Most of the companies ranked among the world's top companies by market capitalization (as of August 2023) are involved in platform businesses.
The Big 5, known as " GAFAM ," are Apple, Facebook, Amazon, and recently Microsoft . If we turn our attention to China, we have Baidu, Alibaba, and Tencent, collectively known as "BAT." It is no exaggeration to say that most of the companies that have grown rapidly over the past 20 years are platform businesses.
GAFAM
What kind of business model is this platform company? If you have done a little research, you will understand that the business model itself is simple. It looks like an online version of the traditional brokerage, retail, and matching businesses.
However, this simple business model has been combined with IT and IoT and has grown to an enormous scale. As a result, in recent years, an increasing number of companies in Japan are looking to find a way forward through platform providers .
Can your company become a platform provider for something? Even netherlands business email list if you don't become a huge platform provider, there will still be an opportunity in the niche market of being a platform provider in the field. Instead, it may be better to choose the path to success by leveraging the platform.
In this article, we will introduce the meaning of platform, the characteristics and types of platform business models, and representative platform companies.
What is a platform? In other words?
The literal translation of the word "platform" is "podium, stage." In other words, a platform is something that provides a "place" for something. In the business field, a platform is a place where a large number of people and companies gather, providing an environment and mechanisms for conducting business.
A platform is a place where a large number of people and information gather, there are rules, and you can find anything you want there. There are huge platforms like Amazon, and there are also platform companies in niche areas such as real estate property matching.
History of development
Platforms are a business model that has been around for a long time . Markets and shopping malls, which were once used for bartering, are also examples of platforms.
Simple intermediary businesses and market functions changed with the spread of the Internet. Founders who realized the growth potential of the Internet started to create various businesses on the Web. Manufacturing companies also began to use the Internet to form platforms.
(Early days)
Year
event
1995
Amazon launches online bookstore
1998
Google is founded
2004
Facebook is founded
2008
Apple launches the iPhone and launches the App Store
2009
Uber is founded
2010
Apple and Google move into self-driving car space
In an age where information holds value, companies that have access to vast amounts of information can use technology to do a variety of things. By connecting all data using AI, machine learning, and IoT, new businesses can be created one after another.
However, platform businesses have become so successful that they are now viewed with caution by various countries, the general public, and academics.
Since Jean Tirole, a Nobel Prize winner in economics , published a discussion paper on platform competition in 2014, the debate over platforms has intensified. Regulation of platform operators in the EU has also been strengthened. Regarding Uber , France recently stated that contracted delivery personnel are employees.
The general public is not necessarily praising the company. When an Uber delivery person caused an accident , the company said, "The delivery person is an independent business owner and accepts the job at his/her own discretion, and the company has no employer liability," and this attitude of just handing the responsibility over to the delivery person came under moral criticism in Japan as well.
As a result, the company paid a settlement in solidarity with the delivery workers, and later entered into a comprehensive partnership agreement with Mitsui Sumitomo Insurance Co., Ltd. to provide an injury compensation system for delivery partners .
Apple has also been criticized for its 30% commission on selling apps on the App Store, which has been called an "Apple tax," and some have said that "today's Apple has become like IBM, which Apple criticized in the past." There may be other reasons, but Apple lowered its commission to 15% in 2020. Its competitor, Google Cloud Platform ( Google Play), will also lower its commission to 15%.
Platforms are businesses that are prone to creating monopolies and oligopolies, and if they become too large, they will come into conflict with nations, similar to the political and economic trilemma . Furthermore, if they become too exploitative, user support will decline. Platform businesses still have a lot of room to grow, but it is true that they are at a crossroads.
However, the IoT platform market is expected to reach US$5 billion in 2020 and US$28 billion in 2026. The market is set to grow significantly even as countries seek to find a sound business model.
Four types of platforms
The platforms are mainly divided into four types:
Online Platform
Software Platform
Content distribution platform
Cross-platform
From here, let's take a look at the features and examples of each platform.
Online Platform
An online platform is a platform for sharing information and services over the Internet. Account registration itself is free, and companies can effectively advertise and buy and sell products and services by placing advertisements or subscribing to paid plans.
Amazon
(Source: Amazon )
A typical example is Amazon. Amazon is an online sales platform that allows various sellers to sell their products and provides an environment where consumers can purchase them. Sellers pay sales commissions and delivery agency fees, allowing Amazon to make profits.
Other examples include search engines Google and Yahoo!, and social networking sites such as Facebook and X (formerly Twitter).
Software Platform
A software platform is a platform that supports the development and provision of software and applications. For example, by using a software platform, you can execute code with various triggers without building a server.
