Open Data Propels Platforms
The 10th annual MIT Platform Strategy Summit tracks a decade of data and business transformation
By Peter Krass
It’s taken a decade for global enterprises to stop hoarding their data to unlock its value. Now organizations ranging from universities to Coca Cola Co., Nike to Schneider Electric are all getting on board.
That was a central theme of this year’s MIT Platform Strategy Summit, a hybrid live/online event hosted by the MIT Initiative on the Digital Economy (IDE) on July 14. Leading organizations have tapped into the power of platforms, using APIs and other technologies to share data in internal and external ecosystems. As a result, they’re benefitting from network effects and revolutionizing their markets.
While platforms are still gaining traction in a few sectors, they’re immensely more mainstream than they were a decade ago.
That’s when Geoffrey Parker, a professor of engineering at Dartmouth College, and his colleagues realized the rise of online companies such as Amazon, Facebook, and Google was due to their new business models based on platforms.
“One reason we launched this event,” said Parker, a Summit co-chair as well as a research fellow at MIT IDE, “was to create a forum to reassure ourselves we weren’t crazy. These business models are real, and they will have a significant impact on the world economy.”
Fast-forward 10 years, and the hypothesis has been amply proven. As more than 150 in-person plus nearly 1,000 online attendees of this year’s summit heard, platforms are now transforming entire industries including finance, healthcare, manufacturing, retail, education, and consulting, as well as disciplines such as HR and marketing.
“Data use is more important than ever,” said Svenja Falk, managing director of Accenture Research and one of the day’s moderators, but new issues have surfaced as platforms proliferate, too.
Stretching the Boundaries
Falk’s panel, “The New Digital Divide,” explored several regulatory and geopolitical barriers to sharing data. One factor raising these barriers: The United States, European Union, and China each have very different ideas about how or even whether data should be shared.
Panelist Peter Weckesser, chief digital officer of Schneider Electric, pointed out that in a traditional business like his, data operates in two dimensions: internally, where data needs to accessible for insights across the organization; and externally, as part of an open platform. That’s why Schneider is experimenting with a practice it calls “power couples,” in which data projects are owned by both business-process and IT platform leaders. “The data layer,” Weckesser added, “is the foundation for any business process.”
At the other end of the spectrum, forward-looking panelists looked ahead to what Web3 might bring in the coming decade. Panelists led by Peter Evans, managing partner of the Platform Strategy Institute and a Summit co-chair, debated blockchain, the metaverse, AI, virtual reality and more. Because these technologies are currently more promise than reality, they’ve attracted both advocates and skeptics.
“The metaverse is a set of possibilities and promises, but it doesn’t exist yet,” said panelist Lauren Lubetsky, co-author of a recent Deloitte white paper on the topic. “It’s hard to imagine a world of complete decentralization, where everyone owns everything and no one is the central owner. That scares CIOs.” At the same time, other panelists noted that Web 3 is real, with many businesses testing the waters. “We’re always looking for new emerging technologies that could displace current technologies,” said Adam Schouela, head of emerging tech at the Fidelity Center for Applied Technology. “Then we roll up our sleeves, try it, and figure out what it means for us.”
The Experience Economy
The platform landscape clearly varies among industries and follows economic trends. For example, a panel on the future of retail included a fascinating emphasis on experiential marketing. Jonathan Yaffee, a former marketing executive with Red Bull and now co-founder and CEO of experience relationship management agency AnyRoad, asserted, “We’re transforming from a ‘things’ economy to an ‘experience’ economy.”
Yaffee cited Dick’s Sporting Goods, which has turned its stores into sports places; Nike, which has outfitted some of its retail stores with basketball courts; and Michaels Companies, which created an online arts-and-crafts teaching platform that reaches more than 1 million students a year.
These platforms not only create communities of loyal (and big-spending) customers, they also provide the companies with all-important data about those customers. As Yaffee explained, businesses can then use that data to predict a customer’s lifetime value, the new metric of success. The physical stores are less about product sales — which can be done online — than building on these experiences.
New Lessons for Professors
On a different front, the use of platforms in education and training was a hot topic — and one close to home for the academics at the event. “Can universities become platforms?” asked moderator Marshall Van Alstyne, a professor at Boston University and a Summit co-chair. “Or are they doomed to shrink?”
The question is more than hypothetical. Panelist Anant Agarwal is the founder of edX and now chief open education officer of 2U, a global online learning platform. His company’s 4,000+ courses have reached more than 44 million learners worldwide.
“The model is changing,” Agarwal said. “The old model of ‘sage on a stage’ can be done more effectively online. But as for coaching, that’s still done side-by-side. That’s the future of education.”
Fellow panelist Tapaswee Chandele provided a different perspective as Coca Cola Co.’s global VP of talent and development. The giant multinational company takes its platform approach so seriously; it has created a Platform Services organization and is now launching an internal talent marketplace. “Skills have become currency,” Chandele said.
The day was capped by the mind-expanding presentation of Dava Newman, director of the MIT Media Lab. She discussed such far-out topics as the search for life elsewhere in the universe, making oxygen on Mars, and a concept known as Earth Embassy, complete with its own operating system. “It’s all about design and action for the future we want to live in,” Newman said.
Searching for life in outer space certainly isn’t among the daily concerns of most businesspeople. But it illustrates how data — as well as and ideas — can deliver value when open and shared. The potential is unlimited.
Peter Krass is a contributing writer and editor for MIT IDE, and a longtime business and technology journalist.