Platform Business Model
Massive new startups like Uber taxis, Airbnb and many more are pioneering the ‘On Demand Economy’, implementing a Cloud-based On Demand Business Framework which overlays a ‘digital mesh’ across a marketplace of vendors, such as taxi drivers or travel accommodation.
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‘ describes these 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.”
Government as a Platform
Applying the concept to the public sector is defined as ‘GaaP’ – Government as a Platform.
Tim O’Reilly coined the concept in this presentation and documented in this book section, describing how traditional IT for government should become more like Facebook, Twitter and the other Internet pioneers who have been harnessing the evolution of the Cloud to become ‘platforms’, doing so for government would enable a shared infrastructure that enables more rapid digital transformations.
As Francis Maude, Minister for the Cabinet Office, described in this article one of the biggest cost driving challenges government faces is this duplication across departments, such as the MOJ writing off a £56m project when it discovered the same system was already being developed by the same supplier with the Cabinet Office, and GaaP offers to eliminate these inefficiencies through a shared platform model.
Writing for Computer Weekly Mark Thompson asks ‘What is Government as a Platform and How Can We Achieve it?’ where he examines the key principles and how they might be implemented. In another he explores the distinction with Platforms for Government, one being still the traditional ‘cathedral’ mode of organizing government, versus the truly disruptive approach of ‘bazaar’ marketplaces.
In his Code for America video Tom Loosemore describes the background and philosophy in making it a central design model for GDS, the UK Government’s digital team. Their latest progress update is available from the GDS GaaP blog, detailing adoption case studies such as How the Department of Trade is basing their digital transformation strategy upon the model.