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Mobile Phones UK Authors: OnPage Blog, Yeshim Deniz, Mat Rider, Valeriia Timokhina, Jayaram Krishnaswamy

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XaaP! It’s the Platform Business Model

The primary business context for Cloud Native case studies like Netflix is the ‘Platform Business Model‘, the conceptual design model for the particular commercial models they implement as well, one that is directly enabled by the technology.

Considering the business wealth a ‘simple’ mobile phone app has generated for Uber Taxis this relationship is not hard to identify in action, and is often communicated through social media, highlighting that neither owns any taxis or hotels but in a few short years now command the largest fleets and room availability, vastly larger than their traditional competitors who took decades to do so.

The Platform Revolution

The repeatable secret sauce is the Platform Business Model, described in detail through academic literature and popular business books.

For example the MIT book ‘Platform Revolution‘ to set the scene for the market trend that Cloud Foundry is addressing and is ideal for.

The Platform Business Model has emerged as the moniker for defining the hyper-scale disruptors like Netflix, Uber, Airbnb, Facebook, Twitter et al, as the book describes:

“Facebook, PayPal, Alibaba, Uber-these seemingly disparate companies have upended entire industries by harnessing a single phenomenon: the platform business model.”

The book builds on prior MIT research, such as this detailed 2007 research report on Platform Networks, this highly recommended presentation Platform Strategy and Open Business Models, and in a simpler format in this presentation, which defines:

“A “Network platform” is defined by the subset of components used in common across a suite of products (Boudreau, 2006) that also exhibit network effects. Value is exchanged among a triangular set of relationships including users, component suppliers (co-developers), and platform firms.”

Throughout these materials they provide an anatomy of these business models, exploring dynamics such as “multi-sided pricing“.

Platforms are marketplace models, ranging from the people-centric services like Uber taxis and Airbnb accommodation, through to electronic distribution channels like Apple and X-Box. MIT examines the different permutations and shares those best practice insights.

ondemand-uber2http://cloudbestpractices.net/wp-content/uploads/2015/03/ondemand-uber2-... 1024w, http://cloudbestpractices.net/wp-content/uploads/2015/03/ondemand-uber2-... 500w" sizes="(max-width: 300px) 100vw, 300px">The Sharing Economy Meets Elastic Cloud Business Models

The MIT research explores the different dynamics of platform scenarios and markets, like Microsoft vs Apple across computers, portable music players and ultimately smartphones.

The trend has also been described as ‘The Sharing Economy‘, a wave that the disruptors ride through technology innovation.

The dynamism of Cloud computing is a perfect match for this equally ‘organic’ approach to resource management, both scaling in real-time to actual market demand experienced.

As the new breed of hyper-scale startups like Uber, Netflix, Airbnb are demonstrating when it is combined with massive investment financing and highly scalable mobile and Cloud application services, it very quickly becomes an all-dominating behemoth, unstoppable unless you compete on the same level.

Hence why the business model itself has become so important and popular. For example Dan Woods says your CDO efforts will fail unless you adopt Platforms.

cloud.govXaaP – Industry scenarios for Platform adoption

The enabling relationship between Cloud computing and the increasing maturity of the model, as demonstrated by real-world adoption successes, is characterized by how they’re described as “XaaP” initiatives, by which I mean for example:

Real world case studies of the business model and technology platform have been pioneered in even the sectors usually most resistant to disruptive change.

For example in the public sector the UK has pioneered the G-Cloud procurement framework, a marketplace platform model for enabling standardized purchasing of government cloud services, and in the USA they recently launched Cloud.gov, a Cloud Foundry-based PaaS for the public sector to utilize to grow their rates of software innovation.

Through this Cloud Native ebook series we’ll profile more of this case studies in detail.

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