Platform ecosystems provide a modern value creation model where external contributors can develop services on top of a technical platform. This accelerates evolution and allows continuous innovation from customers. The key is great ecosystem orchestration through APIs and common rules. Platforms are managed differently than traditional products, focusing on continuous growth through collaboration rather than command and control. New sources of value may emerge for non-business sectors by applying this approach to enable communities and crowdsourcing.

1. Platforms & Ecosystems
(competitive advantage in multi-sided markets)
Petri Takala / Technology Academy Finland (TAF)
Discussions during 2016
Selected bits from following documents ”the Rise of the Platform Enterprise”, Amrit Tiwana ”Platform ecosystems” ja Vitalari & Shaughnessy ”the Elastic Enterprise”
AND
Study paper for Digitalization programme of Finnish government: Ali-Vehmas – Takala – Klemettinen: ”Ekosysteemit, digitalisaatio ja alustatalous” (in Finnish)

2. Purpose of this document
• Introduce platform ecosystem as a modern value creation model
• What they are?
• What makes ecosystem a platform ecosystem?
• Competitive advantage of platform ecosystem vs. traditional market models
• How to operate them?
• To provide a more analytical and practical way for management to
identify strategic development options for business and operational
models in this increasinly popular strategy topic.

3. Platform ecosystems are more customer centric and effective
in service development than traditional service models
• They practically replace traditional operational models in sw
businesses and digitalized markets
• Accelerated evolution – 5 times faster market growth
• Continuous engagement with customers enable service development
• External innovations can be easily imported on top of the platform
• Platform success is a result of great ecosystem orchestration
• New operating models and strategic objectives
• Requires continuous strategy and mgmt system governance (system design)

4. Technical platform,
APIs, UI,
Standardized events / rules
User data & analytics
Platform-ecosystem structure enables contributors to mix services thet
meet the end customer needs better than tradiotional service models
Key change in operating model: from segment specific services offering to ”open” market service space for all customers
Key Drivers for ecosystem markets
1) Service complexity and specialization of organizations
2) Packetization of products, services and business processes
3) Automatization of routines through software
4) Iot capabilities 5) cloud technology
-> platforms become business engines
Segment specific services Multiple direction and combination value creation

5. Platform ecosystems are being managed differently
than traditional product / service organizations
• Continuous growth and development as the main objective
• Architecture and governance must be strongly aligned to enable
coherent steering
tuote palvelu alusta
Innovation Planned / roadmapped Planned / roadmapped emergent
Management system style Command & control Collaboration with customers Orchestration, clear vision
Strategic measures Market share Share of market value Market growth and share of
market value
Critical success factors Management quality Process quality Orchestration, APIs
Key balance to manage Predicting vs. driving customer
needs
Customizations vs.
productization
Independence of service
providers vs. common rules
Initial challenges Getting new customers Acquiring customers Getting customers AND service
providers

6. New sources of value to non-business sectors
by using paltform ecosystem approach
• People have increasingly more diverse interests. Finding common channels to
reach people is almost impossible
• TV-channeles and the use of on-demand services. Death of common audience.
• People expect to have more focused value from their communitites. Geographic
locatio is not limiting to develop common and virtual interest groups
• People want to participate, learn and inluence themselves
• Communities need to scale their services for more individual value propositions
• Communities have a lot of basic admin challenges to overcome
• If many fixed costs and routines could be overcome, lower barrier to entry for new
communities
• Focus on real community value add
• Companies and public organizations are increasingly interested to crowdsource
ideas and solutions from communities

7. Background material from
various sources

8. Platform ecosystems are here..

9. The amount of platform companies is
increasing among the successful companies

10. Profit share of the platform companies is
expected to grow even more…

11. The economies of scale grows exponentially as the size of the platform
ecosystem grows

12. There are many different types of ecosystems

13. However, Europe has some catching to do…

14. Amount of companies grow in the competitive
market (packetization example / marketing tech)

15. The long tail enables new target groups that would
not be possible to serve as separate target group
Different objectives in different
areas of the curve

16. Platform ecosystem key objectives: transaction
volume and customer value

17. Service market operating models
17
Can be
digititized
Service provisioning model Service market model
Service platform
(digital assets, data and
prosesses)
Provide or subcontract
services
Enable service market to
evolve
Cannot execute both in same service area – organizations must choose one
Typical customer Many types of customers

18. MyData will enable the new citizen platform ecosystem–
data operators as new role in the market
18
Service platform
Service providers MyData
Public records and customer records
Data operator