What is Digital Platforms Exchanges?

what is Digital platforms exchanges innovation

Described as the “digital economy”, digital platforms are a collection of technologies that co-create an ecosystem of demand and supply. The platform owner provides boundary resources that complementors can use to co-create value. For example, SAP leverages third-party innovation in its SAP Cloud Platform. It offers APIs and other resources that enable SAP partners to create new applications, such as an application for monitoring endangered species.

Moreover, digital platforms can build on each other by leveraging complementary high and low-autonomy components. For example, Android incorporates value-adding complements developed by highly autonomous developers and keeps low-autonomy relationships in the Open Hardware Alliance (OHA).

The design and governance of digital platform ecosystems is influenced by the ownership structure of the platforms. The concept of platform ownership does not refer to the legal ownership of digital platforms, but to the distribution of power within an ecosystem. Different models of ownership differ in the degree of power centralization they entail. The three main archetypes of platform ownership include:

Successful digital platform ecosystems foster value creation by facilitating transactions between complementors and platform owners. These ecosystems foster innovation by providing the necessary affordances and a breeding ground for new ideas. To understand the concept of a digital platform ecosystem, a firm should define its roles within the ecosystem. The role of each participant depends on the organization’s ownership structure and technical architecture. It is important to understand the value distribution of these platforms to ensure that they are maximizing value for the platform owners and users.