Srinivas Reddy’s Weblog

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Multisided Platforms

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As the year ends, this is my last day to make up for all the blogs that I was not able to post 🙂 This post is inspired by an HBR article here. Platforms are about creating marketplaces for buyers and sellers to transact at scale. This can happen in a traditional reseller business model (Walmart) or in its modern digital versions. The vendors can offer infrastructure and services (Amazon) to make transactions easy and efficient. The bargaining (pricing) power ranges based on what value each player brings. High value product (apple), High volume product (Kindle, Salesforce, Facebook). Multiple bundling/packaging options will be needed for effectively running Multisided Platform. Each entity needs to plan where they want to be in the Multisided Platform(MSP, yes one more three letter acronym) world. To complicate matters the platform providers can themselves be sellers in the marketplace (Amazon, Google,..) making it difficult for sellers to decide on contributing to the marketplace/what to contribute. While Microsoft with its windows platform had shown the power of platforms, in a more global and digital times much higher economies of scale are being achieved. This needs digital strategies to monitor and drive MSP based industry disruptions (business transformation). Need to align  core and context in a MSP world.  Cloud offers a means to more efficiently participate in the MSP world and each Industry/Line Of Business/Nation/Company/Individual need a digital transformation plan. Data driven decision making will be possible provided the digital infrastructures are extended to leverage new data capture capabilities (social, mobile, internet of things) and can analyze and act on them. Business processes need to be transformed to leverage enhanced digital integration (system of record & system of engagement). This needs a overhaul of legacy systems to modern digital infrastructures. This will be a gradual transition with huge upside for winners. In the process a lot of industry transformation will happen. Examples of some already doing this are – Uber in the car rental, Airbnb in hotel industry. Resource management will happen in a global distributed (business) network. What part of the value can be best provided by MSP (rating, payment rules,..), sellers, buyers. Should sellers setup own shops (apple stores like) to let buyers experience the product or let MSP do marketing/sales for them? To be able to get critical mass of buyers and sellers to the MSP a huge investment in the ecosystem for the long haul will be needed. As the HBR article rightly points out MSP is not for all enterprises and other niches will exist.

The digital content trying to engage you in the holiday season is a good case study to understand MSP. Given the different media trying to grab user attention, be it Content on Mobile-TV-PC-Tablet-Game Console-physical Books-physical people-physical events/places. While appstores (ex from Apple) try to engage users with 12 days of free app gift each day, online movie stores (ex from Amazon, Maxdome, Sony Enterainment) make great real time offers. How is engagement and transactions being driven? Are enterprises struggling to make their “Systems of Record (read ERP)” work in sync with their “Systems of Engagement (read social networks, web stores)”? One thing is for sure a lot of such user activity/engagement is being tracked by the MSP’s to even better target the end user. Expect the Amazons or Google or Facebook’s of this world  to know a lot more about you than you can even imagine. 

What does that mean for you as an individual? Be deliberate in all the (digital) interactions you take part in. Make sure you understand the power of platforms (be it social/professional networks, communities of practice, marketplaces,..) and have data driven experiments in place to ride the industry transformations. Ensure that all the data gathered from your engagement/transaction by the MSP’s is also available for you take some smart decisions as well.  While I do not want to end up making predictions for 2014, expect to hear monetizing “Digital Data” (big or small) a lot. Wishing all readers a very Happy New Year and hope you can keep all your new year resolutions, even if it means writing a blog post on the last day of the year 🙂

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Written by srinivasreddy

December 31, 2013 at 1:07 pm

Posted in Uncategorized

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