Over the years, the concept of platform has evolved, expanding in many directions, for example leaving the perimeter of the single organization, that characterized the concept of internal or product platforms, and involving other companies giving rise to the concept of Innovation Platform, also known as Industry-Wide platform. Also in this case we can start from an example: the Personal Computer and the work done by Microsoft, Intel and IBM. The three companies combined their hardware and software components to create a central platform that replicated the typical dynamics of a product platform: being able to create a multitude of products by leveraging existing components. Put in another way, Microsoft, Intel and IBM together create the computer and start selling it in the marketplace, convincing a range of consumers. Microsoft, dealing with the development of the operating system, also begins to develop a series of software that can expand the functionalities of the computer, think for example of the office suite with Word, Excel and Power Point. Unlike what - at least initially, Apple did, keeping the Operating system completely closed and not allowing anyone building applications on it - Microsoft, IBM and Intel decided to open the platform to external software developers, think for example of those who created softwares like Photoshop or Autocad. In this way we see a part of the dynamics of the product platform replicated: on the basis of a set of pre-existing components, in this case the computer and the Operating system, it is possible to develop new products, in this case software, without having to rebuild from scratch the whole system. The process of opening the platform was not limited to the involvement of the three players, but expanded to give other organizations the opportunity to develop new applications for their system, further exploiting the potential of a platform. This decision opens up new value generation dynamics. In fact, every time an external company decides to create new software on the platform created by IBM, Microsoft and Intel it is using their basic structure to make innovation - hence the name innovation platform - increasing the value of the platform itself for the end customer. This move induces two key features. First, this kind of platform generates a virtuous cycle of value creation and capture. The more developers choose to develop their services on a specific platform, the more end users will choose that platform over competitors and vice versa, giving rise to the phenomenon of cross-side or indirect network externalities. In addition, the central platform- the structure created by Intel, Microsoft and IBM-becomes an intermediary between the end users and the developers-often referred to as complementors. Typically, this value is captured either by retaining a percentage of transactions made between the users and the complementors, or by charging the complementors for access to the platform. In other words, an innovation platform can capture value in two ways: - By directly selling the platform, such as the computer - Allowing others to innovate on its platform, and keeping part of the created value. We can define innovation platforms as products, services or technologies that act as a foundation on which external innovators, called complementors, can develop their own complementary products, services or technologies. In the beginning I said that Innovation Platforms are also called industry-wide platforms because they have a role within the specific industry in which they operate and allow complementors to become part of their system. These external innovators have the possibility to work on a semi-finished product, to have a basic structure supporting their work and through which to reach final customers. Typical examples, besides the already mentioned computer created by Microsoft, Intel and IBM, are all the operating systems, such as Android or iOS that transformed smartphones from simple products to innovation platforms. Other examples are consoles for video games, which have on one side players and on the other side developers, but also open technological standards such as the DVD format for example. To conclude, we try to highlight the main similarities and differences with respect to product platforms. Similarities: - Like product platforms, innovation platforms enable innovation, by simplifying future development processes. - Also in this case, starting form a common structure, we can get to very diversified and targeted products and services Differences: - In this case the platform can be itself a product (like a game console for example) - There are network externalities that, if triggered, can dramatically increase the value of the platform - You can monetize both the platform and capture value through innovations created by complementors Obviously, we cannot overlook that opening to external actors will make this strategy less controllable than an internal platform, requiring the company or companies that create the platform to decide whether and how much to control what third-party actors will be allowed to do or not on their platform.
