Building a Better Platform

In the ever-changing business world, the race among competitors to build better digital platforms is heating up. The traditional model—where companies thrive or die on the financial success of self-built newer, faster, cheaper, brighter products—remains in play. However, look at a significant number of the world’s biggest companies (by market capitalization) and they’re digital platform firms. Think Apple Inc., Amazon.com Inc. and Facebook.

Such companies allow other businesses to easily link with them and to create products and services on their “stages.” The resulting combination generates value for both sides.

Take Apple Inc. as an example. It first changed the world with its computers, and new products still drive performance. However, with its 2003 launch of the iTunes Store, Apple added another revenue stream, without owning or initially producing musical content¹. Think of the App Store on every iPhone or iPad and the additional value its millions of choices have created for Apple and various app developers since its launch in 2008.

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