Your Digital Platform Isn’t A Differentiator
by Betsy Burton
There is one basic truth that I have learned over the years about emerging technology: anytime a new technology or technology-based business model emerges, it becomes a shiny object that everyone gets excited about and promotes, until the vast majority of organizations are using these models, and they just become expected.
Over the years, I have seen this phenomenon occur over and over again in the IT industry, from client-server, components, services, cloud, big data, etc. etc. etc. We see the same in other industries: electronics, cars, fast-food, you name it—it is the nature of human evolution.
Now we are seeing the same pattern with digital platforms. Side note: we will see AI become the norm as well. But let’s discuss that later.
In this blog, we explore what platforms are becoming the norm, and which may be really differentiated.
What Is a Digital Platform?
A digital platform—as opposed to a train platform, diving platform, or political platform—is a software (hence we put the word digital in front) product/service that enables entities to add and share content within the environment.
A digital platform typically provides common services that enable shared content to interoperate (APIs, formats and protocols, security, state management, DBMS/information integration, process and component management, visualization, etc. )
The key is that a digital platform provides an environment to enable individuals and businesses to share, serve, and deliver common content. Because this definition is very open, there are many different types of platforms.
Platforms In the Consumer World
In the consumer world, content can be focused on sharing messages, photographs, videos or even events, in the case of a platform like Facebook. Or it could be a marketplace platform focused on supporting the selling of goods and services, such as Craiglist, Uber, Amazon, Alibaba, etc. These platforms shield the user from the programming complexity so they can easily create, share, promote, and sell content.
How open these platforms become, and how much their content should be managed and regulated, is currently a hot business and political debate.
Benefits of Developing Products and Services On a Common Platform
In addition to consumer content sharing platforms (e.g., Facebook etc.), platforms have become a standard development paradigm. Any technology and service provider (TSP) worth its salt should be developing products and services today based on a common platform. It just makes sense.
The benefit to TSPs for using a platform for developing their own products is that it increases the ability to develop enhancements and add-ons that can be dynamically integrated. It also means they can more easily integrate their partners products and services, as well as any additional services that they can plug into their platform.
Their customers benefit because of the higher level of cross product integration, ability to use additional services, and the increased scale as more services are available.
The big questions are:
- Is your favorite TSP developing a common platform primarily with the goal of using it to develop their own products and services?
- Are they primarily developing it to work with partners in a managed business ecosystem?
- Are they developing it as a service with the goal of selling it so that others can use it to develop their own digital business solutions?
Just because your favorite TSP says they have a platform doesn’t mean there is a huge benefit to you.
Most Technology And Service Providers Will Offer a Hybrid Platform Environment
In most cases, vendors will support a complex combination of all the above.
Developing their own product and services based on a common platform will be the norm for TSPs. For most TSPs, promoting their platform will shift from being a “cool feature” to a “nice to have” to a “must have.”
By 2023, “platforms” will be a non-differentiating feature for 90% of vendor products (80% probability).
Most TSPs will develop a platform for their use—and their partners’ use—with the goal of supporting or enhancing their own business ecosystem. They will manage access to the platform in a way that benefits their business model:
- Some will tightly control some parts or all of their platform with the goal of ensuring their application/solution and partners benefit the most.
- Others will open their platform so that it is widely available with the goal of selling additional services.
There will be a class of vendors that create a platform with the specific business model based on creating a “tool” that others (users and TSPs) can use to develop digital business solutions. These vendors are what we would most consider a digital business platform provider and will most likely come from either application/app integration, business process management, development or IoT integration roots (stay tuned for our upcoming research on this topic).
End-users: If a technology service provider says they have a “platform,” make sure you clarify what that means. What type of platform do they have, and how open is it to partners, to other market players, or to your business? There are benefits to all of these, but you need to understand the degree to which it can affect your business.
Technology & Service Partners: I would give you the same advice as above when you hear a partner say they have a platform. What type of commitments are needed to use a partner’s platform? How much of their platform are they opening? Is there a potential you may be integrating into an environment where they retain competitive control?
Platform Providers: If you are developing and promoting a platform, make sure you are defining your platform strategy based on your business model. And, make sure you are clearly educating your sales and marketing people as to your strategy. Platforms are becoming mainstream, and you cannot afford to have your own teams stumble as they are unclear as to your own strategy.