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Multi-sided platforms

October 25, 2011. Abbott - Multi-sided platforms. 2. The USPS.

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Multi-sided platforms

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    1. Multi-sided platforms Russ Abbott Department of Computer Science, California State University, Los Angeles and The Aerospace Corporation

    2. October 26, 2011 Abbott - Multi-sided platforms 2 The USPS Open at the top; open at the bottom; and continually (but slowly) changing IEEE Conference on Systems of systems. Top: what we do with it. Open to new uses, e.g., the flourishing world of mail-order catalogs; chain letters. Bottom: how it is implemented. Open to new implementations, e.g., with changing technologies from the pony express to commercial jets (Slowly) changing: the abstractions it defines. Change slowly, e.g., zip codes, second class mail, express mail. Something important. Not quite sure what it was. Not necessarily technological. But a lot like the Internet and Service Oriented Architectures (SOA).

    3. October 26, 2011 Abbott - Multi-sided platforms 3 Multi-sided software platforms Evans, Hagiu, and Schmalensee (2006) Invisible Engines: How Software Platforms Drive Innovation and Transform Industries, MIT Press. (freely downloadable) Operating systems and game consoles. More examples: shopping centers, dating websites, TV channels, TV talk shows, Amazon resellers, telephone & telegraph systems. The web browser: web sites and surfers. Google dynamically generates multi-sided platforms of search result pages (sites and searchers.

    4. October 26, 2011 Abbott - Multi-sided platforms 4 Two- (and multi-) sided markets Markets that connect disparate groups. A stock exchange matches buyers and sellers. A credit card system matches merchants and cardholders. Not your usual business model: buy; add value; sell. The value to each group increases as the size of the other group(s) grow. (Also known as network effect.) By providing services to two groups of users one can sell access to one group to the other. A TV station matches creators of programming and viewers, access to which it then sells to advertisers. Google! Sometimes both groups can be charged some credit cards, classified ads. Often the seller pays (eBay). In The Recycler ads are free; the buyers pay.

    5. October 26, 2011 Abbott - Multi-sided platforms 5 Multi-sided platforms as refactorings A multi-sided platform may be understood as the standardization and factoring out (refactoring) of a hard part of an interaction and providing it as a service. USPS: sending & receiving materials. Credit card: paying and being paid. Dating service: finding the other party and making an initial contact.

    6. October 26, 2011 Abbott - Multi-sided platforms 6 Platform operational structure

    7. October 26, 2011 Abbott - Multi-sided platforms 7 Software platforms as refactorings Think about the abstractions (data types and operations on objects of those types) platforms offer and what implements the abstractions. Recall from last year that emergence is a level of abstraction. Databases: store, modify, and retrieve tabular data or linked text as in Wikipedia. Each platform is a single shared implementation. File extensions for shared files, e.g., .doc, .xl. Each user has his/her own implementation.

    8. October 26, 2011 Abbott - Multi-sided platforms 8 File extensions for shared files (.doc, .xl) Each user has his/her own implementation.

    9. October 26, 2011 Abbott - Multi-sided platforms 9 Infrastructure platforms The interests of platform owners (maximize profit) are not always the same as those of platform users. Some platforms are so important we dont want the owners interests to take priority. Publicly owned and operated (or highly regulated) multi-sided platforms: USPS. (So important its in the constitution.) telephone system. FDA an artificial platform imposed between seller and buyer. Not every important platform is multi-sided: power system, roads and highways, ... are single-sided.

    10. October 26, 2011 Abbott - Multi-sided platforms 10 Standards as (ephemeral) platforms Since a platform is a level of abstraction, it can be characterized by a specification. The specification can then serve as the definition of the platform, e.g., HTML. Multiple vendors can be encouraged to compete to implement it. Defangs the platform owner Favored by platform users.

    11. October 26, 2011 Abbott - Multi-sided platforms 11 Open source platforms If your business depended on a platform, would you want that platform owned (and controlled) by some other business? Open source software. Two categories: money driven and other. Iansiti and Richards, http://www.hbs.edu/research/pdf/07-028.pdf Money-driven tend to be multi-sided platforms. Top two in terms of corporate support: Linux and Firefox.

    12. October 26, 2011 Abbott - Multi-sided platforms 12 Platforms as environments Sometimes platforms define an environment. The free market economic system is defined primarily by two platforms. The monetary and banking system. Factors out the economic notion of value. Allows value to be abstracted, stored, exchanged with minimal overhead. The legal and judicial system. Factors out agreements (contracts) and enforcement mechanisms. Overhead not so minimal (lawyers) but better than hiring your own enforcers. Used to rely more on reputation. Still do in eBay. Much too important to be controlled privately.

    13. October 26, 2011 Abbott - Multi-sided platforms 13 Natural language: the crown jewel of multi-sided platforms. Open at the top: virtually unlimited creativity. Open at the bottom: we each build our own implementations. Continually (but slowly) changing. Its a standard. We have dictionaries and grammar books for standard English. We all implement our versions of the standard. Its open source. It is continually undergoing modification but slowly enough so that most of us can keep up.

    14. October 26, 2011 Abbott - Multi-sided platforms 14 The New C2

    15. October 26, 2011 Abbott - Multi-sided platforms 15 Backup

    16. October 26, 2011 Abbott - Multi-sided platforms 16 How to open a locked door Use a key. Use a screwdriver to take off the lock. Use an explosive to blow down the door. If you cant get what you want within the economic system, step out of it and get it in the broader system: steal. The state has a monopoly on the use of force. May not step out of the abstraction.

    17. October 26, 2011 Abbott - Multi-sided platforms 17 Nature as a collection of platforms This works especially well for human beings who can choose to operate on many different levels. It also works for (multi-scalar) natural phenomena: biological arms races; gecko.

    18. October 26, 2011 Abbott - Multi-sided platforms 18 The New C2 Autonomy. Power to the edge implies a radical devolution of initiative, responsibility, and authority. Community. Common resources, e.g., the web, are needed for edge elements to interact. Hierarchy. Structure is needed to apply and coordinate large-scale resources.

    19. October 26, 2011 Abbott - Multi-sided platforms 19 E.g., the .doc level of abstraction Types and operations implemented by MS Word. Single-sided for an individual who is writing a document to be printed. Multi-sided when multiple individuals share a document. Each user has his own .doc implementation. Like a browser but in contrast to a shopping center, a database, a credit card system, or a dating service in which there are shared implementations.

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