Consider first that platforms are becoming a dominant form of business organization. Then consider how you transition an existing product to a platform. This talk illustrates steps to make the transition. It then describes what an open business model looks like and compares differences in openness of Apple, Google, Microsoft and others.
Platform Revolution - Ch 02 Network Effects: Power of the PlatformGeoff Parker
Contents: (1) Two sided market definitions (2) How demand- and supply-side economies of scale differ (3) Free goods: when and why to subsidize one side or the other (4) How switching and homing costs affect winner take all outcomes.
These slides provide course materials that complement the second chapter of Platform Revolution: How Networked Markets are Transforming the Economy and How to Make Them Work for You. The final slides provide additional reading suggestions for industry and academia.
“Software is eating the world” said Netscape founder Marc Andreessen in his Wall Street Journal 2011 op-ed to describe how digital technology has transformed the world of business. We divide the disruption into two stages; efficient pipelines disrupting inefficient pipelines and platforms disrupting pipelines. Most Internet applications during the 1990s involved the creation of highly efficient pipelines—online systems for distributing goods and services that out-competed incumbent industries. Online pipelines tended to have very low marginal costs of distribution—sometimes as low as zero. This allowed them to target and serve large markets with much smaller investment. We are now in stage two where platforms disrupt pipelines. They bring news sources of supply to market, change value consumption by facilitating new forms of consumer behavior, change quality control through crowd sourced curation, and bring new market middlemen by aggregating fragmented markets.
We present an economic framework to understand and manage platform growth. This builds from a model of network complements and two sided markets. The intuitions help set prices, openness, and features to absorb into the platform. The intuitions also help shape the transition from a traditional business model to a platform strategy.
Presented at the IBM executive education summit July 27, 2011.
Content: (1) How the core interaction defines a platform (2) How a traditional (pipeline) value chain differs from a platform value matrix (3) What's inside and what's outside the platform
These slides provide complimentary course materials for the Ch 3 of Platform Revolution - How Network Markets are Transforming the Economy and How to Make Them Work for You. Final slides provide reading supplements and links to other chapters for industry and academia.
Platform Shift: How New Business Models Are Changing the Shape of IndustryMarshall Van Alstyne
Companies that can transform their traditional business models into network models will have a competitive advantage based on new insights into pricing, network effects, supply chains, and strategy. These principles show how dotcom companies like Airbnb, Amazon, Apple and Uber managed, in a relatively short time, to attract millions of clients worldwide. But they apply also to traditional product companies like Sony, shoe companies like Nike, and spice companies like McCormick. New business models help these companies extend existing transactions to new, associated products and services. Platforms beat products every time. This talk reveals the secret of Internet-driven platforms, why they happen, and what changes they imply.
The new new competition - How digital platforms change competitive strategyPlatform Revolution
Based on the book PLATFORM REVOLUTION.
Learn more at platformrevolution.com
Follow us on @platrevolution and https://www.facebook.com/platformrevolution/
Platform Revolution - Ch 02 Network Effects: Power of the PlatformGeoff Parker
Contents: (1) Two sided market definitions (2) How demand- and supply-side economies of scale differ (3) Free goods: when and why to subsidize one side or the other (4) How switching and homing costs affect winner take all outcomes.
These slides provide course materials that complement the second chapter of Platform Revolution: How Networked Markets are Transforming the Economy and How to Make Them Work for You. The final slides provide additional reading suggestions for industry and academia.
“Software is eating the world” said Netscape founder Marc Andreessen in his Wall Street Journal 2011 op-ed to describe how digital technology has transformed the world of business. We divide the disruption into two stages; efficient pipelines disrupting inefficient pipelines and platforms disrupting pipelines. Most Internet applications during the 1990s involved the creation of highly efficient pipelines—online systems for distributing goods and services that out-competed incumbent industries. Online pipelines tended to have very low marginal costs of distribution—sometimes as low as zero. This allowed them to target and serve large markets with much smaller investment. We are now in stage two where platforms disrupt pipelines. They bring news sources of supply to market, change value consumption by facilitating new forms of consumer behavior, change quality control through crowd sourced curation, and bring new market middlemen by aggregating fragmented markets.
We present an economic framework to understand and manage platform growth. This builds from a model of network complements and two sided markets. The intuitions help set prices, openness, and features to absorb into the platform. The intuitions also help shape the transition from a traditional business model to a platform strategy.
Presented at the IBM executive education summit July 27, 2011.
Content: (1) How the core interaction defines a platform (2) How a traditional (pipeline) value chain differs from a platform value matrix (3) What's inside and what's outside the platform
These slides provide complimentary course materials for the Ch 3 of Platform Revolution - How Network Markets are Transforming the Economy and How to Make Them Work for You. Final slides provide reading supplements and links to other chapters for industry and academia.
Platform Shift: How New Business Models Are Changing the Shape of IndustryMarshall Van Alstyne
Companies that can transform their traditional business models into network models will have a competitive advantage based on new insights into pricing, network effects, supply chains, and strategy. These principles show how dotcom companies like Airbnb, Amazon, Apple and Uber managed, in a relatively short time, to attract millions of clients worldwide. But they apply also to traditional product companies like Sony, shoe companies like Nike, and spice companies like McCormick. New business models help these companies extend existing transactions to new, associated products and services. Platforms beat products every time. This talk reveals the secret of Internet-driven platforms, why they happen, and what changes they imply.
The new new competition - How digital platforms change competitive strategyPlatform Revolution
Based on the book PLATFORM REVOLUTION.
Learn more at platformrevolution.com
Follow us on @platrevolution and https://www.facebook.com/platformrevolution/
Platform Revolution - Ch 01 Intro: How Platforms are Changing CommerceMarshall Van Alstyne
Content: (1) Evidence platforms beat products in value, recognition, speed (2) Platform definition (3) Firm implications
These slides provide complimentary course materials for the Ch 1 of Platform Revolution - How Network Markets are Transforming the Economy and How to Make Them Work for You. Final slides provide reading supplements and links to other chapters for industry and academia.
Why do business platforms beat products every time? This is my keynote at EMERCE eDay. We cover changes in global brands, how feedback effects work, how innovation is different, and examples of coming platforms.
The Platform Manifesto - 16 principles for digital transformationSangeet Paul Choudary
The Platform Manifesto is a collection of principles that succinctly defines how different aspects of business transform in a world of digital platforms.
Platforms: How Change in Industry is Driving Change in StrategyMarshall Van Alstyne
Presentation at MIT Platform Summit on how economic change in the Internet era parallels change in the Industrial era, but for the opposite reason. This inverts marketing, operations, finance, IT, strategy and innovation.
Essentials of a platform business modelValueCoders
A platform business model connects buyers and suppliers who can then transact with ease. This model is being seen as the latest trend in businesses of today.
Multi-sided platforms are the superior way of doing business today. This content will help you define a marketplace business with the network effect. All network orchestrators must perform well at least 4 functions listed in this presentation.
Pathways for platforms to disrupt traditional industries. Lecture slides from MIT Platform Summit, July 26, 2013. Video available at https://www.youtube.com/watch?v=F-EJrG3J4GQ.
Learn how to deconstruct what it means to be "Open," as well as how to engage developers, leverage users, and shape your data to make your platform ready for commercial use.
Presented April 14th, 2009, at BayCHI: http://www.baychi.org/calendar/20090414/
STATE OF THE PLATFORM REVOLUTION 2021 - by Sangeet Paul ChoudarySangeet Paul Choudary
This 90-page report lays out the key themes in the platform economy for the year 2020-21. Themes span platform regulation, inequality in the gig economy, platform strategy for incumbents, bigtech movements into new industries etc.
How did Airbnb beat Craigslist? What's special about the Medium blogging platform? How did LinkedIn eat Monster for lunch? How do Youtube and Vimeo coexist? Why was Mint.com so successful? Using the Platform Stack framework, this deck explains 10 startup business puzzles and creates a framework to solve many more.
In a time when consumers have been confined to their homes and social contact has been limited, influence has been pulling to the forefront of our increasingly virtual reality. But now that we are beginning the slow transition out of lockdown, how should brands be preparing to future-proof their influence for a post-COVID-19 world?
Design Strategies to galvanize EcosystemsSimone Cicero
Crafting a power "Shaping Strategy" and galvanize an entire ecosystem to join a platform for collaborative value creation is the new strategy to transform markets in the XXIst century.
Networked business models are transforming markets, communities and production through network effects.
Presentation given in Aalborg University for the BizMedia2016 Event
Business Platform MasterClass to Business and Engineering school students. After the course, the students acquire skills in:
▸ Business shift, Platforms rule the Bu$ine$$
▸ WTF is a Platform?
▸ How to design a platform?
▸ Creating and capturing value in Platforms
▸ Competition in a platform led economy
▸ Case study (Airbnb)
Beyond Uber: How the Platform Business Model Connects the WorldApplicoInc
What do Airbnb, Alibaba, and Uber all have in common (besides multibillion-dollar valuations)? None of these companies directly create the value that their users consume. They all operate with a different business model: the platform. This talk explains the platform business model and how it works. It also looks at why this phenomenon is much bigger than consumer ecommerce and is starting to disrupt more traditional enterprise markets, including everything from enterprise software and CRM systems to healthcare and finance.
These slides discuss Network Effects, Platforms, Standards, and Complex Systems. All of these concepts continue to become more important as the digital economy progresses. From Uber to Instacart, and from smart phones to driverless vehicles, these concepts are playing an increasingly important role in the global economy. Their impact is most obvious when one thinks of the winner take all markets that are becoming increasingly common.
Advertising via print media, especially mail, has been falling. This talk describes a new kind of interactive stamp that rewards people for sharing their preferences. It bridges any kind of printed medium and mobile, and enables one click purchases. The result could help print ads compete with search ads, social ads, and mobile ads.
Using two years of data from a Japanese bank, we present statistical evidence that knowledge management works. (1) Workers who consumed more documents shared via a Q&A platform exhibited roughly a 10% productivity gain. (2) These gains accrue disproportionately to less skilled workers. (3) Workers who answered more questions were promoted at a faster rate.
Presented at NBER Economics of IT Workshop July 22 - 23, 2011.
Platform Revolution - Ch 01 Intro: How Platforms are Changing CommerceMarshall Van Alstyne
Content: (1) Evidence platforms beat products in value, recognition, speed (2) Platform definition (3) Firm implications
These slides provide complimentary course materials for the Ch 1 of Platform Revolution - How Network Markets are Transforming the Economy and How to Make Them Work for You. Final slides provide reading supplements and links to other chapters for industry and academia.
Why do business platforms beat products every time? This is my keynote at EMERCE eDay. We cover changes in global brands, how feedback effects work, how innovation is different, and examples of coming platforms.
The Platform Manifesto - 16 principles for digital transformationSangeet Paul Choudary
The Platform Manifesto is a collection of principles that succinctly defines how different aspects of business transform in a world of digital platforms.
Platforms: How Change in Industry is Driving Change in StrategyMarshall Van Alstyne
Presentation at MIT Platform Summit on how economic change in the Internet era parallels change in the Industrial era, but for the opposite reason. This inverts marketing, operations, finance, IT, strategy and innovation.
Essentials of a platform business modelValueCoders
A platform business model connects buyers and suppliers who can then transact with ease. This model is being seen as the latest trend in businesses of today.
Multi-sided platforms are the superior way of doing business today. This content will help you define a marketplace business with the network effect. All network orchestrators must perform well at least 4 functions listed in this presentation.
Pathways for platforms to disrupt traditional industries. Lecture slides from MIT Platform Summit, July 26, 2013. Video available at https://www.youtube.com/watch?v=F-EJrG3J4GQ.
Learn how to deconstruct what it means to be "Open," as well as how to engage developers, leverage users, and shape your data to make your platform ready for commercial use.
Presented April 14th, 2009, at BayCHI: http://www.baychi.org/calendar/20090414/
STATE OF THE PLATFORM REVOLUTION 2021 - by Sangeet Paul ChoudarySangeet Paul Choudary
This 90-page report lays out the key themes in the platform economy for the year 2020-21. Themes span platform regulation, inequality in the gig economy, platform strategy for incumbents, bigtech movements into new industries etc.
How did Airbnb beat Craigslist? What's special about the Medium blogging platform? How did LinkedIn eat Monster for lunch? How do Youtube and Vimeo coexist? Why was Mint.com so successful? Using the Platform Stack framework, this deck explains 10 startup business puzzles and creates a framework to solve many more.
In a time when consumers have been confined to their homes and social contact has been limited, influence has been pulling to the forefront of our increasingly virtual reality. But now that we are beginning the slow transition out of lockdown, how should brands be preparing to future-proof their influence for a post-COVID-19 world?
Design Strategies to galvanize EcosystemsSimone Cicero
Crafting a power "Shaping Strategy" and galvanize an entire ecosystem to join a platform for collaborative value creation is the new strategy to transform markets in the XXIst century.
Networked business models are transforming markets, communities and production through network effects.
Presentation given in Aalborg University for the BizMedia2016 Event
Business Platform MasterClass to Business and Engineering school students. After the course, the students acquire skills in:
▸ Business shift, Platforms rule the Bu$ine$$
▸ WTF is a Platform?
▸ How to design a platform?
▸ Creating and capturing value in Platforms
▸ Competition in a platform led economy
▸ Case study (Airbnb)
Beyond Uber: How the Platform Business Model Connects the WorldApplicoInc
What do Airbnb, Alibaba, and Uber all have in common (besides multibillion-dollar valuations)? None of these companies directly create the value that their users consume. They all operate with a different business model: the platform. This talk explains the platform business model and how it works. It also looks at why this phenomenon is much bigger than consumer ecommerce and is starting to disrupt more traditional enterprise markets, including everything from enterprise software and CRM systems to healthcare and finance.
These slides discuss Network Effects, Platforms, Standards, and Complex Systems. All of these concepts continue to become more important as the digital economy progresses. From Uber to Instacart, and from smart phones to driverless vehicles, these concepts are playing an increasingly important role in the global economy. Their impact is most obvious when one thinks of the winner take all markets that are becoming increasingly common.
Advertising via print media, especially mail, has been falling. This talk describes a new kind of interactive stamp that rewards people for sharing their preferences. It bridges any kind of printed medium and mobile, and enables one click purchases. The result could help print ads compete with search ads, social ads, and mobile ads.
Using two years of data from a Japanese bank, we present statistical evidence that knowledge management works. (1) Workers who consumed more documents shared via a Q&A platform exhibited roughly a 10% productivity gain. (2) These gains accrue disproportionately to less skilled workers. (3) Workers who answered more questions were promoted at a faster rate.
Presented at NBER Economics of IT Workshop July 22 - 23, 2011.
The symbiotic relationship between smart cities and smart grids. The integration of city infrastructure with electric utilities infrastructure is indeed a natural way of building a system of systems to deliver a secure resilient grid through the emergence of integrated utility micro-grids.
A narrative about how the grid will transform itself starting with the convergence of advanced intelligent machines, broadband communications, edge computing, cloud analytics all connected as a secure distributed network.
This kickoff intrtoduces the concept of the Agile Fractal grid to more than 100 companies that particpated in the full day workshop lead by Chuck Speicher and John Reynolds and Craig Miller the Chief scientist of the NRECA
The Developer Megatrends report series distills the major data points and insights from our research into the most important trends in the developer economy. In this 7th edition Megatrends report, we cover app business models and examine how developers can escape the poverty trap. We look at how consumer technology will invade the enterprise, and how data will be at the center of the most interesting apps in the coming years. We’ll also revisit experience roaming – a trend from 2010 that is now in full swing.
One thing is clear. Developers are a driving force in every industry and a critical source of competitive advantage. Every company should master developer ecosystem skills. Developer Megatrends H1 2015 will shed light on the state of the art in the developer economy.
This presentation from Gary Gereffi, Director of the Duke University Center on Globalization, Governance & Competitiveness, covers four main areas:
1. The New Global Economy
2. What is a Global Value Chain (GVC)?
3. GVC Competition: China vs. Mexico
4. GVCs and Emerging Economies: New Sources of Global Competition
Unleashing Innovation Across The Value ChainShabbir Akhtar
Presentation by Shabbir Akhtar made during the selection round to represent Globsyn Business School at AIMA's National Competition for Management Students 2012
Open Source Software Development by TLV PartnersRoy Leiser
Our insights about Open Source software development. Trends, leading brands and practices, success stories, important Exists, Pros and Cons and much more.
During the past few years open source has transformed the tech industry. According to Gartner's survey 85% of companies currently use open source software. In this presentation we will examine what open source is? What are the pros and cons for software developers? How big is the market? How can one make money developing an open source product and which business models companies use? If it doesn’t work – is it possible to witch from and to OS?
This presentation was created in Aug 2013.
Acquia digital entertainment masterclass 26.11.2013Acquia
Combining Content, Community & Commerce
to increase consumer engagement in Entertainment industry.
Presentation from Digital Entertainment Masterclass 26th November 2013
As the world continues to become digital and mobile, the communications ecosystem is being disrupted. Rather than trying to defend an obsolete business model, operators need to change their point of view and consider the broader possibilities being created by this very transformation as it disrupts every other industry.
The characteristics of the new environment are such, that the current "cambrian explosion" of apps will continue with no end in sight - especially as new technologies such as wearables, connected car/home, the internet of things and even implantables appear on the scene.
To support the massive proliferation of apps, a new breed of players is appearing: the Communications-as-a-Service Platform providers (CaaS). They will do to the communications stack what Google Maps did for maps or Paypal for payments: simplify it to the point where any developer is able to integrate it into their application with just a few lines of code.
In this new world, operators need to partner with CaaS providers to fully participate in the tremendous value creation opportunity, leveraging the strength of the startup world with their own, to unleash the hidden potential in their own capabilities and infrastructure.
Print Money Like Mark Zuckerberg: Understanding Platform EconomicsAndreas Goeldi
Everybody wants to build a platform – the term has become inflationary in startup and innovation circles. That’s understandable because successful platforms are amongst the most profitable and most rapidly growing businesses in the world.
However, building a successful platform is exceedingly risky and difficult. A thorough understanding of platform economics is key (that’s one of the things Mark Zuckerberg excels at, BTW).
This presentation provides an introduction to platform economics and covers major topics such as network effects, winner-takes-all effects, growth mechanisms and strategies for complementors
Social Media, Cloud Computing and architectureRick Mans
Slides for a guest lecture on the impact of social media and cloud computing on system architecture. Key is the crown model which enables you to personalize your offerings while still using the 'comply' layer with enterprise applications.
Top10 Trends Impacting Marketing, Sales and Service The Circuit
Doss Ross offered The Circuit audience a review of the top 10 tech trends that could impact your business -- and some ideas to turn your competition into an encyclopedia salesman.
Doug Ross is Vice President and Chief Technology Officer at Western & Southern Financial Group, a Fortune 500 diversified financial services organization.
The Circuit is the IT Association in the SW Ohio Region since 1994 www.thecircuit.net
ER(Entity Relationship) Diagram for online shopping - TAEHimani415946
https://bit.ly/3KACoyV
The ER diagram for the project is the foundation for the building of the database of the project. The properties, datatypes, and attributes are defined by the ER diagram.
This 7-second Brain Wave Ritual Attracts Money To You.!nirahealhty
Discover the power of a simple 7-second brain wave ritual that can attract wealth and abundance into your life. By tapping into specific brain frequencies, this technique helps you manifest financial success effortlessly. Ready to transform your financial future? Try this powerful ritual and start attracting money today!
Multi-cluster Kubernetes Networking- Patterns, Projects and GuidelinesSanjeev Rampal
Talk presented at Kubernetes Community Day, New York, May 2024.
Technical summary of Multi-Cluster Kubernetes Networking architectures with focus on 4 key topics.
1) Key patterns for Multi-cluster architectures
2) Architectural comparison of several OSS/ CNCF projects to address these patterns
3) Evolution trends for the APIs of these projects
4) Some design recommendations & guidelines for adopting/ deploying these solutions.
1.Wireless Communication System_Wireless communication is a broad term that i...JeyaPerumal1
Wireless communication involves the transmission of information over a distance without the help of wires, cables or any other forms of electrical conductors.
Wireless communication is a broad term that incorporates all procedures and forms of connecting and communicating between two or more devices using a wireless signal through wireless communication technologies and devices.
Features of Wireless Communication
The evolution of wireless technology has brought many advancements with its effective features.
The transmitted distance can be anywhere between a few meters (for example, a television's remote control) and thousands of kilometers (for example, radio communication).
Wireless communication can be used for cellular telephony, wireless access to the internet, wireless home networking, and so on.
1. Product to Platform & Open
Business Models
Geoffrey Parker Marshall Van Alstyne
Tulane University & MIT Boston University & MIT
gparker@tulane.edu marshall@mit.edu, InfoEcon@twitter.com
18. Platform Ecosystem Rules
18
• Platforms beat products every time.
• Remake the supply chain to “consummate the match.”
• Open the top or the bottom of your platform to
unexpected innovation, but don’t open both.
• Look to your overlapping users to see where tough
competitors will attack
19. To be a platform
System must provide a useful and
embeddable function or service
and provide 3rd party access.
Examples:
iTunes: get music onto iPod
SAP: execute ERP systems
Facebook: connect family,
friends & acquaintances
Smart Grids: capture AC/DC
sources, route power
Nike Fuel: motion capture and
social benchmarking
Pearson: match people to
content, deliver content, certify
learning
Products have features
Platforms have communities
20. How do traditional linear business
models transition to platforms given
network effects?
21. 21
Traditional Supply Chain
Supply
$ $
Assemble
$
(1) Value accumulates from stage to stage
(2) Standard linear value chain
(3) Logistics optimize stuff (usu. not incentives)
(4) No network effects
Manufacture Retail
23. 23
Potential B2C Platform
BizBiz Cust
Potential B2C Platform
Biz
Biz Cust
1. Make your business a platform by facilitating transactions across your systems.
24. 24
Creating a B2C Platform
Biz Cust
Biz
Biz
1. Make your business a platform by facilitating transactions across your systems.
2. Expand the biz partners who can reach your customers.
3. Expand the customers who can reach your suppliers.
Biz CustCust
25. 25
This is a really, really different
business model due to network
effects…
26. How are these related?
eBay Sellers
Airlines/Hotels
Xbox Developers
Visa Merchants
Doctors
YouTube Videographers
AirBnb Rooms
Electric Car Charge Stations
Mechanical Turk Laborers
Monster Employers
Android Developers
eBay Buyers
Travelers
Xbox Gamers
Visa CardHolders
Patients
YouTube Viewers
AirBnb Renters
Electric Car Drivers
Mechanical Turk Jobs
Monster Employees
Android Users
Each Side Attracts More of the Other
32. 32
If your supply chain has network effects then…
$
Biz
$
Biz Cust
… you can price wrong
… manage the supply chain wrong
… get internal organization wrong, and
… mismeasure LTV of “free customers”
whenever you use linear product model practices.
34. 34
Apple iPod pre-Platform
Apple iPod
$ $
Retailer
Music
Producer
Listener
$
(1) Product First Thinking
(2) Standard linear value chain
(3) User bought music retail (or P2P)
(4) Minimal network effects
36. 36
Apple iPod post-Platform
Apple
User Content
(1) Remove supply chain inefficiency
(2) Triangular platform supply network
(3) Apple owns financial chokepoint
(4) Apple helps users find content
(5) Stronger network effects
$$
37. How Apple is killing standalone platforms
Lumia
Usr Dvpr
PSP
Usr Gam
MP3
User Music
Video
TV
Games
Dvpr
Web
HTML
eBooks
Publi
Calls
User
Zune
Usr Mus
MicrosoftSonyNokia
Apple has vastly stronger network effects.
Sony could have done this – has many great standalone products.Google is not making this mistake with Android
Message for you: A great standalone product might not be sufficient.
2007 Today 2007 Today
38. How Apple is killing standalone platforms
MP3
User Music
Video
TV
Games
Dvpr
Web
HTML
eBooks
Publi
Calls
User
Message for you: A great standalone product might not be sufficient.
Polycom
Speakerphone
R1P1 U1 R1P1 U1
Cisco
Flip Camera
R1P1 U1
HP
Calculator
Photo
Usr Upld
Flickr
Blkbry
Usr Dvpr
RIM
eRdr
Usr Upld
Sony
39. Why Apple isn’t killing Kindle
We asked ourselves: “Is
there some way we can
bring all of these things
together [web service,
Prime, Kindle, instant video
and the app store] into a
remarkable offering
customers would love?”
Yes, the answer is Amazon
Kindle Fire.
November 14, 2011: Amazon introduces the Kindle Fire
40. Kindle Fire Offering
• 18 million movies, TV shows, songs,
magazines
• Amazon Appstore - thousands of apps
and games
• Cloud-accelerated web browsing -
Amazon Silk
• Free cloud storage for Amazon content
• Color touchscreen with extra-wide
viewing angle
• Priced at $199 for 7-inch Wi-Fi Version
• Fast, powerful dual-core processor
• Amazon Prime members get unlimited,
instant streaming of 10,000 popular
movies and TV shows
44. 44
− Open to “.com”
Open gift store −
Open to developers −
The Rise & Ignominius Fall of MySpace – Business Week 2011
Does Openness Work?
While Facebook focused on creating a
robust platform that allowed outside
developers to build new applications,
Myspace did everything itself. ``We tried to
create every feature in the world and said,
`O.K., we can do it, why should we let a third
party do it?' '' says (MySpace cofounder)
DeWolfe. ``We should have picked 5 to 10
key features that we totally focused on and
let other people innovate on everything
else.''
46. Platforms get enormous value from
3rd party developers
Most firms can only
concentrate on most
valuable apps
Profits increase when
others add to platform’s
“Long Tail”
Consider an operating system like MS Windows, Apple Mac, or Google Android
You don’t need to
own this
47. 47
What does controlling openness mean?
Split IP rights from point
of customer contact.
1) Open Access
2) Extend Platform
3) Touch Customers
4) Change Platform
Platform Provider
Side 1 Side 2
Platform Sponsor
Side 1 Side 2
Platform Provider
Platform Sponsor
Platform
48. Models for Organizing Platforms
D
ell
Users Dvprs
Ac
er
…
H
P
Re
d
Ha
t
De
bi
an
U
bu
nt
u
…
4) Shared: e.g. Linux
Users Dvprs
Sponsor
2) Licensing: e.g. Google
Android
Providers
One Provider Many Providers
3) Joint Venture: e.g. Orbitz
Sponsors
Users
Provider
Dvprs
Users Dvprs
Provider
Sponsor
1) Proprietary: e.g. Mac
One Sponsor
Many Sponsors
49. 49
Apple tried to control too much of the
original Mac
• Remember MacWrite,
MacPaint?
• Charged ~$10,000 for
SDKs.
• Controlled OS & HW
and dominant Apps.
• Vertical integration
choked network effects.
Apple Mac
Users Claris
Mac OS
50. 50
Microsoft opened much more of its
ecosystem
• Microsoft had 6-10X
developers
• Open APIs / Cheap SDKs
• Controlled OS, licensed.
• Strong network effects.
Del
l
Users Dvprs
MS Windows
IBM … HP
51. 51
For real profits, control full layer
D
ell
Users Dvprs
Ac
er
…
H
P
Re
d
Ha
t
De
bi
an
U
bu
nt
u
…
Linux:
No one driving the bus.
Limited scope of
control.
Users Flights
Provider
Joint Venture:
e.g. Orbitz airline
collaboration
Users Dvprs
Sponsor
Licensing:
e.g. Google Android
Sponsors
Providers
52. 52
Danger!
Users Dvprs
Sponsor
Watch for new control
points closer to
customer.
Providers
Microsoft
fear of
Netscape
Facebook
fear of
Instagram
AT&T fear of Apple
Apple
fear of
Google Maps
SAP
fear of
ADP
53. Should Apple have opened
the iPod?
53
No! It does 1 thing only, so make it “insanely great” and own it.
Most firms can only
concentrate on most
valuable apps
Profits increase when
others add to platform’s
“Long Tail”
54. Should Apple have opened
the iPhone?
Most firms can only
concentrate on most
valuable apps
Profits increase when
others add to platform’s
“Long Tail”
Of Course! It has video, wifi, camera (scanner), accelerometer, mobile, MP3,
web browsing, etc. Platforms benefit from broad contributions.
But control the top several complements.
55. Which applications to absorb?
Apps offered by
Platform Sponsor
Apps offered by
Developers
Rule 1: Absorb the highest value applications from the ecosystem. This adds
value for users and mitigates threat of disintermediation.
Example: Apple iPad absorbed e-books
Example: Microsoft Windows absorbed web browsing
Example: Google added Gdrive to absorb functions of DropBox
56. Anything else to absorb?
Apps offered by
Platform Sponsor
Apps offered by
Developers
57. Anything else to absorb?
Rule 2: Absorb features that emerge in multiple places in the ecosystem. This
increases compatibility, ensures efficient implementation, and benefits other apps.
Examples: Operating systems support for (i) spell check (ii) cut & paste (iii) PDF.
59. Why Platforms Beat Products
• Based on owned
resources, innovation
occurs at a given rate.
• Harnessing 3rd party
resources, innovation
can occur at a higher
combined rate.
• Even if a platform
starts behind or has
higher variability, its
value can overtake
the product leader.
Time
ValueAdded
65. Where do threats come from?
65
Porter’s 5 Forces – Compliments of Wikipedia
66. Product
Features
Firms generally consider product feature overlap
(differentiation?) to find and benchmark competition.
Eisenmann, Parker, Van Alstyne, “Platform Envelopment.” Strategic Management Journal, 2011.
Zune / iPod Zune / Sony PSP Zune / iPhone
67. T A T A
Network
Users
Platform
Providers
T A
User overlap between Platforms predicts competitors.
Size (usually but not always) predicts victor.
High Overlap Low Overlap Asymmetric Overlap
Eisenmann, Parker, Van Alstyne, “Platform Envelopment.” Strategic Management Journal, 2011.
68. Platform Ecosystem Rules
68
• Platforms beat products every time.
• Remake the supply chain to “consummate the match.”
• Open the top or the bottom of your platform to
unexpected innovation, but don’t open both.
• Look to your overlapping users to see where tough
competitors will attack