Abstract

Standards and compatibility issues play a significant role in the software industry. Often, there are no uniform industry wide standards in a standards immature market. To overcome the lack of standards, firms in this market aim to establish alliances. In this work, we adopt a new research framework called network theory drawn from sociology research to represent the complexity of this market. This improves upon traditional microeconomic perspectives by addressing indirect relationships and their causal effects. We also introduce a concept called socio technical capital as substitute measure for a firm’s clout or position among other firms. Using this approach we are able relate alliance formation by business application software firms and compatibility issues. The results of an ongoing study are presented to substantiate this approach.

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