Single Homing vs Multihoming
Multihoming essentially means being connected to more than one network, usually for increased reliability, resilience or performance.
In the context of platformsOpens in new window, it simply means participating in more than one platform.
For example, an application developer may decide to offer its app on both iOS and Android platforms (multihoming on the producer side), while many individuals only use one mobile phone and therefore need to commit to a given platform or “single home” with, say, either iOS or Android.
The decision to single home or multihome is typically driven by a cost-benefit analysis that will need to answer the following questions:
- How expensive is it to affiliate to more than one platform?
- What are the added benefits of doing so?
- How easy is it to switch between platforms?
This is an important concept since the decision between single homing and multihoming by users and producers will determine to a large extent how easy it will be for the platform to reach a critical massOpens in new window and gain market power. For example, while it may be more difficult to ignite a platform when users single home, if successful the platform then becomes more valuable since a critical mass of users are committed.
Of course, the platform itself can shape the decisions of its participants by trying to seek exclusivity (e.g. for game developers to single home), reducing switching costs from other established platforms (e.g. by offering a “converter” or compatibility with other platform features) or trying to appear as the “winning” platform, through advertising and endorsements, to make sure users don’t feel the need to look elsewhere.
Also in this series include:
- Richard L. Daft and Norman B. Macintosh, “The Nature and Use of Formal Control Systems for Management Control and Strategy Implementation,” Journal of Management 10 (1984), 43 – 66
- Laure Claire Reillier, Benoit Reillier, “Platform Strategy: How to Unlock the Power of Communities and Networks to ...”