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Digital Transformation – Digital Platforms characteristics

Smartphones have created a de-facto Digital Platform that industry and institutions are leveraging. Image credit: Space Technologies

I started my discussion on Digital Platforms considering the one created by smartphones because it was easy to point out the basic characteristics of a Digital Platform:

  • it needs to have storage capabilities
  • it needs to have processing capabilities
  • it needs to have embedded connectivity
  • it needs to be open to let third parties develop on it
  • it needs to affirm a standard to decrease the cost of interfacing
  • it needs to support scaling to accommodate more users and features
  • it needs to aggregate investment creating an attraction point

All of these features are present in the digital platform created by smartphones:

  • each smartphone has GB of storage capacity on board and this capacity keeps growing, thus fuelling new applications. Samsung has recently announced 1TB Universal Flash Storage and its new Galaxy S10 might be offered in a configuration with 1TB. Notice that it took just 4 years to move from 128GB to 1TB, that is a doubling of capacity every year, faster than the Moore’s law prediction;
  • each smartphone has a processing capacity that far exceed the one of personal computers had 5 years before and the one of supercomputer had 20 years before. This processing power keeps growing each year as new generation chips become available.  Notice that nowadays processing power in a smartphone is no longer an issue and comparing different smartphones based on processing power is basically meaningless. Smartphone are a delicate engineering tradeoff between various characteristics, like processing capacity, graphic processing capacity, power consumption, screen resolution, thickness, heat dissipation, radio reception…;
  • smartphones have increased their connection capability, actually anticipating 5G in the sense of being able to manage concurrently several radio channels (and different communications protocols). A smartphone today can operate on a variety of spectrum frequencies, using GSM, 3G, LTE, Bluetooth, WiFi, NFC protocols. In this respect it is more sophisticated than a radio station of a Telecom Operator. Besides it can create and manage local networks (tethering);
  • smartphones have a very limited  number of operating systems (with Android and IOS taking the lion share). This create a consistent and open environment for third parties to develop applications. Third parties see the advantage of developing their apps on these software environment since they are assured of a huge potential market. Additionally, the periodical updates to those OSs take care of backward compatibility (or makes sure that an easy path to compatibility is provided) thus preserving the investment in developing applications (notice that the average life cycle of apps is pretty short, so repetitive changes in OS version that eventually lead to incompatibility are not seen as a problem, the investment in developing the apps having been recovered);
  • smartphones, as just pointed out, use a very limited set of OS that create an aggregation point for third parties. Equally important the companies behind these OSs have created and made available an application development environment (e.g. Android, IOS) that is both facilitating third parties development of application and provides uniformity (as an example in the user interface), a most crucial aspect to ease users interactions;
  • smartphones continuous development (and significant backward compatibility of applications) makes scaling possible in terms of delivering ever more complex apps and their intrinsic distribution that is managed collectively by the increased capabilities in the network access makes scaling of their number a reality that we keep witnessing. Possibly no other infrastructures has proven so good at scaling: we have moved from few thousand to several billion phones worldwide, with no issues in service provisioning (occasional downtime generate surprise in addition to anger and this is proof of how good the service really is);
  • smartphones growth is the result of a massively distributed investment, sustained (mostly) by individual users. This investment requires an investment from the network side (roughly in a 70 to 30% ratio, meaning the end users bear 70% of the overall cost and the Operators 30%) but this investment is both much lower than the one required by a fixed network and most importantly it scales smoothly with revenues. Operators can invest at the same time as they get returns (this is not the case for a fixed network). Hence smartphones have created, and keeps creating a growing business opportunity that attracts more and more business which in turns steer the overall growth.

These characteristics of smartphones, seen as a Digital Platform, need to be present in other Digital Platforms to have them succeeding. This is also what one should look for when both assessing the chances of a digital platform and when designing a digital platform.

Self-driving cars may become a digital platform, they have, at the core, all the characteristics I have been discussing above but of course work is needed to develop them and make the whole ecosystem develop. This is a role of institutions, regulators, industry. It is also a space where neutral organisations like EIT Digital and IEEE may play a significant leading role.

About Roberto Saracco

Roberto Saracco fell in love with technology and its implications long time ago. His background is in math and computer science. He's currently the Chair of the Symbiotic Autonomous Systems Initiative of IEEE-FDC. Until April 2017 he led the EIT Digital Italian Node and up to September 2018 he was the Head of the EIT Digital Industrial Doctoral School. Previously, up to December 2011, he was the Director of the Telecom Italia Future Centre in Venice, looking at the interplay of technology evolution, economics and society. At the turn of the century he led a World Bank-Infodev project to stimulate entrepreneurship in Latin America. He is a senior member of IEEE where he leads the Industry Advisory Board within the Future Directions Committee. He teaches a Master course on Technology Forecasting and Market impact at the University of Trento. He has published over 100 papers in journals and magazines and 14 books. He writes a daily blog,  http://sites.ieee.org/futuredirections/category/blog/, with commentary on innovation in various technology and market areas.

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