How to make the most of the platform revolution
Ten years ago, Microsoft was the only one of the ten largest global enterprises (in terms of stock market capital) that could be defined as a platform – a digital framework that enables collaborators to connect with customers, partners, suppliers and objects to share data. Today, there are six organizations that can claim that title, including a "traditional" industrial company, General Electric (GE). This growth, and the presence of GE in the rankings, demonstrates that the economy for platforms has become much stronger in recent years.
On a platform, everyone can be a producer or a consumer of data or services. A platform can be internal to an organization and considered to be private, extended to select suppliers, customers and partners, or public, unifying an entire ecosystem around it. By 2020, it is estimated that all large enterprises will have built an internal platform, a quarter of which will be private platforms and 10% of which will be public platforms.
The broader the platform, membership and data collection, the more powerful and dense the algorithms will be and the greater the lead an organization will have on its competitors. Today, platforms – which can be paid for by subscription, per transaction or according to the induced turnover (value-based pricing whereby the platform provider receives a percentage of the additional revenue generated as a result of the platform) – are engaged in a race to reach a critical mass from which only a handful of leaders will emerge.
Making platforms a success in business
Multidisciplinary teams, trust and technology will be key to success here. Platforms are now able to cross-reference data from multiple sources to consider questions from new angles. Precision farming, for instance, requires meteorological data to be analyzed against satellite observations of vegetation cover captured on the ground or obtained from research. A platform therefore brings together players from different backgrounds and domains; from large companies, SMEs and start-ups, to research organizations.
The second essential factor for success in platforms is trust. Sharing data with strangers or, on the contrary, with familiar competitors, requires a very strict framework to guarantee the security, confidentiality and neutrality of the platform. The transparency of the algorithms, the clarity of rules of use, the anonymization of the encrypted data and blockchain technology are all potential solutions. In order to avoid conflicts of interest, joint ventures can be created with specialist bodies or competitors, such as HERE, acquired by Audi, Daimler and BMW. There is however, also room for new entrants, essentially neutral and open players, such as Atos Codex SparkInData, dedicated to collating multiple data sources originating from observations of the Earth.
The third and final determining factor is technology. Factors such as the performance, openness, scalability, ease of integration and use of the platform will depend on infrastructure choices. In this context, some of the technological pillars of next-generation platforms that are making waves are the Big Data Spark framework, containerisation and microservices, high-performance computing (HPC) and the Internet of things (IoT).
Strategic planning, operational readiness
Of course, not all companies will need to develop a public platform. However, all of them will, sooner or later, be called upon to connect to one, so they need to be prepared. By redefining the terms of collaboration, valuing information rather than purpose, and by establishing new links that exclude low value-added intermediaries, platforms will redefine value chains. Organizations must therefore evaluate the opportunities and threats to them and then examine their role within the platform. For instance, assessing if they are the leader, partner, consumer or service provider, and the benefits envisaged and their capacity to act.
This must be underpinned by a cultural transformation as the advent of platforms affects not only the positioning of the organization but also its economic model. It also impacts the individuals’ relationship with data, on their clients, their competitors, and on others working in the field. This new way of doing business is becoming a new way of being for employees, and this is perhaps where the most profound revolution is taking place.