This document provides a summary of the evolution of business platforms as some academics refers to 'from pipes to platforms'. Moreover, there is plenty of information about the economics of digital platforms and what determines the failure and the success of one.
Digital platforms are defined as the foundation on which other software is build.
Windows, Linux or Macintosh are digital platforms that allow others to use their
application program interface (API, allows to read a code, to recognize
face(apple)other hardware components) to build software on them, but the software
is not compatible with all of the platforms. It must be created an approach for each of
them
Leading platforms for smartphone and tablets – IOS and Android.
Apple designed its iOS to help other developers create software – Uber used the
facilities offered to create an app that displays your current location using GPS but
also the location of nearby drivers. Having this information Uber can later connect
you with a driver in real-time and display the price of the ride instantly.
There are also rules and regulations set by the creator of the platform that affect the
developers of new software. Apple charge 30% of all the payments made on
software available on the AppStore. (Conflict with Fortnite, Basecamp and Spotify)
What has changed?
• IT profoundly reduced the need to own physical infrastructure and assets
• IT makes building and scaling up platforms vastly simpler and cheaper
• Allows nearly frictionless participation that strengthens network effects
• Enhances the ability to capture, analyze, and exchange huge amounts
of data that increase the platform’s value to all.
From Pipes to Platforms
Traditional Value Chain Business Models
Production -> Distribution -> Marketing -> Consumer -> Platform
It is a liner process of the value creation, you have to wait for value after you finished
a product
Platform-Driven Business Model
Platform -> Ecosystem (Developers, Publishers, Content Owners) -> Platform ->Eco
The Value creation is a two-way continuous process.
, Key players for platforms
- The owners of the platforms control their intellectual property and governance.
- Providers serve as the platforms interface with users.
- Producers create their offerings.
- Consumers use those offerings
In conclusion from moving form pipeline to platform:
1. From resource control to resource orchestration
2. From internal optimization to external interaction
3. From a focus on customer value to a focus on ecosystem value
4. In a pipeline world, those include tangible assets such as mines and real
estate and intangible assets like intellectual property. With platforms, the
assets that are hard to copy are the community and the resources its
members own and contribute, be they rooms or cars or ideas and information.
In other words, the network of producers and consumers is the chief
asset.
Successful Business Platforms Strategy
1. Connection: how easily others can plug into the platform to share and transact
2. Gravity: how well the platform attracts participants, both producers and
consumers
3. Flow: how well the platform fosters the exchange and co-creation of value
Boncheck and Choudary (2013)
Consequences of Platforms – Gig Economy
• “The term “gig economy” is used to refer to a wide range of di fferent types
and models of work. A common feature of many of these is a reliance on
intermediary digital platforms or apps to connect self-employed workers with
work. Gig economy companies often operate in industries that have
historically relied on self-employed workforces. New technology, however,
enables them to operate on a scale which has substantial implications for the
nature of work, the sectors in which they operate and the welfare state.”
(Work and Pensions Committee Report 2017)
Gig economy workers
• High degree of autonomy
• Payment by task, assignment, or sales
• Short-term relationship between worker and client
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