Platform Sprawl Leaves No Industry Behind

MIT Sloan Management Review

July 7, 2017

By Geoffrey Parker, Marshall Van Alstyne, and Sangeet Choudary

Digital platforms are making inroads and creating a $5 trillion market.

The “age of platforms” is now firmly established. As we described in our 2016 book, Platform Revolution, platforms are no longer restricted to retail or high-tech, but are visible across multiple industries — and the trend is accelerating.

In the book, we highlighted the trend by noting that in 2007, the five major mobile-phone manufacturers — Nokia, Samsung, Motorola, Sony Ericsson, and LG — collectively controlled 90% of the industry’s global profits. That year, Apple’s iPhone was launched and started taking market share. By 2015, the iPhone generated 92% of global mobile-phone profits.

It’s a great story, but the way it progressed seemed almost unique — until now. The iPhone’s rapid domination, and the subsequent free fall of competitors, has become a recurring story. Apple exploited the power of platforms to match producers and consumers in high-value exchanges. Their chief assets are information and interactions, which also create platform value and competitive advantage.

Today, so many industries are realizing the importance of moving to platforms that few industries are exempt. For example:

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