Technology markets are currently in the middle of a huge shift in how businesses are established, how business is conducted, and how value is created. When it comes to how technology companies build their businesses it used to be about who had the best applications and the most capabilities. But that is shifting – now with the cloud, headless development, AI, and more applications and pricing are almost homogenous. What has become king in this world is the platforms and their ecosystem.
Better applications are losing to companies that optimize their ecosystem. We would venture to say that the ecosystems that platforms build around them and the ecosystems of technology partners that applications place themselves in are more important than the product itself. Marc Anderseen famously said that "software is eating the world." Today, platforms and their ecosystems are consuming the software world.
Fading away are linear processes from supply chains to customer journeys. Instead, it is a circular systems model that is constantly iterating and morphing based upon immediate feedback within the ecosystem. Network effects are enhanced by technologies that create efficiencies within an ecosystem, and what were once thought to be a threat to a firm can now add value.
Application technology firms along with their partners and services providers need to rethink their strategy and how they find and create value, and to do that they need to understand the evolving world of platform ecosystems.