How to Leverage a Platform Strategy to Fuel Your Growth

Before 2020, probably no one could have imagined that the New York Stock Exchange would have to close its historic trading floor for two months and move its operations fully online due to a global pandemic. As COVID-19 continues to dramatically impact the way we work and live, businesses have been challenged to respond and adapt to a new world. Our latest Global Tech Trends Survey conducted with 2,600 IT decision makers indicates that 64% of global digital leaders expect long-term changes to working arrangements, making digital transformation no longer a faraway goal, but a reality long overdue.

Although many businesses have already embarked on their digital journey to tackle the issues brought about by remote operations, it is critical for digital leaders to take a step back, consider the broader picture and rethink their strategies. At the end of the day, digital transformation is all about boosting business agility, optimizing costs and improving efficiency through automation. As markets become more global and interconnected, digital leaders need a clear vision of their future to ensure that the optimal digital infrastructure is in place to bring it to life.

We have also seen a steady rise in the popularity of the platform business model, as businesses start to look for solutions that open up direct-to-customer opportunities. To help them gain more insights about the platform economy, we recently hosted the Platform Equinix Digital Leaders’ Summit 2021, where we sat down with industry leaders to discuss how platforms can be leveraged to recalibrate and digitalize business models for future growth.

Platform – the enabler for a digital future

According to Deloitte, a platform business “is a business model that focuses on facilitating interactions across a large number of participants”, where the value of the platform grows exponentially when more participants are involved. Over the past decade, an increasing number of businesses have been adopting the platform business model, as this enables them to have “a governance structure and a set of standards and protocols that facilitate interactions at scale, so that network effects can be unleashed.” ^[1]

When we take a closer look at the companies that have successfully implemented the platform model, it is clear that a future-first mindset has been a foundational element from the get-go, with an early focus on creating a network of networks within a particular ecosystem or even between different ecosystems. For traditional businesses on the cusp of their digital journey, this mindset is equally important. Having clear targets and understanding well the problems that digital transformation can solve will help leaders plan and develop the optimal digital infrastructure architecture in advance to enable their platform vision. Such businesses can leverage platforms to expand in a scalable and flexible way that can keep up with their evolving needs as they grow. Platforms can also enable a higher feature velocity and relatively lower marginal costs by allowing businesses to develop new capabilities through reusing and repackaging existing building blocks in new ways based on different sets of requirements.

As new technology trends continue to emerge and shape the future into a post-pandemic world, platforms can play an even bigger role by enabling businesses to pivot quickly when market conditions change. Earlier this year, we published a blog post to discuss some of the key technology trends that we believe will impact the future of digital infrastructure in the coming years. These are the following:

• Cloud-native infrastructure will dominate
• Edge-first paradigm will fuel innovation
• 5G will be powered by optimally-placed edge infrastructure
• AI will be distributed and move toward the edge
• Data centers will shift towards grid-positive

These trends will further accelerate the development of the platform economy. We believe that leaders who understand and embrace the technology trends that are shaping the future of digital infrastructure will be better prepared to respond to the opportunities of our new world and will also be enabled to more effectively realize the benefits of the platform economy.

[1] https://www2.deloitte.com/ch/en/pages/innovation/articles/platform-business-model-explained.html#:~:text=What%20we%20mean%20with%20a,a%20large%20number%20of%20participants.&text=The%20platform%20business%20model%20does,facilitates%20the%20means%20of%20connection.