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Sam Palmisano defines a platform enterprise

It's full steam ahead for the platform enterprise. That's according to Sam Palmisano, former CEO at IBM and current chairman at The Center for Global Enterprise, a nonprofit research institute. Palmisano was one of several IT executives who spoke at the recent MIT Platform Strategy Summit. During his session, titled "The Rise of the Platform Enterprise," he explained how the forces of globalization and technology are birthing new opportunities -- and challenges -- for platform-based companies.

But to understand the impact this platform revolution will have, one first has to understand what exactly a platform enterprise is. In this CIO Minute video filmed at the event, Palmisano shares his definition with SearchCIO.

What is a platform enterprise?

Sam Palmisano: "Think about a platform enterprise as a company that has a set of technologies that provides all the support services that enable its services or product offerings to try [to] take to the marketplace. A good example is Uber and ridesharing. So, the platform of Uber is how you book your reservation, how you do the billing, how they schedule the drivers, et cetera -- that's the platform. It's ubiquitous; it's common around the world. And ... therefore they provide this service which is an alternative to traditional taxi transportation.

"The platform allows it to scale and grow very, very quickly because you don't have to redo all these systems that you've had in the past that were sort of functionally aligned to the organization. This is really kind of a homogeneous support system."

SearchCIO's CIO Minute is a video dispatch providing CIOs and IT executives with tips and trends from leading technology experts.

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What is the most important element of a platform enterprise?
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Its design, whether its governance rules and incentive structure help platform consumers and producers exchange value.
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The key to platform enterprises is a well defined operational strategy including growth plans and understanding what are the inflection points of growth (when the growth accelerates) and how to address them
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