Digital Transformation, Ecosystem Design, and Platform Strategy: An IIoT Perspective.

Abstract

Platform business model and digital transformation are two hot trends that have seen many companies launch their own digital platforms. There are many new companies along with established incumbent companies adopting the platform model. They face common challenges in deciding the use cases, partners, governance, markets, positioning, and timing. I review the platform literature and overview the IIoT technology landscape. GE and Siemens are two established companies that adopted contrasting strategies for their IIoT platform. Siemens’ MindSphere is considered a success, but GE Digital, even though it spent more than $4 billion and coined the term ‘Industrial Internet’, has struggled. I draw lessons for digital platforms by comparing their approaches and results. I extend the learnings further by developing a general approach using network graph and input-output model for bottleneck market selection and market ecosystem design by converging the industry and product platform approaches. I model the selection of additional markets as sides for launch as an optimization problem. Finally, I provide a decision framework for positioning of the platform during market launch. The work done aids platform owners in deciding their strategy and resulting scope of the platform.