms transition toward an application enablement plat-
form (AEP) through the standardization of three value co-
creation practices: platform readiness on the user side, the
integration of complementary assets on the demand side,
and the servitization through application enablement as a
core value-adding service. In addition, we illustrate that a
potential consequence of those standardized practices are
residual co-creation mechanisms.
Theoretical foundations
We combine two theoretical perspectives to describe value co-
creation practices in B2B platforms. The service-dominant (S-
D) logic elaborates on how platforms co-create value in A2A
ecosystems (Lusch and Nambisan 2015). The theory of
boundary objects (Star 2010) and boundary resources in the
context of platforms (Ghazawneh and Henfridsson 2010,
2013) serves as a dynamic concept to illustrate how B2B
platforms facilitate value co-creation with their ecosystem.
Service-dominant logic
The process of value creation has shifted from a goods-
dominant (G-D) logic with a focus on tangible goods that
are created in the confines of an organization to a joint process
where value isco-created in an A2A ecosystem based on an S-
D logic (Chesbrough 2006; Vargo et al. 2008; Vargo and
Lusch 2004). The S-D logic focuses on the exchange of ser-
vices during which one actor uses a set of skills and
capabilities to benefit another actor. Lusch and Nambisan
(2015) developed a framework along the three dimensions
service ecosystem, service platform, and value co-creation to
explain the nature of service innovation. The framework is
well suited to describe value co-creation practices in B2B
platforms, as each dimension addresses different issues and
concepts related to platforms.
A service ecosystem is a community of interacting ac-
tors organized in an A2A network (Orlikowski 1992).
Actors in the A2A network co-evolve their skills and roles
in mutual dependency striving for effectiveness (Moore
1993;Adner2006). We adopt the definition of service eco-
systems proposed by Vargo and Lusch (2011) as a self-
adjusted, self-contained system of regularly loosely coupled
economic and social actors. A service ecosystem connects
different actors through services that foster mutual value
creation and a shared institutional logic. However, there
are three issues that scholars and practitioners need to con-
sider (Lusch and Nambisan 2015). First, the ecosystem
needs to provide structural flexibility and structural integri-
ty. Structural flexibility refers to how easily actors can col-
laborate within an ecosystem; it governs business agility
(Tilson et al. 2010). Structural integrity describes the rela-
tionship between the actors within an A2A network and
their degree of coupling, serving as an indicator for ecosys-
tem engagement (Lewicki and Brinsfield 2009). Second,
service ecosystems need to offer a shared worldview to
bridge the cognitive distance between involved actors
(Hendriks-Jansen 1996; Weick 1995). A shared worldview
in the form of standards or institutional logic ensures that
actors mutually interpret the integration of resources and
that they align more quickly on resource exchange (Lusch
and Nambisan 2015). Third, the service ecosystem needs to
A. Hein et al.

provide an architecture of participation. This architecture
facilitates the interaction between actors by applying trans-
parent rules and providing transparency with regard to the
actor’scontribution.
A service platform liquefies resources and enhances
resource density to facilitate an efficient and effective
exchange in a service ecosystem. We adopt the definition of
Lusch and Nambisan (2015) for a service platform as a mod-
ular structure that combines tangible and intangible resources
or components and coordinates the interaction of resources
and actors. Resource liquefaction refers to the decoupling of
information from a physical representation allowing it to be
shared in turn fostering generativity (Normann 2001; Tilson
et al. 2010). Resource density describes the speed with which
resources can be mobilized for an actor (Normann 2001;
Lusch et al. 2010). A layered-modular architecture facilitates
either functional designs leading to different core value prop-
ositions or cross-design hierarchies creating new value prop-
ositions (Baldwin and Clark 2000). Such an architecture al-
lows for the scalable coordination of service exchanges to
generate more opportunities for value co-creation and service
innovation. The modular architecture engenders the need for
platform governance. The associated rules define the way in-
teractions in the A2A network are governed, ranging from an
open policy to restrictive rules (Lusch and Nambisan 2015;
Benlian et al. 2015;Heinetal.2016; Schreieck et al. 2018).
The co-creation of value describes the process of value
creation between actors within a service ecosystem on a ser-
vice platform. From the S-D-logic, actors can take different
roles in the process of value creation. S-D logic differentiates
between the service offerer and the service beneficiaries. The
beneficiaries can take the roles of an ideator, designer, and
intermediary (Lusch and Nambisan 2015). The ideator distrib-
utes knowledge about needs in a specific context and inte-
grates it into new market offerings. The designer mixes and
matches resources or knowledge to develop new services. The
intermediary distributes and shares knowledge across multiple
service ecosystems. Each role integrates existing resources
and knowledge with peers in the ecosystem, resulting in new
service opportunities. To optimize opportunities for value co-
creation, the platform needs to establish transparency about
who ecosystem actors are, what and whom they know, and
what they can do (Schreieck and Wiesche 2017). There are
three issues that scholars and practitioners should address
(Lusch and Nambisan 2015). First, the platform needs to fa-
cilitate interaction in a service ecosystem. The more actors
interact, the more they learn from one another, which deter-
mines what they can do as actors. Second, the institutional
logic such as organizational structures, roles, and processes
needs to be aligned with new value co-creation services.
Third, clarifying and communicating the platform’srules
and protocol is essential to resolving intellectual-property
issues.
Boundary resources
Accounting for the issues raised by Lusch and Nambisan
(2015), we introduce the principle of boundary resources to
illustrate how a service platform facilitates the co-creation
process in a service ecosystem and how boundary resources
can help to resolve those issues. Star and Griesemer (1989)
proposed the notion of boundary objects in the social sciences
to explain how different groups interact in the absence of
consensus.
A crucial step to make information compatible across di-
vergent groups is standardization. The process of standardiza-
tion provides a common ground between different groups by
introducing a ‘lingua franca.’In this regards, boundary objects
help to provide a strong structure for individual needs and a
weak structure to maintain a common identity across different
groups (Star and Griesemer 1989). Table 1illustrates a non-
exhaustive list of four types of boundary objects. Each type
provides a shared structure through interpretive flexibility,
work processes, and movement between ill-, and well-
structured representations.
Interpretive flexibility describes differences in the use and
interpretation of objects. An example could be a map with
which one group looks for camping sites, while the other
group looks for hiking routes. The boundary object provides
structural flexibility as every group can adapt it to their spe-
cific context. In addition, the map is robust enough for both
groups to be able to exchange information about different
locations. This characteristic fosters structural integrity, as
specific knowledge can be shared between groups (Star and
Griesemer 1989).
Work processes relate to the form in which data is orga-
nized (e.g., through routes, locations, GPS data). In a reposi-
tory, for example, the archivist extracts metadata from a book
and puts it into a standardized system or library. The archivist
adheres to a standardized method or protocol by first liquefy-
ing information from physical resources (e.g., books) and then
mobilizing the records (resource density) to a variety of users
who can borrow or use it (Star and Griesemer 1989).
Last, there is the transition from ill- to well-structured rep-
resentations. This characteristic illustrates that boundary ob-
jects are not a static concept but exist simultaneously in an
abstract form across a variety of disciplines (ill-structured),
while also being useful in a specific context for a distinct
group (well-structured) (Star 2010). This characteristic is cru-
cial when describing the origin and development of boundary
objects.
Star (2010) emphasizes the development of boundary ob-
jects through the dynamic process of standardization (see
Fig. 1). In an analogy to a map, people try to control the
tacking back-and-forth between abstract and specific repre-
sentations. An example is to standardize coordinates, data-
bases, and different representations of maps in a geographical
Value co-creation practices in business-to-business platform ecosystems

information system (GIS). The former boundary object (map)
becomes an infrastructure (GIS), which resolves the tension be-
tween local and global perspectives (Star and Ruhleder 1996).
However, standardization tends to throw off residual categories,
as the infrastructure cannot account for all possible interaction
scenarios. In the process of residualization, new user groups in-
hibit the residual and begin to start a new boundary object. Out of
this development, a cycle is born (Star 2010).
Platform research adopted the concept of boundary objects
and coined it boundary resources to explain the arms-length
relationship between the platform and its ecosystem through
software development kits (SDKs) or application program-
ming interfaces (APIs). Boundary resources use the innova-
tion network literature to describe how B2C platforms govern
their ecosystem (Ghazawneh and Henfridsson 2010,2013)or
how boundary resources emerge and evolve based on the in-
teraction between different actors through the process of dis-
tributed tuning (Eaton et al. 2015). The boundary resources
can enhance the scope and diversity of a platform like in the
introduction of ARKit in the iOS ecosystem in the process of
resourcing. Furthermore, the platform owner can increase the
control over services in the process of securing (Ghazawneh
and Henfridsson 2013). More recent research emphasizes the
design of knowledge boundaries in B2B platforms (Förderer
et al. 2018). While especially the latter study addresses the
point of how a platform can design knowledge boundaries, it
remains unclear how B2B platforms co-create value with their
ecosystem. Thus, we adhere to the S-D logic and the three
building blocks of a service platform, which connect a service
ecosystem through value co-creation (Lusch and Nambisan
2015). We combine the three building blocks with the dynam-
ic concept of boundary objects (Star 2010)todescribehow
IoT platforms transitioned toward an application enablement
platform (AEP) by standardizing value co-creation practices.
Tab le 2summarizes how boundary objects (Star and
Griesemer 1989;Star2010) and boundary resources in the con-
text of platforms (Ghazawneh and Henfridsson 2010,2013;
Eaton et al. 2015) can account for issues raised in the S-D frame-
work (Lusch and Nambisan 2015) to describe value co-creation
practices in service platforms.
Boundary
Object
Standardization
Residual
Residualization
ProcessOutput
Infrastructure
Fig. 1 Relationships between
standards and residuals in the
dynamic concept of boundary
objects (Star 2010;Stegeretal.
2018)
Table 1 Types of boundary objects (according to Star and Griesemer (1989))
Type Description Example
Repositories Repositories are specific arrangements of objects that are indexed in a standardized way.
Objects are arranged as modules and can be used according to different purposes
Library, archive
Ideal type Ideal types arise from different degrees of abstraction. They serve as a means of cooperating between
different parties through the deletion of local contingencies from a real-world object
Species, atlas
Coincident boundaries Coincidental boundaries share the same boundaries but are subject to different internal contents.
An example is a map with which each party can work toward an individual goal but that also
allows for collaboration and communication
Maps
Standardized form Standardized forms are used to gather information that is compatible across divergent worlds.
A benefit is the complexity reduction as local uncertainties are deleted
Standardized
form, survey
A. Hein et al.

Research design
For the research design, we follow a multiple case research
strategy. The method is particularly suitable, as it captures and
describes the complexity of novel phenomena (Yin 2014;
Stake 1995). The multiple case study covers three B2B IoT
platforms that illustrate boundaries, features, and limitations,
by putting the S-D framework and the concept of boundary
objects into the context of the qualitative interviews, respec-
tive environments, and firms (Stake 1995;Merriam1988). A
cross-case analysis allows us to draw more robust conclusions
on value co-creation practices by contrasting and replicating
our findings from individual cases (Yin 2014).
Benbasatetal.(1987) provide guidance on whether
the usage of a case study is appropriate. First, it is
important to observe the utilization and development
of value co-creating practices in B2B platforms in a
context-dependent environment. Thus, we derive the da-
ta for the case studies through on-site interviews with
the platform owners, as ecosystem collaborations cannot
be observed from an external perspective (Eisenhardt
and Graebner 2007). Second, the tremendous success
of platform businesses such as Facebook and Uber show
the significance and relevance of the research topic.
While there are already established markets leaders in
the field of B2C platforms, B2B and especially IoT
platforms are not yet settled (Hein et al. 2018a). Thus,
there is a clear link to the contemporary event of
emerging B2B platforms. Additionally, neither control
nor manipulation of the subject or event took place, as
the case study describes the phenomenon in the view of
a neutral observer. Lastly, the phenomenon enjoys a
theoretical base building on value co-creation literature
but focusing on B2B platforms that have received little
attention so far. Furthermore, the value co-creation prac-
tices of B2B platforms are grounded in a real situation
described by case studies (Siggelkow 2007).
We sampled B2B platforms in the IoT context with an
already established ecosystem of actors. We chose IoT plat-
forms, as they are an emergent phenomenon co-creating value
with a variety of ecosystem partners (Shim et al. 2017). We
gathered the data for each case through semi-structured inter-
views on the site of three IoT B2B platform owners. We fo-
cused on employees that are directly involved with ecosystem
partners, as those could elaborate on the particular co-creation
practices. We chose semi-structured interviews as they pro-
vide room for improvisation and exploration of the underlying
phenomenon.
The interviews included questions subject to the actors in
the service ecosystem, the boundary resources provided by the
platform, and the process of value co-creation (Myers and
Newman 2007). In the first part of the questionnaire, our
questions focused on what actors contribute to the value co-
creation process in the platform ecosystem. According to the
Table 2 Summary of S-D specific issues on value co-creation and how boundary resources cccount for them (own illustration based on concepts of
Ghazawneh and Henfridsson (2013) and Lusch and Nambisan (2015))
S-D Dimension S-D Issue Boundary resources
Service ecosystem Structural flexibility/integrity Provide interpretive flexibility among groups. SDKs can provide a set of tools and
boilerplate codes that can be used by actors to create plug& play solutions on the
platform
Shared worldview Provide a weak structure connecting groups with a different institutional logic
Architecture of participation Standardized infrastructures provide an architecture of participation. Boundary
resources can provide an architecture of participation in service ecosystems,
which in turn influences the evolution of boundary resources through distributed
tuning
Service platform Resource density Work processes (standardized methods) and digital interfaces such as APIs provide
a process for liquefying information from physical sources. In the process of
resourcing, the scope of the platform can then be enhanced via the liquified
information
Define rules of exchange Work processes (standardized methods) provide a ‘lingua franca’among ecosystem
actors. Digital interfaces such as APIs provide a defined structure through
payloads and secure interfaces in an ecosystem
Value co-creation Facilitate interaction in ecosystem Standardized infrastructures resolve the tension between local and global
understanding, thus facilitating interactions. Digital interfaces and SDKs
facilitate interactions in an ecosystem
Adapt internal processes Well- and ill-structured characteristic of boundary resources provides interpretive
flexibility to account for internal processes
Transparency on resource integration Work processes (standardized methods) ensure transparency over (possible) ways
on how to integrate resources. Digital interfaces such as APIs secure a clearly
defined data structure
Value co-creation practices in business-to-business platform ecosystems

interviewees, those actors range from software developers to
sensor manufacturers to consulting companies to business
customers. Next, we asked specific questions on how the plat-
form owner integrates those actors in the ecosystem. Typical
examples are boundary resources such as APIs, SDKs, web
interfaces, and boundary spanning activities like on-site col-
laborations. Last, we focused on the process of value co-cre-
ation. An example is how the different actors integrate sensors
or software into the platform. Furthermore, we considered the
complexity aspects on the side of the platform owner by ask-
ing open questions addressing their position on value co-
creation.
In total, we conducted 11 face-to-face interviews (see
Tab le 3) from November 2016 to February 2017. We record-
ed, transcribed, anonymized and sent back the transcriptions
to the interviewees to provide additional comments. The final
transcripts were then used for data analysis. The authors
followed the guidelines of flexibility, non-direction, specific-
ity and range during the interviews to increase the received
value (Flick 2009) and paid attention to neutrality and a non-
judgmental form of listening (Patton 1990; Walsham 1995).
As for the data analysis, we followed the coding mecha-
nisms proposed by Strauss and Corbin (1996). We used the 11
interviews as data slices starting the process of open coding,
where we coded the concepts and codes word-by-word.
Examples are specific actors such as sensor manufacturing
companies, types of interaction such as strategic partnerships
with industry leaders or boundary resources through APIs.
After that, we conducted axial coding to describe the relation-
ships between codes. The results were constantly compared
with already coded slices to derive similarities between actors,
boundary resources, and value co-creation interactions. We
documented changes in relationships via the process of
memoing. Finally, we conducted a selective coding based on
the theoretical constructs of the S-D framework (Lusch and
Nambisan 2015) and dynamic process of boundary objects
(Star 2010) to derive core categories that are robust along all
three cases describing value co-creation practices (Urquhart
2012).
Results
The interviews indicate that B2B IoT platforms struggled with
three issues when it comes to fostering value co-creation in
their ecosystem. First, the ownership of products and services
was unclear. This problem states that ownership rights for
data, applications, and services are unclear from the partner’s
point of view, as described by the Strategic Innovation
Manger of Alpha. Second, B2B customers account for special
requirements, like the need for stable services, compliance
with security, regulations, or high-quality standards. A
Developer from Beta described, BHe [the customer] asked
whether the solution is in conformance with the data protec-
tion laws for health insurance firms. He showed me how strict
the regulations are.^Third, B2B customers have an inhomo-
geneous and highly specialized landscape of machines, pro-
cesses, and systems. The Strategic Innovation Manager of
Alpha describes the fact that, BThere might be thousands of
machines. Machines, sensors, and thousands of possible use-
cases on top.^Thus, developers need special insight into the
customer’s department, machines, and processes to work on
IoT solutions.
To account for those problems, the platform owners intro-
duced an application enablement platform (AEP). The AEP
enables scalable resource integration by combining three val-
ue co-creation practices that foster interaction in its ecosystem.
In each practice, there are at least two distinct actors, each
Table 3 Firms and interviewees (own illustration)
Organization
(anonymized)
Description Duration
(mm:ss)
Role
Alpha Alpha is a leading business-to-business IoT platform. They provide industry solu-
tions through strategic partnerships and the combination of open services on
their platform. The platform targets clients in the enterprise and SME sector.
53:20
66:25
54:02
40:40
Innovation Manager
Business Development
Head of Sales
Director Machine-to-Machine
Communication
Beta Beta is one of the leading Cloud-Platform providers. Through acquisitions and
contribution in Open Source software, Beta has established a scalable cloud
architecture. This architecture is a prerequisite and the basis of the IoT platform.
The IoT platform on top of this architecture provides several industry-specific
solutions and building blocks in the area of IoT.
53:44
55:28
49:34
63:16
45:00
61:10
Knowledge Manager
Consultant Sales
Platform Architect
Technical Consultant
Platform Architect
Application Developer
Gamma Gamma is an IoT platform start-up. The firm focuses on OEMs in the automotive
industry. They use technical and industry expertise to provide solutions for
specific use-cases on their platform. Due to the company size, the number of
interviewees was limited to the CEO.
86:22 Chief Executive Officer
A. Hein et al.

subject to their own institutional logic and connected through
boundary resources (see Table 4).
Integration of complementary assets
The co-creation practice integration of complementary assets
describes relationships that target the supply-side of an IoT
platform. Instead of creating each service, sensor, and appli-
cation by themselves, platform owners aim to provide an in-
frastructure that enables partners to self-integrate their re-
sources. Partners want their resources to be on the platform
to access the installed base of users in the platform ecosystem
and thus obtain market access. Therefore, the platform pro-
vides boundary resources like web interfaces, APIs, SDKs,
and documentations to enable partners to integrate and devel-
op complementary assets. In addition, the platform adheres to
boundary spanning activities to align with industry partners to
implement vertical solutions.
One role of a partner is a device manufacturer providing the
hardware and integrating it into the platform to comply with
the standards, applications, and services provided by the plat-
form owner. For the platform, each new device integrated into
the platform is beneficial for the installed base of customers.
In turn, each new device increases the perceived value of
customers to join the platform. This beneficial relationship
between supply and demand underpins the positive cross-
side network effects. The Head of Sales of Alpha illustrates
this effect:
BAnd then we have an ecosystem of hardware partners.
[...] The primary motive ofthem [Hardware Partners] is
to be integrated. In the end, it is a win-win situation.
They are platform-ready [Platform services can be used
by customers] and they can provide their solution to all
of our clients, and our clients can use the convenient
plug & play hardware.^(Head of Sales, Alpha)
Besides hardware, services can be integrated into the platform.
For example, external partners can offer a text-to-speech ser-
vice on the platform. The integration of additional services
and devices makes sure that the IoT device and application
landscape becomes a modular part of the platform ecosystem.
The resulting heterogeneity of service offerings in the ecosys-
tems tackle the variety of the customers’landscapes, and pro-
vides an easy-to-use toolkit solution for them. The Head of
Business Development of Alpha and several interviewees from
Beta indicate that their clients utilize third-party applications
and services that were integrated by partners into the platform.
An example is the offering of text-to-speech services, which
are integrated through standardized protocols and services to
fit the toolbox solution.
The interviews indicate that not all practices apply to this
standardized self-integration. The Director of Machine-to-
Machine Communication of Alpha emphasizes that applica-
tions developed by customers are often too specific to be of
any value for other customers. In those cases, the platform
owner evaluates the applicability and value-add for other
Table 4 Value co-creating practices within application enablement platforms (own illustrationn.)
Integration of complementary assets
(demand-side)
Ensuring platform readiness
(supply-side)
Servitization through application
enablement
(core practice)
Actors Platform owner, partner, and customer Customer, partner, and platform owner Platform owner and customer
Institutional logic toward
value co-creation
Platform owner wants to incorporate
sensors, services, applications to
increase the value of the platform
Customer wants to join the platform to
benefit from services such as device
management or data analytics
Platform owner wants to increase the
profit by providing PaaS services
and infrastructure including plug &
play applications
Partner wants to sell sensors, services,
applications to an installed-base
provided by the platform
Platform owner wants customers to
join the platform to increase profits
Customer wants to develop toolkit
solutions by providing department
and end-customer insights/data
Customer develops a specific
application that could prove useful
for other customers
Partner in form of consultancy firms
want to ensure platform readiness
for customers to increase profits
Boundary resources Web interface for self-service integra-
tion; APIs, SDKs, documentation
for unique applications; boundary
spanning activities like on-site of-
fices for strategic partnerships
Documentation and how-to guides;
consulting as boundary spanning
activity
IoT platform that enables customers to
develop applications
Example Development of industry solutions
with partners like manufacturing or
automotive. Integration of new
devices and services (e.g.,
text-to-speech)
Enabling customers to comply with
platform standards like JSON and
MQTT. Showing potential of
platform utilization
Change from physical to remote
maintenance to predictive
maintenance
Value co-creation practices in business-to-business platform ecosystems

customers and abstracts the application to match a broader
group of users.
Last, the Knowledge Manager of Beta points out that the
platform is in close collaboration with industry leaders.
Together they combine industry-specific knowledge with
technological IoT expertise to create industry-specific vertical
solutions. Those packages range from industries such as
manufacturing to insurance to energy.
The seamless integration of partners into the standardized
and modularized platform architecture further shows that cus-
tomers need to adapt their environment to comply with the
services, which leads to the next value co-creation practice
within an AEP.
Ensuring platform readiness
The second value co-creation practice targets the demand-side
by ensuring customers’platform readiness. The standardized
value co-creation service follows a self-service integration
logic. The platform provides documentations and how-to
guides to enable customers to join the platform.
However, due to the complexity of each customer’spro-
cesses, machines, and sensors involved, there are consultancy
companies bridging the gap between the platform and cus-
tomers. Customers provide insights into their products, ser-
vices, and data, while the consulting company acts asa bound-
ary spanner offering technical, IT, and strategic expertise.
Together, they adjust the technical landscape to comply with
the standardized platform infrastructure. Those collaborations
show the potential of new, IoT-enabled solutions whenjoining
the platform. The Technical Solutions Leader of Beta empha-
sized this point:
B[…] and if they [customers] now want to optimize their
products or processes, they cannot do so due to the lack
of software developers. If he [client] wants a solution
from sensors to analytics to insights, he needs a compe-
tent partner. A typical example is our partner [IT con-
sulting firm]. They enable the customer to join and use
the platform.^(Technical Solutions Leader, Beta)
The example shows that the practice of ensuring platform
readiness is a co-creation process between external platform
partners such as consulting firms and the client who is in need
of technical change to comply with platform standards or
wants to implement IoT applications.
Servitization through application enablement
The practice of servitization through application enablement
describes the core co-creation practice between the platform
owner and the customer. Both, the integration of complemen-
tary assets (supply) and the assurance of platform readiness
(demand) are pre-conditions for this facilitating co-creation
practice. The platform owner provides a standardized and
modularized platform-as-a-service (PaaS) infrastructure in-
cluding all the assets from the ecosystem. Customers use the
PaaS infrastructure as a boundary resource, which they adopt
to their institutional logic including machines, departments,
and processes.
This practice enables customers to develop their own apps
on a public, dedicated, or on-premises PaaS infrastructure, in
addition to the plug & play applications that are offered on the
platform. The offering of these three different deployment
categories provides a solution for the ownership problem
and considers external factors such as compliance with data
privacy laws. With the option of a dedicated infrastructure, the
customer can decide where the data center is located. The
Knowledge Manager of Beta points out that it is important
to have the data stored in countries with strict data protection
laws. Firms also may run the system via an on-premises solu-
tion on their hardware.
Besides the technical infrastructure, the value co-creation
practice also enables customers to build their applications with
a toolkit solution. The Head of Sales of Alpha explains:
BWe provide them with 70 - 80% of the solution - stable
solutions in the field of mobile communication and de-
vice management […] we deliver 80% of the solution
they need. The client can concentrate on their core busi-
ness and their sensor data. This enables us to do what
we do.^(Head of Sales, Alpha)
Those toolbox services enable customers to create solutions
through the combination of existing applications. A good ex-
ample of a specific solution resulting from a toolkit applica-
tion is provided by Alpha.Here,theHead of Business
Development explains that a customer used a package for
GPS tracking to build an application that helps their end-
users in the maritime industry to track cargo ships. They used
the non-specific tracking services to build the application.
They added geo fences via drag & drop to be notified when-
ever ships leave or enter a harbor. The platform owner provid-
ed the customer with a toolkit of applications to build their
own, value co-created solutions for unique scenarios. This
example illustrates that new, differentiating activities (well-
structured) result from the combination of abstract non-
differentiating (ill-structured activities) offered by the plat-
form owner. The Strategic Innovation Manager of Alpha de-
scribes this phenomenon as B[...] a clever bundling of services
may lead to innovations thatdid not exist before.^ATechni c a l
Consultant of Beta concludes:
B[...] you always find something you can take advantage
of. You do not need to invent everything [service/applica-
tion] by yourself, which is a gain in time or inspires you to
A. Hein et al.

come up with new ideas. When you join our platform, you
will find many services that you can combine, and you
come up with new ideas as to how to develop a new busi-
ness model.^(Technical Consultant, Alpha)
Overall, the core value co-creation practice of an AEP facili-
tates the supply in the form of a toolbox solution of pre-
configured applications, sensors, and services, and a demand
side of customers that are ready to use those services. The
modularity and standardization enable servitization –B[…]
so [that] our client can just use the service.^,astheHead of
Sales of Alpha concludes.
Discussion
We discuss the findings along the three main value co-creation
practices targeting the supply-side through the integration of
complementary assets, the demand-side in the form of ensur-
ing platform readiness, and the core value-adding service as
servitization through application enablement. For each value
co-creation practice, we identify value co-creation mecha-
nisms that result from standardization and residualization of
the co-creation practices (Star 2010).
From a theoretical perspective, we draw on the S-D frame-
work (Lusch and Nambisan 2015) in combination with the
dynamic concept of boundary objects (Star and Griesemer
1989; Star 2010) and boundary resources in the context of
platforms (Ghazawneh and Henfridsson 2013) to describe
how the platform implemented each value co-creation
practice.
Supply-side value co-creation practice
The supply-side value co-creation practice of integrating com-
plementary assets involves a supplying entity and an integrat-
ing entity. Both institutional logics are connected through
boundary resources. Figure 2shows the main value co-
creation practice (gray box) and three instantiations or mech-
anisms in the form of self-service integration, integration
through abstraction, and strategic integration.
Self-service integration describes the standardized process in
which the partner uses the platform boundary resources in the
form of documentation, how-to guides, APIs, and SDKs to inte-
grate its products or services on the platform. The platform acts
as an infrastructure that is both abstract to apply to a wide range
of actors such as device manufacturers, service providers, or
application developers, and specific to be applied to the institu-
tional logic for each of the integration partners. The partners use
APIs and SDKs as a standardized form to integrate products or
services and to make them comply with platform standards. The
standardized form provides a shared (data) format for integrating
products or services (Star and Griesemer 1989). Also, partners
use boundary resources such as documentations and how-to
guides as coincident boundaries similar to a map to create new
boundary resources like documentation, boilerplate code, and
further information so that other users on the platform can use
the integrated products or services. The newly created boundary
resources, like boilerplate code, are vague, thus providing an ill
abstraction to bridge the gap between the product or service and
the users on the platform who are going to apply it to a variety of
use cases. There are parallels to other industries (Weking et al.
2018a;Wekingetal.2018c). However, the IoT platform needs to
bridge a wider gap when it comes to interpretive flexibility and
the adaption of internal processes on the customer side compared
to other platforms. While complementors in app stores only need
to provide information on how to use the app, IoT
complementors also need to provide the code on how to embed
their product or service in a wide range of customer landscapes.
The mechanism of self-service integration scales to the end of the
platform, as the platform only provides the standardized work
process and the partner collaborates in a loosely coupled relation-
ship toward this goal.
Integration through abstraction is a residual value co-
creation mechanism where the platform owner uses specific
applications provided by customers to aggregate them toward
broad applicability among users. Compared to the standardized
mechanism of self-service integration, the integration through
abstraction results from customers who want to monetize inter-
nally developed applications. First, customers use boundary
resources such as APIs and SDKs as standardized forms to
develop specific applications as ideal types for their own use.
Customers then would like to monetize those applications on
the platform. However, the application of the customer is too
specific to the customer’s situation to be of any use for other
customers. Then, the platform owner steps in and aggregates
the specific application as a new boundary resource in the form
of an ideal type (Star and Griesemer 1989). Both parties work
as a designer, the customer providing the idea in the form of a
specific application, and the platform owner providing the stan-
dardized abstraction that can be offeredtoavarietyofplatform
users. While the relationship is loosely structured as most of the
interaction is done via standardized boundary resources, the
relationship is not scalable, as both parties act as designers.
There are similar value co-creation mechanisms as illustrated
by the LEGO platform, in which customers can propose
LEGO-specific boxes that are then produced and sold by the
platform (Schlagwein and Bjørn-Andersen 2014). When com-
paring the LEGO with the IoT mechanism, the process on
LEGO is already standardized and scalable for the platform,
while the residual mechanism on the IoT platform still demands
the effort of both parties to integrate the application.
Strategic integration is the second residual process and
subject to the collaboration between the platform and a strate-
gic partner. Both parties aim to develop a vertical solution that
provides end-to-end support for industries such as automotive
Value co-creation practices in business-to-business platform ecosystems

or equipment manufacturing (Schreieck et al. 2017). Those
industry solutions cover the full lifecycle from design, to sup-
ply, to production, to operations, and to maintenance. The
scope of vertical solutions demonstrates the complexity of
the development task and the mutual understanding needed
of both parties. According to the interviews, the IoT platforms
foster this strategic alignment through boundary spanning ac-
tivities in the form of on-site offices, where personnel of both
parties work together. There are various other examples of
strategic partnerships that are used to increase the value of a
platform such as the collaboration of Apple and IBM to tackle
business applications. Due to the tight coupling partnership,
the value co-creation mechanism scales on neither side (Hein
et al. 2018b).
Demand-side value co-creation practice
The demand-side value co-creation practice of ensuring plat-
form readiness involves a demanding and an enabling entity.
Both institutional logics are connected through boundary
Tight
coupling
Loose
coupling Actor Boundary resource
noitazidradnatS
Integration of complementary assets
Boundary resources
Self-service integration
Integration through abstraction
noitazilaudiseR
Supplying entity Integrating entity
Partner
Ideator: provides documentation,
code snippets, and information
about products and services
Designer: integrates products and
services into platform
Platform owner
Service offerer: provides boundary
resources
Boundary resources:
documentations and
how-to guides
(coincident boundaries)
APIs, and SDKs
(standardized form)
Boundary resources:
customer applications
(ideal types)
APIs and SDKs
(standardized form).
Customer
Designer: designs company-, or
process-specific application
Intermediary: offers application with
subject to a specific content on IoT
platform
Platform owner
Designer: develops aggregated
version of application applying to a
variety of companies/industries
Strategic integration
Partner
Ideator: provides industry-specific
knowledge
Designer: develops vertical
solutions in alignment with the
platform owner
Platform owner
Ideator: provides insights about the
platform and customer needs
Designer: develops vertical
solutions in alignment with the
partner
Boundary resources:
strategic alignment
through boundary
spanning activities (e.g.
on-site offices)
noitazilaudiseR
Fig. 2 Supply-side value co-creation practice of integrating complementary assets (own illustration)
A. Hein et al.

resources. Figure 3shows the main value co-creation practice
(gray box) and two instantiations or mechanisms in the form
of self-service readiness and supported readiness.
Self-service readiness describes the standardized value co-
creation mechanism of a customer that uses platform resources to
comply with platform standards. In this scenario, the platform
provides transparency of a working process on how to comply
with platform standards by providing boundary resources as co-
incident boundaries such as documentation and how-to guides
(Star and Griesemer 1989). Customers act as service beneficia-
ries by applying those boundary resources according to their
institutional logic (e.g., machines, sensors, and uses cases) to
update their infrastructure to comply with platform standards.
The platform acts as an infrastructure, in which customers can
opt in a loosely coupled relation to the platform. Thus, the co-
creation mechanisms scale to the end of the platform owner, as
the customers themselves need to ensure platform readiness. An
example in the IoT context are customers who joins the platform,
read the documentation and how-to guides, and set-up their in-
frastructure to support communication protocols such as MQTT.
Similar self-service co-creation mechanisms can be found across
a variety of industries. Companies usually provide boundary
resources like manuals (e.g., app-development guidelines or as-
sembly instructions) with the aim to create transparency over a
working process through instructions on how to use and assem-
ble products or services.
Supported readiness is a residual that results from the stan-
dardized mechanism of self-service readiness. The value co-
creation mechanism mitigates relationships between cus-
tomers and the platform that are not able to follow the self-
service readiness mechanism. A reason is the low structural
flexibility, where customers lack the capabilities to use avail-
able boundary resources to comply with platform standards.
To mitigate this issue, customers collaborate with consultan-
cies that act as boundary spanners in a tightly coupled rela-
tionship. The customer provides insights about machines, sen-
sors, and potential use-cases, while the consultancy uses its
knowledge about platform standards and feasible use-cases.
As both parties need to establish a mutual understanding of
each other’s institutional logic, they need to work closely
noitazidradnatS
Ensuring platform readiness
Demanding entity Enabling entity
Boundary resources
Self-service readiness
Platform owner
Service offerer: provides boundary
resources
Customer
Ideator: provides insights about
machines, sensors, and use-cases
Designer: replaces/updates
machines, sensors, and uses-cases to
comply with platform requirements
Boundary resources:
documentations and
how-to guides
(coincident boundaries)
Supported readiness
Customer
Ideator: provides insights about
machines, sensors, and use-cases
Designer: jointly replaces/updates
machines, sensors, and use-cases to
comply with platform requirements
Consultancy
Boundary spanner: uses knowledge
about the platform to replace/update
machines, sensors, and use-cases to
comply with platform requirements
Boundary resources:
consultancy acts as a
boundary spanner
between the platform
and customer
noitazilaudiseR
Tight
coupling
Loose
coupling Actor Boundary resource
Fig. 3 Demand-side value co-creation practice of ensuring platform readiness (own illustration)
Value co-creation practices in business-to-business platform ecosystems

toward the common goal of ensuring platform readiness. Due
to this tight-coupling collaboration, the value co-creation
mechanisms scale on neither side. Again, similar mechanisms
can be found in other industries. Apple, for example, uses
employees from Genius Bars as boundary spanners to help
customers use their products or services. In total, this support-
ed readiness illustrates how IoT platforms bridge low struc-
tural flexibility by a boundary spanner.
Core value co-creation practice
Last, there is the core value co-creation practice of
servitization through application enablement that combines
demand- and supply-side practices. The IoT platform acts as
a repository connecting customers with the applications and
services on the platform. This set-up enables the customer to
create his or her own applications (see Fig. 4). On the one
hand, demand-side value co-creation practices ensure that cus-
tomers meet the conditions to use the IoT platform in a plug &
play manner. On the other hand, supply-side practices foster
resource liquefaction by decoupling information that is avail-
able by ecosystem actors such as partners and providing it in
an abstracted form on the platform. Furthermore, the platform
makes sure that all products and services on the platform com-
ply with the platform standards. In this sense, both value co-
creation practices standardize demand and supply to enable
the core value co-creation interaction. The customers use the
IoT platform as a repository of abstract applications and ser-
vices. Each application and service can be seen as an ideal
type. On an abstract level, a wide range of customers can
use each application or service autonomously. However, if a
customer applies the app to a specific context, the interpreta-
tion of applications changes and transforms toward a specific
application that fits the need of a distinct institutional logic.
An example is the abstract application of setting-up geo-
fences on a map, where a specific use case can be the tracking
of cargo-ships in the maritime industry. In this process, cus-
tomers combine the applications and services according to
their institutional logic to foster generativity. The platform
mitigates the problem of data ownership by allowing cus-
tomers to use the IoT platform on a dedicated or on-premise
solution. Also, the platform addresses special requirements
targeting availability and security by enabling customers to
create applications that fit their institutional logic.
In sum, we show that an AEP co-creates value in three
distinct ways. First, the B2B platform tackles the problem of
engaging a variety of actors through resource liquefaction on
the supply side to make sensors, applications, and services
available on the platform. Second, the platform accounts for
the complexity of customers’institutional logic by ensuring
platform readiness in a standardization process where cus-
tomers comply with platform standards. Third, the platform
facilitates interaction between the supply and demand side by
enabling customers to use the AEP as an abstract plug & play
toolkit according to their own, specific context. This shifts the
satisfaction of special needs, like security, to the customer.
Implications, limitations, and future research
The study provides three implications for theory. First, we
show that the S-D framework (Lusch and Nambisan 2015)
and the dynamic concept of boundary objects (Star and
Griesemer 1989;Star2010) complement one another regard-
ing the description of value co-creation practices. Boundary
objects account for S-D related issues like structural flexibility
or provide a shared worldview through a standardized work
process that creates boundary objects. One example is the
value co-creation process of ensuring platform readiness,
where the platform provides boundary resources such as doc-
umentations and how-to guides to provide a structure for cus-
tomers on how to adjust machines, sensors, and processes.
Those boundary resources serve as coincident boundaries
(e.g., maps) helping customers to comply with platform stan-
dards ensuring structural flexibility. The platform follows a
similar mechanism on the supply side. Boundary resources
such as APIs and SDKs enable a variety of ecosystem actors
to integrate complementary assets on the platform. Thus, the
platform fosters resource liquefaction and increases resource
density, as the resulting applications and services can be
shared and used in the platform ecosystem. Those applications
and services are boundary resources that are abstract (ill-
structured) to be interpreted among different groups and, at
Servitization through application enablement
Customer
Ideator: provides insights about
machines, sensors, and use-cases
Designer: develops applications for
own use
Platform owner
Intermediary: provides toolkit
applications, protocols, PaaS, SDKs,
and APIs.
Boundary resources:
IoT Platform (PaaS)
(repository)
Self-service readiness
Supported readiness
Self-service integration
Integration through abstraction
Strategic integration
Tight
coupling
Loose
coupling Actor Boundary resource
Fig. 4 Core value co-creation practice of servitization through application enablement (own illustration)
A. Hein et al.

the same time, concrete (well-structured) in a specific institu-
tional context. We show that the combination of S-D logic and
boundary objects is a fruitful combination to account for po-
tential issues in the value co-creation process such as provid-
ing structural flexibility (Lusch and Nambisan 2015). In addi-
tion, we supplement existing literature on platform boundary
resources (Ghazawneh and Henfridsson 2013; Eaton et al.
2015) by showing how B2B IoT platforms use and combine
different types of boundary objects (e.g., ideal types, coinci-
dent boundaries, standardized forms, and repositories) in the
process of value co-creation.
Second, we show the importance of value co-creation prac-
tices in B2B IoT platforms to follow the dynamic process
toward standardization (Star 2010). The case study presents
insights on how platforms implement standardized work pro-
cesses to achieve scalable value co-creation practices that fos-
ter network externalities (McIntyre and Srinivasan 2017).
They do so by shifting the design effort outside of the platform
to make ecosystem actors comply with the standardized pro-
cess. Examples are the supply- and demand-side value co-
creation mechanisms of self-service readiness and integration.
In both cases, the customer/partner interacts in a loosely-
coupled relationship (Orton and Weick 1990)byadheringto
boundary resources such as documentation and how-to
guides. They adjust their institutional logic to comply with
platform standards. The loosely-coupled interaction scales to
the end of the platform. Parker et al. (2017)callthiseffect
Binverting the firm.^This standardization of value co-
creation practices offers another advantage in the form of in-
creased resource density. When partners integrate their re-
sources into the platform, they also comply with the standards
required by the platform. The platform orchestrates those ab-
stractions in a repository, which all other parties in the ecosys-
tem can access. This compatibility fosters network externali-
ties as once created application or service cannot only be used
by one individual customer but by the whole ecosystem. In
addition, this process fosters generativity in the network as
parties can use and combine applications and services accord-
ing to their institutional logic. The residual value co-creation
mechanism of integration through abstraction captures the
generativity caused by new applications that do not apply to
platform standards transforming specific applications toward
an ideal type. Through this feedback loop, customers benefit
from applications created by peer customers. However, the
residual process design effort lies on the platform side, limit-
ing the scalability. In summary, we show that the dynamic
standardization process of boundary objects can be applied
to value co-creation practices in B2B IoT platforms. The pro-
cess helps to explain how platforms act as infrastructures that
engage their ecosystem to utilize network externalities
(McIntyre and Srinivasan 2017; Constantinides et al. 2018;
Weking et al. 2018b). Furthermore, we show that the standard-
ization process fosters residual value co-creation mechanisms.
Third, the case study provides insights on B2B IoT value
co-creation practices (Constantinides et al. 2018). While pre-
vious studies focused on customer service encounters
(Giesbrecht et al. 2017) or sole platform to complementor
relationships (Sarker et al. 2012; Förderer et al. 2018), we
show how platforms account for a variety of ecosystem actors
ranging from sensors manufacturers to software developers,
and customers by fostering self-service value co-creation
mechanisms. The platform controls the process of external
contributions (Ghazawneh and Henfridsson 2013) and makes
ecosystem actors comply with platform standards. Instead of
controlling and integrating each product and service individ-
ually, the platform controls the input through strict rules and
boundary resources, allowing for a scalable resource integra-
tion. To deal with the business-related requirements of cus-
tomers, platforms take advantage of two different value co-
creation mechanisms. On the one hand, the platform provides
self-service readiness through boundary resources that make
the customer adapt to platform standards. On the other hand,
the platform conducts boundary-spanning activities to bridge
the gap between customers that are not able to follow the self-
service integration mechanism. Boundary spanning activities
such as partnerships with consultancies in the form of support-
ed readiness that help customers to align with platform stan-
dards. Those mechanisms aim to enable the customer to use
the applications and services on the platform like a toolbox,
where they can develop solutions to fit their individual needs
and internal processes (institutional logic). Last, there is the
complexity of IoT services that B2B value co-creation prac-
tices must account for. The value co-creation mechanism of
strategic integration hints toward the fact that loosely-coupled
relationships are not sufficient to standardize the complexity
of vertical solutions (Schermuly et al. 2019). On the contrary,
the platform relies on tight coupling and strategic partnerships
with industry experts to develop an abstract representation of
vertical solutions. Based on those industry-specific structures,
loosely-coupled partnerships can extend the platform offering
of new products or services (e.g., integrating a new sensor that
supports a specific production step).
Furthermore, there are implications for practice. First, we
show how B2B IoT Platforms integrate and facilitate value co-
creation practices toward scalable resource integration and
consumption. Second, practitioners can use the S-D frame-
work (Lusch and Nambisan 2015) in combination with the
theory of boundary objects (Star and Griesemer 1989;Star
2010) to analyze whether their value co-creation practices
have potential for standardization. Thus, platform owner can
design new value co-creation practices to shift the design ef-
fort outside of the platform, thus leveraging network external-
ities (Parker et al. 2017). In addition, we show that through the
standardization of value co-creation practices, companies
need to spend increased awareness of resulting residuals
practices.
Value co-creation practices in business-to-business platform ecosystems

Last, the study faces limitations. First, the study might not
be transferable to other industries because it builds on a mul-
tiple case study in the context of IoT platforms. Further studies
can conduct additional case studies in industries that are
evolving towards platform businesses to increase the general-
izability across industries (Yin 2014). Second, the interviews
cover only the platform owner perspective, which limits the
robustness of the findings. While we tried to mitigate this
limitation based on a sampling strategy that covers inter-
viewees with profound customer interaction (e.g., sales lead
and technical consultants), additional interviews with cus-
tomers could reveal more insights about the perspective of
ecosystem actors. Also, the findings are based on qualitative
data, thus providing only fist hunches of possible value co-
creation practices. Interesting areas for future research could
develop a process model on how platforms foster the standard-
ization of value co-creation practices and how residual value
co-creation practices emerge. Such a model would provide
answers about whether residuals originate as a consequence
of workarounds or if they can be strategically designed to
mitigate problems arising from structural flexibility (Eaton
et al. 2015). Also, are residual value co-creation mechanisms
going to be standardized as well and who is triggering this
process? Furthermore, the study focuses only on the mecha-
nisms that develop new products utilizing technology and
value co-creation. As an extension, Alves et al. (2016) identi-
fied two additional clusters, namely the co-creation experience
from the customer’s point of view, and the relationships be-
tween customers and platforms, which are not considered in
this case study. Thus, further interviews from the perspective
of the customers and partners could provide important insights
on those two aspects.
Conclusion
During the last years, we have seen a shift in how companies
create value. Starting from value creation processes inside the
firm, service platforms have emerged and turned the value
creation process into a mutual value co-creation process with
an ecosystem of actors. While there is research on how plat-
form leaders in the B2C business such as Facebook or Apple
co-create value, research on emerging B2B platforms is still
sparse. In contrast to B2C platforms, B2B platforms need to
establish value co-creation practices under more complex con-
ditions. They need to encourage a variety of ecosystem actors
and interact with customers that are harder to satisfy due to
their requirements as legal entities, and in an often more com-
plex environment. One particular example are IoT platforms
that need to integrate sensor manufacturers, service and appli-
cation developers, and industry customers by providing ser-
vices that range from device management to database storage
and data analytics.
We show that the combination of the service-dominant (S-
D) framework of Lusch and Nambisan (2015) with the dy-
namic process of boundary objects (Star and Griesemer 1989;
Star 2010) provides a fruitful combination to describe and
analyze value co-creation practices. By combining those two
theoretical perspectives, we can illustrate that IoT platforms
follow a standardization process to encourage the supply and
demand side to comply with industry standards. The resulting
application enablementplatform includes three main value co-
creation practices: the integration of complementary assets
representing the supply side, the assurance of platform readi-
ness for the demand side, and servitization through application
enablement as a core co-creation practice. The main achieve-
ment of platforms is the high degree of standardization of
value co-creation practices by shifting the design effort to
the ecosystem in turn leveraging network externalities. Also,
we show that a consequence of the standardization process are
residual value co-creation practices that result from customers
and partners unable to comply with platform standards.
Acknowledgements The authors would like to thank all anonymous
reviewers and the editors for their helpful comments and suggestions.
This research is funded by the German Research Foundation (Deutsche
Forschungsgemeinschaft –DFG) as part of the ‘Collaborative Research
Center 768: Managing cycles in innovation processes –Integrated devel-
opment of product service systems based on technical products’(TP C1),
and the Center for Very Large Business Applications (CVLBA)@TUM.
Also, this work is part of the TUM Living Lab Connected Mobility (TUM
LLCM) project and has been funded by the Bavarian Ministry of
Economic Affairs, Energy and Technology (StMWi) through the Center
Digitisation.Bavaria, an initiative of the Bavarian State Government.
Open Access This article is distributed under the terms of the Creative
Commons Attribution 4.0 International License (http://
creativecommons.org/licenses/by/4.0/), which permits unrestricted use,
distribution, and reproduction in any medium, provided you give appro-
priate credit to the original author(s) and the source, provide a link to the
Creative Commons license, and indicate if changes were made.
Publisher’snoteSpringer Nature remains neutral with regard to jurisdic-
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