Definition

platform business model

Contributor(s): Ben Cole

A platform business model is a plan for creating revenue by allowing registered members to create content that can be consumed by a specific user group or general audience.

The platform business model differs from the traditional pipe, or linear business model, in which a company relies on its own resources to deliver a product or service to customers. Some common characteristics of a platform business model include:

  • Allowing users to both create and consume value. YouTube is a good example of this trait, as users are able to view video content and comment on it, as well as produce video content for others to consume.
  • Providing open APIs that give external developers the ability to expand the platform's functionality by allowing various application programs to interact and share data.
  • Creating an ecosystem that encourages registered users and content consumers to add more value to the platform by repeatedly creating more content which will, in turn, attract additional content creators and consumers.

The platform business model's popularity has grown in recent years as connected technology such as cloud computing, social media and mobility have proliferated. These technologies have advanced the platform business model by allowing the fast, large-scale exchange of products and information between decentralized networks located anywhere in the global marketplace.

This was last updated in March 2016

Continue Reading About platform business model

Dig Deeper on Enterprise ITIL and ITSM

PRO+

Content

Find more PRO+ content and other member only offers, here.

Join the conversation

1 comment

Send me notifications when other members comment.

By submitting you agree to receive email from TechTarget and its partners. If you reside outside of the United States, you consent to having your personal data transferred to and processed in the United States. Privacy

Please create a username to comment.

What do you think are the best examples of a successful platform business model?
Cancel

-ADS BY GOOGLE

File Extensions and File Formats

Powered by:

SearchCompliance

SearchHealthIT

SearchCloudComputing

SearchMobileComputing

SearchDataCenter

Close