Impact of Industry Platforms in a World of Cloud, Mobility, Social and Analytics
KerrieH 110000JQ5R Comment (1) Visits (5714)
There is undeniably a new era of computing whether we call it the 4th era of IT, or take a shorthand and describe it as the era of cloud. Clearly the emergence of cloud as an IT consumption and delivery model; the plethora and dominant use of social platforms forging communities creating higher fidelity of data; the implicit use of computers while creating new users behavior via mobility; and the growth of contextual computing using analytic tools and algorithms has spawned a new era. The convergence of these 4 driving technologies: cloud, social platforms, mobility and analytics with industry is where value and disruption is most visible.
This era is different than the gold rush of the Internet where we witnessed an explosion of startups, emergence of new business models and saw the birth of notable new technology companies like Amazon and Google. Some readers may take exception to the description of these two companies as technology companies and rightly so, they are a lot more. But most importantly they increasingly show the blurring between being a software or technology company and a retailer, a book store or an advertising company. Amazon and Google exhibit many qualities and one is the dismantling of industry boundaries, another facet of this new era.
The convergence of cloud, analytics, mobility and social with industry is where value resides and is created. These technology drivers are NOT the next era but they are four key technologies or stated differently, they are table stakes, must-haves. Organizations must pivot their people, processes and technologies to master the benefits of these technologies.
Companies seeking to take advantage recognize they must be able to pivot faster than before. In order to grow they must do 3 things:
1. Increase customer acqusiition
2. Improve brand loyalty
3. Reduce customer churn
Failure to do these 3 things for many companies will start a slow and in some, rapid case of decay. The decay will start as they secede their growth to startups and companies born during the days of Internet and cloud computing. A new enterprise emerges out of this technological change (more on the new enterprise in a future blog) which imagines new types of applications taking advantage of the technology drivers, Internet of Things, machine to machine communications, ambient computing, artificial intelligence, ubiquitous and contextual computing. I know thats a mouth full but more on imagining new applications in a future blog.
In a book I am working on,
The role technology plays in business and society corresponds to a major shift in the usage of software and devices creating a “new normal” for business. During this “new normal” many companies will slowly decay while others will prosper. Decaying companies will continue to do what they did before with incremental changes; prosperous companies will build industry platforms, ecosystems and leverage APIs
Hence the main thrust of this blog entry, Industry Platforms. Marshall Van Alstyne, see
So we have to ask ourselves which comes first the chicken or the egg? The platform or the ecosystem? The answer is obvious they must both occur, they must both exist, they must happen at the same time. Developing the ecosystem without the platform play means you don't get the force multiplier effect, you don't get API stickiness, you don't create defensive moats and ultimately you don't make a dent in the three levers of customer acquisition, brand loyalty and customer churn.
Remember just because you call something a platform doesn't make it a platform. Platforms unlock new value from spare resources and user generated (ecosystem generated) content. Platforms open themselves to third party contributions. Mark Andresson, Venture Capitalist and Netscape Founder has a good definition of a platform: "A platform is a system that can be adapted to countless needs and niches that the platform's original developers could not have possibly contemplated."
Nicholas Vitalari and Haydn Shaughnessy in, The Elastic Enterprise: The New Manifesto for Business Revolution state that Internet and Cloud era companies grow in both good and poor economic climates because of their business driven platforms and supporting ecosystem. Industry platforms are on the rise by traditional brick and mortar companies.
When companies think about becoming digital (more on this in a future blog) they ought to also plan their platform strategy (more on this in a future blog as well).