{"id":42902,"date":"2021-02-22T10:49:02","date_gmt":"2021-02-22T02:49:02","guid":{"rendered":"https:\/\/zegal.com\/?p=42902"},"modified":"2023-03-20T16:01:17","modified_gmt":"2023-03-20T08:01:17","slug":"rise-of-digital-platforms-a-dominant-business-model-for-2021","status":"publish","type":"post","link":"https:\/\/zegal.com\/en-hk\/blog\/post\/rise-of-digital-platforms-a-dominant-business-model-for-2021\/","title":{"rendered":"Rise of Digital Platforms: A Dominant Business Model for 2021"},"content":{"rendered":"

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It’s no secret that modern technologies like digital platforms are reshaping how businesses today operate. Every time a new technology enters the market, various companies rush to become early adopters so that they can outrun competitors and gain a significant advantage. <\/span><\/p>\n

Needless to say, every technology a business adopts is disruptive at first. After a while, this new technology starts to yield great benefits. A good example of this is a digital transformation. A great many companies are currently going through this. <\/span><\/p>\n

<\/span>Digital platforms<\/span><\/span><\/h2>\n

Once this transformation is complete, companies turn towards digital platforms that encompass various services, strategies, and resources to allow companies to create an ideal business model. <\/span><\/p>\n

The sheer gravity of market dynamics basically forces companies to turn to such solutions. Basically, this is so that they can navigate the online market and achieve business success. Not only that, but consumer behaviour also changes alongside modern technology and the latest trends. Subsequently, this is yet another factor that forces companies to seek new solutions. <\/span><\/p>\n

Companies that wait too long, on the other hand, are soon left behind. Typically, these will have difficulties surviving in such a competitive environment. With that in mind, let’s have a closer look at the rise of digital platforms. And, how they’ll become the dominant business model in 2021.<\/span><\/p>\n

<\/span>The platform economy<\/span><\/span><\/h2>\n

The term “platform” we use today, in a digital sense, became uniform back in the late 1990s \u2013 early 2000s. Back then, the first platforms, such as Wikipedia, eBay, and Myspace, technically started the trend that’s been ongoing for decades. <\/span><\/p>\n

So, what exactly are digital platforms? Technically, digital platforms are matchmakers of various technology and frameworks that facilitate the modern platform economy. <\/span><\/p>\n

Generally, the most common models are transaction platforms that connect sellers and buyers. These include Amazon, Airbnb, and so on. But, there are also “innovation platforms” that provide technological frameworks upon which others can build on. For instance, the Microsoft platform. <\/span><\/p>\n

Back in the day, platforms were mainly “two-sided,” connecting one group with the other. Usually, this was for simple transactions. Nowadays, we are able to see multi-sided platforms that create entire ecosystems. They bring various groups together to facilitate value exchange under a single unified solution, i.e., platform. <\/span><\/p>\n

<\/span>Digital platforms as a business model<\/span><\/span><\/h2>\n

Believe it or not, platforms were used as a business model even before the Internet was invented. A perfect example is newspapers with a classified ads section. In other words, a platform as a business model is actually a collaboration between two or more groups of users that profit from a single platform. <\/span><\/p>\n

During the digital age, the concept was improved upon and propelled significantly. The most common example of platform business models is in collaboration between consumers, e-commerce stores, and financial institutions. <\/span><\/p>\n

For instance, let’s take the <\/span>Humm90 interest free credit card for Australia<\/span><\/a> that combines the best of all worlds. This type of financial service can provide convenience to both retailers and their customers. Customers have the ability to make interest-free purchases with cashback benefits. Whereas store owners provide customers with time to repay while they get paid instantly. <\/span><\/p>\n

It’s basically a union of services and features that benefits all parties under a single platform business model. What’s interesting is that all platform business models are able to grow, evolve and improve over time. And, in accordance with business needs. In other words, platform business models allow companies to easily adapt and keep up with market dynamics and shifts.<\/span><\/p>\n

<\/span>Creating a platform business model<\/span><\/span><\/h2>\n

The never-ending debate companies are having with themselves is whether to create their own platform or opt for a third-party model. To take one that is already pre-made and build upon that. Certainly, both options are equally viable. And, both have their strengths and weaknesses. <\/span><\/p>\n

Essentially, the answer to that question depends on business needs. As well as the approach companies wish to take. That said, cloud-based technology has revolutionized the <\/span>PaaS (Platform as a Service) model<\/span><\/a> that any company can opt for. Here are some of the advantages and disadvantages of using this model:<\/span><\/p>\n

Pros<\/span><\/h5>\n