Platform Value Drivers

There is a great deal of hype and confusion about the creation and value of platforms. Since 2004, Google searches on the word “platforms” have increased about 300% to a peak last August. And in the last couple of years, the word has appeared in 5% to 10% of the questions clients ask or the notes of the advice we give when we answer those questions. Based on the high interest in the topic of platforms, in this podcast Gartner explores value drivers for successful platforms.A few factors that are explored regarding platforms include:The definition of a platform is less important than the proposed product’s value proposition.The platform is a product. It is a product that must be developed in alignment with the customer-centric use cases that drive compelling value that is sustainable and effective.Platform is not the same thing as the network effect. Network effect occurs in business models where something gets better with the addition of every customer.SaaS is not the same thing as platform. Structurally, a SaaS model allows for multitenancy of one or more assets — the user interface, software, data, hosting approach and many other technology elements. SaaS has robust partitions and compartmentalizes participants. A sample of interesting Gartner predictions across the extensive coverage of platforms includes:By 2025, 80% of IT spending will be subscription- and/or consumption-based, driven by a shift to product and platform business models.By 2025, four of the top ERP vendors will rebrand themselves as business platform providers