Platforms are Creating Entirely New Business Models

Platform Revolution

"In the world of platforms, the Internet no longer acts merely as a distribution channel (a pipeline). It also acts as a creation infrastructure and a coordination mechanism. Platforms are leveraging this new capability to create entirely new business models. In addition, the physical and the digital are rapidly converging, enabling the Internet to connect and coordinate objects in the real world—for example, through smartphone apps that allow you to control your home appliances at long distance. Simultaneously, organizational boundaries are being redefined as platform companies leverage external ecosystems to create value in new ways."

Platform Revolution, p.64

“What we mean with a platform business is a business model (not a technology infrastructure) that focuses on helping to facilitate interactions across a large number of participants.”

– “Platform Business Model Explained,” Deloitte

“These innovative forms of intermediation should have strong long-run impacts on the market structures, organization and performance of the economy. Therefore, it is vital to understand how the providers of these services can cover their costs (direct sales, subscription fee, advertisements, etc.), what are their incentives to provide alternative intermediation services (that is, are these alternative models characterized by contrasted levels of pay-off?), how these models compete with each other, what is the value added by these intermediaries, etc.”

– “The Economics of Digital Business Models: A Framework for Analyzing the Economics of Platforms,” Brusseau and Penard