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The Double-Edged Sword of Backward Compatibility: The Adoption of Multigenerational Platforms in the Presence of Intergenerational Services

Author

Listed:
  • Il-Horn Hann

    (Robert H. Smith School of Business, University of Maryland, College Park, Maryland 20742)

  • Byungwan Koh

    (Haskayne School of Business, University of Calgary, Calgary, Alberta T2N 1N4, Canada)

  • Marius F. Niculescu

    (Scheller College of Business, Georgia Institute of Technology, Atlanta, Georgia 30308)

Abstract

We investigate the impact of the intergenerational nature of services, via backward compatibility , on the adoption of multigenerational platforms. We consider a mobile Internet platform that has evolved over several generations and for which users download complementary services from third-party providers. These services are often intergenerational: newer platform generations are backward compatible with respect to services released under earlier generation platforms. In this paper, we propose a model to identify the main drivers of consumers’ choice of platform generation, accounting for (i) the migration from older to newer platform generations, (ii) the indirect network effect on platform adoption due to same-generation services, and (iii) the effect on platform adoption due to the consumption of intergenerational services via backward compatibility. Using data on mobile Internet platform adoption and services consumption for the time period of 2001–2007 from a major wireless carrier in an Asian country, we estimate the three effects noted above. We show that both the migration from older to newer platform generations and the indirect network effects are significant. The surprising finding is that intergenerational services that connect subsequent generations of platforms essentially engender backward compatibility with two opposing effects. Whereas an intergenerational service may accelerate the migration to the subsequent platform generations, it may also, perhaps unintentionally, provide a fresh lease on life for earlier generation platforms due to the continued use of earlier generation services on newer platform generations.

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  • Il-Horn Hann & Byungwan Koh & Marius F. Niculescu, 2016. "The Double-Edged Sword of Backward Compatibility: The Adoption of Multigenerational Platforms in the Presence of Intergenerational Services," Information Systems Research, INFORMS, vol. 27(1), pages 112-130, March.
    • Handle: RePEc:inm:orisre:v:27:y:2016:i:1:p:112-130
    DOI: 10.1287/isre.2015.0615
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    3. Aslan Lotfi & Zhengrui Jiang & Ali Lotfi & Dipak C. Jain, 2023. "Estimating Life Cycle Sales of Technology Products with Frequent Repeat Purchases: A Fractional Calculus-Based Approach," Information Systems Research, INFORMS, vol. 34(2), pages 409-422, June.
    4. Xingyue (Luna) Zhang & Ruomeng Cui & Oliver Yao, 2023. "The version effect of apps and operating systems in mobile commerce," Production and Operations Management, Production and Operations Management Society, vol. 32(2), pages 637-654, February.
    5. Samer Faraj & Georg von Krogh & Eric Monteiro & Karim R. Lakhani, 2016. "Special Section Introduction—Online Community as Space for Knowledge Flows," Information Systems Research, INFORMS, vol. 27(4), pages 668-684, December.
    6. Sebastian Wai, 2022. "Software quality and backward compatibility in the video game industry," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 49(3), pages 545-570, September.
    7. Dohoon Kim, 2018. "Equilibrium Analysis for Platform Developers in Two-Sided Market with Backward Compatibility," Games, MDPI, vol. 9(4), pages 1-24, October.
    8. Martin Poniatowski & Hedda Lüttenberg & Daniel Beverungen & Dennis Kundisch, 2022. "Three layers of abstraction: a conceptual framework for theorizing digital multi-sided platforms," Information Systems and e-Business Management, Springer, vol. 20(2), pages 257-283, June.
    9. Tianshu Sun & Lanfei Shi & Siva Viswanathan & Elena Zheleva, 2019. "Motivating Effective Mobile App Adoptions: Evidence from a Large-Scale Randomized Field Experiment," Information Systems Research, INFORMS, vol. 30(2), pages 523-539, June.

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