This IDC Perspective explores platform business models, a potent way to rapidly scale digital products and services. Platform business models leverage the nexus of buyers, sellers, data, and algorithms to create "matches made in heaven" that provide buyers with what they want and need and sellers with revenue while simultaneously growing the platform owner's business. As digital transformation–driven forces continue to mature and gain strength, a growing number of business leaders — spurred by the highly visible successes of Facebook, Amazon, Apple, and other platform businesses — will look to CIOs to help launch platform business models. This document empowers CIOs to identify the roles they can play in helping their businesses implement platform business models. It contains a description of platform business models and their components, why these matter, and descriptions of services that CIOs can provide and advice on how to proceed.
"Platform nomenclature has become ubiquitous and seemingly de rigueur for software vendor marketers, but that doesn't mean the concept isn't important," says Marc Strohlein, adjunct research advisor with IDC's IT Executive Programs (IEP). "In fact, many of the most successful digital businesses are founded on platform business models, and this model is fast becoming a staple of traditional businesses like GE, Boeing, and John Deere."