The paper examines how the emergence of a standardized open platform connecting previously independent products affects firms’ product diversification. I examine a novel context where a platform software and an interface standard enabled connectivity among the products that were technologically independent but complementary for users. Compatibility and modularization reduced the benefit of internal coordination, but also lead to an increase in end-users’ heterogenous needs thanks to their ability to mix and match products, which in turn increased the benefit of internal coordination. Following an abductive approach with quantitative and qualitative data in the U.S. medical imaging device industry (1985-2008), I find that imaging equipment firms expanded their product diversity in the post-standard period. The pattern is driven by the firms that also offered a platform software, which became integrators to create customized systems with their knowledge on user preference leading to both product and product interface innovations for diversification. These findings suggest that demand heterogeneity influences firms’ horizontal scope decision within an open ecosystem. Keywords: ecosystem, standard-based platform, product diversification, demand-side perspective