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HANNOVER MESSE 2018, 23 - 27 April
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Platform Economics

Platform economics redefines B2C markets and leads to phenomenal growth figures. What makes platform companies like Google, Apple, Facebook, and Amazon so successful? And what can manufacturing companies learn from them?

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Platform economics: the heart of the digital revolution

Platform economics redefines B2C markets and leads to phenomenal growth figures. What makes platform companies like Google, Apple, Facebook, and Amazon so successful? And what can manufacturing companies learn from them?

Platform economics in manufacturing

For many people, digitization in manufacturing is synonymous with Industrie 4.0 – in other words, the shift toward smart production facilities and products. However, there is actually a second aspect that is overlooked in many debates: the transformation of market structures.

Redefined business models

A large number of businesses offer their products and services on digital platforms. Customers and providers are brought together.

This is especially useful for end customers. They can find everything in one place, compare prices and features, and instantly place orders. They can get apps from Apple’s App Store, purchase all kinds of goods on Amazon, browse information on any topic using Google, and find lifts and accommodations via Uber and Airbnb.

Benefits of platforms for manufacturers

Platforms offer a wide range of benefits to those who use them to present their products and services. Companies can make use of a complete infrastructure, without having to wait or build it themselves. This saves them a tremendous amount of money and effort. Without this support, many enterprises would not be able to do business.

However, it comes at a price – more than just the fee for using the platform. The businesses sell their products in a completely transparent market, just one click away from competitors. Naturally, this means there is more pressure to offer competitive prices and innovations than there is in conventional markets. At the same time, platform providers encourage this competition as it results in a more appealing offering for the end customers.

Examples show the potential of industry platforms

One of the reasons why platform providers are so successful is because they have built effective developer ecosystems. This logic is applied to the manufacturing industry through Industrie 4.0.

For example, mechanical engineering firm Trumpf founded Axoom GmbH as a digital business platform for Industrie 4.0. The company’s aim is to use browser-based software to pave the way to the smart factory of the future and smaller batch sizes in production. With the comprehensive solution, the availability of machines, materials, and employees can be managed transparently. In addition, an integrated app store gives customers access to specialized solutions from a wide range of partner companies.

Siemens, on the other hand, is launching MindSphere. This open cloud platform is designed to be a central component of IoT operating systems and make it possible to improve plants by analyzing production data. Moreover, the platform serves as a basis for applications and data-based services from Siemens and third parties – for predictive maintenance, energy data management, or resource optimization, for example.

New strategies are needed

Decision makers at manufacturing companies now facing key questions: “How will platform economics change my market? Should we develop the platforms ourselves? If so, then with which partners? And if not, how can we make the best use of the existing ones?” In summary, there is much that needs clearing up.

Digital Factory is the perfect place for manufacturing companies to exchange ideas and lay out paths to the digital future.

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