Managing External Innovation: The Case of Platform Extensions

production process. As the number of steps in an interconnected process
increases, the process becomes increasingly difficult to complete successfully and
the time spent increases; therefore, the probability of success and the output
quality may decrease. Having a modular design reduces the range and scope of
potential cycles and this limitation results fewer cycles and less time spent on the
development process. As a result modularity will increase the probability of
success and the quality of the final output.
• Accommodating uncertainty by partitioning the design parameters into those that
are visible and those that are hidden. Hidden parameters are isolated from other
parts of the design, and are allowed to vary. Modular designs are flexible
therefore; if new knowledge later yields a better solution for one of the hidden
modules, then it will be relatively simple to incorporate the new solution without
having to change the rest of the system (Baldwin & Clark, 2000).
So the concept of modular architecture spans an important set of principles: design rules,
independent task blocks, clean interfaces, nested hierarchies, and the separation of hidden
and visible information. The modular platform architecture helps to focus development
efforts on developing specific modules without having to learn the whole system. As
well, it enables platform owners to keep control of the platform core architecture that is a
powerful barrier against competing architecture and protects the integrity of the platform
itself (Cusumano & Gawer, 2002; Messerschmitt & Szyperski, 2003).
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