The Era of Platform economy
The Era Of Platform Economy
The world is headed towards a major Digital Transformation, in which “A convergence of digital forces has created a massive disruption in the market and is pushing businesses to move at much faster speeds to serve the evolving needs of the consumers,” which in simple words mean, the customers want things Better, Cheaper and Faster.
- Platform economy is the tendency for commerce to increasingly move towards and favor digital platform business models
- Platforms are underlying computer systems to design, develop, host services and allow consumers, entrepreneurs, businesses and the general public to connect, share resources or sell products. You can also define it as a competitive nature of digital innovation
- It also applies to how the HW products are designed. They need to scalable, upwards and downwards SW compatible, including security and all the way to the cloud. There is no better example of this than Apple products
There are three types of platforms:
- Transaction Platforms: Also known as digital matchmakers, these are platforms that serve as a type of virtual marketplace or meeting place for various groups of people or customers. Examples of transaction platform companies include Amazon, Etsy, Alibaba, Tencent and Facebook.
- Innovation Platforms: These provide technology frameworks to customers that can be adapted to individual use. Examples of innovation platform companies include Microsoft, Oracle and Salesforce.
- Integration Platforms: This is a combination of the transaction and innovation platform, similar to online application marketplaces like the Apple App Store or Google Play.
Clearly, the Technology is eating every industry. Adoption of the optimum mix of platforms has resulted by of some of these industries to turn the tables on the past industry leaders in less than a decade. An example, some of the visible leaders in Market cap over a decade ago were Exxon, GE, Microsoft, Citi, and AT&T. Today it is Apple, Microsoft, Amazon, Alphabet and many new emerging players. Apple and Amazon are the ultimate examples of Perfect Platforms, which are obvious from their market cap, the business growth and the profitability, they are experiencing.
Naresh Batra
CEO, sfivei
n.batra@sfivei.com
