# title
Software Components and Product Variety in a Platform Ecosystem: A Dynamic Network Analysis of WordPress

# abstract
Software components such as application programming interfaces (APIs) provided by external developers are vital to online digital platforms. Although APIs generally increase the variety of products according to anecdote, the precise relationship between the categories of APIs and product variety is not yet known. We find that APIs, regarding their use frequency, are categorized into three groups. The core is a group of frequently used APIs, whereas the periphery is a group of sparsely used APIs. In a large and mature platform ecosystem, an additional group of APIs, the regular core, mainly provided by third-party developers, emerges. APIs in the regular core are the main driver of product variety. However, we also find that the strength of this effect diminishes in a newly created product category when most of the new products are built by duplicating the usage of APIs from other products. A platform owner can stimulate developers creativity by acting as a bridge between digital product providers and third-party developers. It can collect functional needs from third-party developers and then share them with product providers. Therefore, the latter can build APIs that developers need. Software components, such as application programming interfaces (APIs), provided by both the platform owner and external developers in a platform ecosystem are vital to online digital platforms. These APIs are associated with functionality provided by the platform. A larger number of APIs used is generally associated with an increase in the platform ecosystems variety of products. However, the precise nature of the relationship between the use of APIs and product variety in a platform ecosystem is not yet known because of the lack of appropriate methodologies to analyze the complex data generated in such platform ecosystems. Drawing on a recombinatorial design perspective, we use a dynamic network model to create metrics for product variety in a digital ecosystem and study how the use of different types of APIs affects product variety. In particular, we theorize that, contrary to existing models, the structure of APIs in a large platform ecosystem is not limited to a coreperiphery structure, but includes an additional third layer that we refer to as the regular core. We further hypothesize that external APIs in the regular core play a crucial role in increasing product variety in the ecosystem. To test our hypothesis, we conduct an empirical study using longitudinal data of all available digital product (i.e., plug-in) source codes on WordPress.org, the worlds largest content management system and one of the most extensive digital platform ecosystems. By analyzing all of the plug-ins on WordPress over 10 years from its inception, we find the support of our three-layer structure of APIs in a platform ecosystem: complete core, regular core, and periphery. Our empirical analysis further supports the role of external APIs in the regular core in increasing product variety. We, however, find that the strength of this effect diminishes in a newly created product category. History: Param Singh, Senior Editor; Pallab Sanyal, Associate Editor. Funding: This work was supported by the Ministry of Education Singapore [Grants R-253-000-122-133 and T1-251RES1916], the National Science Foundation [Grants 1261977 and 1120966], and Club Informatique des Grandes Entreprises Franaises. Supplemental Material: The e-companion is available at https://doi.org/10.1287/isre.2022.1172 .

# publisher.label
Institute for Operations Research and the Management Sciences (INFORMS)

# authorList[]
Um, S., Zhang, B., Wattal, S., & Yoo, Y.