Platform business models: Let them build it and they will come

Service providers we interviewed for our new report on orchestration told us they see orchestration as a key component in their transformation strategies, particularly with regards to plans to turn the network and supporting operations inside out, making them platforms. In discussing some of the key findings of this primary research on our recent webinar, Orchestration: Get ready for the platform revolution, Barry Graham, Senior Director, Agile Business & IT Program, TM Forum, was asked an interesting question from an audience member: Are we focusing too much on the technological aspects of orchestration? Should we start by analyzing the value chain model first?

Barry responded, “Identifying value chains is becoming more and more difficult. What we see far more are situations where people are making money out of enabling business than from the business itself. Look at Amazon or Alibaba or Uber – these are businesses that primarily make more money out of connecting people. Alibaba doesn’t sell anything of its own; it just connects people. Yet it is one of the biggest wholesale transaction sites in the world.”

He adds, “Value chain modeling and analysis is interesting, but I think what the platform business model tells us is that maybe it’s about enabling people to build value fabrics themselves.”

Platform technology meets platform business models

Barry says analyzing the business model is important but it is about a different mindset now. He explains that in the past operators looked at how they could make money: “Operators created walled-garden approaches, surveyed users and took months to pull those services together.” In a platform world, they create marketplaces for people to do business and then really it is up to the producers and consumers what business they do with it. Operators create the environment, they may market what’s successful to fuel the fire that they light but, “it’s about enabling whole value fabrics, not understanding individual business cases and then building them.”

Barry highlights the technical foundations that underpin and enable platform business models. He says, “That’s why orchestration, which is indeed a technology, is important, because it allows that dynamic behavior.”

Find out more about the work we are doing to build those technical foundations here and by watching the full webinar.