Download - Platform Economy - Tech Vision 2016 Trend 3
Trend 3: Platform Economy
People First: The Primacy of People in the Digital Age
The Accenture Technology Vision 2016 identifies five technology trends fueled by the people first principle and that are essential to business success in the digital economy.
Intelligent Automation
Liquid Workforce
Platform Economy
Predictable Disruption
Digital Trust
People First: The Primacy of People in the Digital Age
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New technology platforms are driving business innovation, everywhere
4
Driving a geographic dispersion of technology innovation hubs
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Building these types of new platforms requires starting from the ground up
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This includes:Technical Architecture
Governance
Security
How?Create open standards and APIs to be sharable and attractive to ecosystem partners.
Use a cloud foundation, technically designed to scale with the network effects of the ecosystem.
Back office systems will need to support real-time business models
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SAP HANA real-time health analytics and predictive medicine
As these ecosystems develop more connections to mobile and IoT devices, platforms need to support real-time business models and data architectures
Real-time is the basis for connected intelligent machines, vehicles, and mission-critical facilities
Key enabler = in memory computing & databases
Real-time use cases abound in consumer smartphone appsSocial/Facebook: share experiences instantly
Transportation/Uber: watch your taxi navigating toward you
Connected Car: infotainment and on-demand services
Chat apps: instant group communications with no latency
Smart home: the lights turn when you walk in the house
TV remote: change the channel from your smartphone
And are driving the next generation of mission critical systemsHealthcare: continuous patient monitoring hospital to home
Industrial: real-time management of $ billions of critical assets
Logistics: real-time tracking of every that moves
Energy: smart grid electricity usage, optimization, and security
Connected Car: emergency services alerted instantly upon collision
Transportation: driverless vehicles of all kinds
Real-time use cases abound in the consumer experience and are rapidly expanding into all business sectors
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These new platforms also = adoption of New IT
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Multi-speed change engine
Managing platforms and ecosystems of digital partners and developers communities will drive your New IT into high gear
New IT extends into platform ecosystem governance to support your ecosystem
Digital business partners
Developer communities
Cloud partners
Security partners
Architected / designed for continuous changeAgile (Release/Change Management):
DevOps (Process, People & Tools)
Testing (Rapid, Ecosystem-based)
By 2018, over 60% of new apps will use cloud-enabled continuous delivery and cloud-native application architectures to enable faster innovation and business agility.IDC FutureScape: Worldwide Cloud 2016 Predictions, IDC, Doc #259840, November 4, 2015
Once in place, enterprises will use these platforms as new types of business models
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“Products have features. Platforms have communities”
Marshall Van AlstyneMIT Initiative of the Digital Economy
Co-author, Platform Revolution, (to be released March 2016)
Connected Collaborative Scalable
Platform business models are:
… business strategies based on creating value externally with communities of users, partners, and developers
Using platforms isthe business model
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Tech Companies and Born- Digital Organizations
AlibabaAlphabetAmazon.comAppleBaidueBayFacebookJD.comLinkedInNetflixPriceline.comSalesforceTencentTwitterYahoo!Internet
Companies
$16,752
+15,187.1%
PlatformCompanies
$2,560,902Internet CompaniesAppleAxel SpringerCopartFox CommunicationsIAC/InterActive Corp.iLiveiStart InternetLive MicrosystemsNetcom OnlineNetscapePSINetRentPathStorage Computer Corp.Wave CorporationWeb.com
Tech companies & born digital organizations are dominating the digital economy with platform business models.
Private venture-backed startups are also driving record-high valuations:
More than 140 ‘unicorns’ (private companies with valuations of $1 billions or more) have a total market cap of over $500 billion (“The Unicorn List,” CB Insights, 2015)
70% of ‘unicorn’ startups are platform companies(Center for Global Enterprise, 2015)
Is anyone successfully doing this?Market Cap Valuations –
Internet vs. Platform CompaniesMarket Cap of Top 15 Public Platform Companies: $2.6 trillion
Market Cap of Private ‘Unicorn’ Companies: $500 billion
TOTAL: $3+ trillion
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1995 2015
$MM
As a leader in the digital revolution for healthcare, Philips is launching Philips HealthSuite platform with 3 tech partners:
Salesforce.com
Amazon IoT
Alibaba Cloud.
With a platform business model Philips is driving new growth paths that complement its core business in medical equipment.
The platform business model lives alongside the traditional product business
Companies are using their platforms to lead in the digital revolution
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This is a big picture change
Traditional Value-Chain Business Models
Value creation is two-way and continuous
Value creation is linear and one-way
Platform-Driven Business Models
DevelopersPublishersContent ownersRetailServices
Platform Ecosystem
Production Distribution Marketing Consumer
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Having a platform strategy and the business know-how to exploit it is more important than “owning” an ecosystem.
By 2018, IDC predicts that more than 50% of large enterprises – and more than 80% of enterprises with advanced digital transformation strategies – will create and/or partner with industry platforms.1
IDC predicts that the number of industry clouds will reach 500 or more by 2018, up from today's 100-plus.2
Digital leaders from non-tech sectors are now also building platforms
1 “IDC Predicts the Emergence of "the DX Economy" in a Critical Period of Widespread Digital Transformation and Massive Scale Up of 3rd Platform Technologies in Every Industry,” IDC, November 4, 20152 “Industry Cloud: The Largest Vertical Growth Opportunity for Technology Vendors and Services Firms Through 2025,” IDC, November 19, 2015
Schneider
GE
Bosch
ABB
Disney
SONY
Ford
GM
TomTom
Pfizer
Novartis
Merck
Carepass
Cigna
edX
Walmart
American Express
Nasdaq OMX
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Industry Platforms:
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Platform Economy: 100-Day Plan
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1. Appoint a C-level champion to lead a cross-functional team of technologists, business experts, and economists.
2. Identify and prioritize parts of the business that are prime for platform business models.
3. Identify the parts of the business that are most vulnerable to attack by disruption from new platform-based business models (from incumbents and startups inside & outside industry).
4. Align the platform opportunities alongside existing product and market strategies (platform business models live alongside traditional product strategies).
5. Present initial findings to the Board and establish a top-down C-level enterprise-wide commitment to pursuing platform business models as a strategic growth path.
6. Assess your knowledge gaps of the new rules of business: demand-side economies of scale, power law distribution, network effects, and asymmetric competition.
7. Launch a company-wide campaign on the new rules of business and platform business models. Create a network of internal platform champions to evangelize the message.
8. Assess your digital technology capabilities and gaps in building platform ecosystems.
9. Prioritize the overall opportunities and threats, and then start with a small initiative to pilot, including internal initiatives to start the journey into platform business models.
Platform Economy: 365-Day Plan
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1. Finalize plans to launch the initial pilot to work with a cloud partner to build a platform around one of the most information-intensive parts of the business.
2. Formalize agreements with the cloud partner that will be building the foundation of the platform.
3. Develop a multi-phase plan to transform parts of the business to platform business models.
4. Identify platform opportunities inside and outside your industry based on your executive training programs and platform knowledge base.
5. Establish a formal governance plan and organization to manage digital partnerships and developer communities in order to optimize the value of the platform ecosystem.
6. Formalize an approach to track and report on platform growth opportunities, relevant ecosystems, and competitive threats from both inside and outside the industry.
7. Communicate the vision of where your company fits in an economy without industry sector segmentation and with boundary-less competition.
Predictions
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Immersive becomes Pervasive.Businesses go beyond AR, VR and MR to create platforms on which customers, employees and partners can experience all the five senses – together – in any environment they choose. This leads to the early stage of dematerialization where people can be present virtually anywhere in the world at any time and
meet with their friends.
Key Takeaways
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The strategic use of technologies to create platform business
models is driving unprecedented growth opportunities in the
rapidly expanding digital economy.
Driven by the new rules of business, platform business models represent the most profound disruptive change in the global macroeconomic environment since the Industrial Revolution.
While tech and digital born organizations have been
dominating the digital economy with record-high market caps, non-tech digital leaders across all industries are developing platform strategies now (the
new tech leaders).
What’s NextNon-techs become next innovation giants. Within 3 to 5 Years, non-tech companies will emerge as leaders of technology and business model innovation, shifting power away from the traditional tech and digital born organizations.
New geographic innovation hubs emerge. This shift will inherently drive a geographic dispersion of innovation hubs away from tech centers like Silicon Valley to a variety of global hubs with industry concentrations.
Ecosystems drive market caps. Within 3 to 5 five years, market cap valuations will be largely based the power of ecosystems and digital assets, including the network effect of platform interactions and control of key digital technologies such as algorithms and APIs.
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