Platforms enable the direct digital interaction of two or more user sites. They bring together communities of buyers and sellers so goods, information, jobs and services can be freely offered or requested. This creates markets of enormous scale.
Seven out of the ten most valuable companies globally are based on a platform business model, Alibaba, Alphabet, Amazon, Facebook, Tencent and others have all grown exponentially and seized market share from established businesses. Such firms combine and recombine open-source software, cloud computing and social networks to create new services.
However, “pre-internet” companies have also developed innovative models that extended digital platforms beyond the fields of travel, books, social media and music. Digital platforms are making significant inroads into areas such as banking, energy, transportation and even healthcare.
“I think there is a growing urgency in business about digital platforms and that is across all industries,” says Adeline Roupillard, Head of Digital Distribution at AGCS. In her role, she oversees MySmartGate, a business-to-business (B2B) platform that offers underwriting solutions to more than 3000 users in seven countries, giving them the ability to quote, bind and renew business online in a few clicks.
Using insurance as an example, Roupillard explains that companies seeking to broaden beyond traditional one-to-one customer relationships began introducing digital solutions in the early years of this century. This led to the rise of extranets, private networks that allowed authorized partners, vendors and customers to access information and products on an organization’s network.
“That was innovative, but expensive,” comments Roupillard. “It was also unsatisfactory for brokers as they needed as many different interfaces as they had partners, while customers could only access one carrier’s product offering.”