Monday, May 2, 2016

Who Can Most Easily Build a Platform?

All discussion of “platforms” revolves around business strategy, and the ability to create advantage in the ecosystem.

In some cases, platforms have been built on operating systems, devices or applications. Almost never--if ever--have big platforms been built on “functions.” Microsoft, Apple iOS and Android; iPhones and Facebook are examples of the former.

But Amazon is an example of the latter: a platform built on a function, namely a retail transaction function.

You might also argue that Google Play and the Apple App Store function as platforms,  inseparably from a device.

By extension, suppliers have tried to create platforms built on data center tenancy (Telx), proximity and geography.

The degree to which platforms can be created, to some extent, based on an access provider’s customer base, and knowledge of customer location and device choices is an important question for access providers.

The question is a big one because it is not completely clear whether platforms are most successfully build on apps, devices or access. Most would likely argue that platforms have been  most successfully built on apps, devices or a transaction capability.

And that is the problem access providers face. Consider entertainment video, historically dominated either by application (broadcasters) or access providers (cable TV, telcos).

In the Internet era, app, device and transaction providers have been able to establish franchises as well. Netflix, iTunes and Amazon Prime provide examples.

Now Amazon is making a big push to aggregate all subscription video on demand services in the United States, making Amazon Prime a one stop shop.

And that illustrates how difficult it might remain for access providers to compete, as platforms, with apps, devices and transaction providers.

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