The Integrated Networks Model: Explaining Resource Allocations in Network Markets

TLDR

The last decade has shifted focus from single‑firm value to the value created by networks of firms where assets are shared with external entities. The authors propose an Integrated Networks model that posits user, complement, and producer networks add value or enhance attractiveness of a focal product. They empirically test the model by surveying IT professionals about resource allocation decisions for Unix and Windows NT operating systems. Results show that the three networks’ value is positively linked to resource allocation and mediates the relationship between stand‑alone product performance and allocation.

Abstract

The last decade has witnessed a shift from a focus on the value created by a single firm and product to an examination of the value created by networks of firms (or product ecosystems) in which assets are comingled with external entities. The authors examine these market-based assets in the context of network markets and propose an Integrated Networks model in which three types of networks—user, complements, and producer—add value or enhance the attractiveness of the associated focal product. The authors empirically test the proposed model by surveying information technology professionals on their resource allocation decisions regarding the Unix and Windows NT operating systems. The findings suggest that the value added by these three networks is significantly and positively associated with resources allocated by business customers to competing products. The results also show that the three networks mediate the relationship between stand-alone product performance and resource allocation.