Why Platformation is the Future – 3 Lessons from Amazon

For the last several months, we at Sonata have been working on our new digital business transformation approach ‘Platformation.’ At its core, Platformation is about enabling businesses and organizations to adopt technology backed new business models and drive digital transformation.

While we are just in the process of offering this to proactive customers as of now, it’s been quite exciting for us to see the concept resonate when we look at the world around us. One of our US heads was recently mentioning a range of innovations from Amazonin terms of new services, during a discussion. It struck us that Amazon is perhaps the best example of a company that has embraced the concept of platformation in the true sense.

Our Platformation concept talks about four key dimensions that make any platform based business successful - massive scalability, a partner based ecosystem, open standards and data driven intelligence. Amazon has been leveraging opportunities on all these counts, and super-successfully too.

Based on Amazon’s relatively recent moves, here are some themes that seem to be jumping out in terms of the kind of opportunities that Amazon has pursued:

1. Ability to enter a new segment in existing markets to challenge incumbents

Recently, Amazon announced the launch of its handmade gift shop that takes on incumbents including established brands such as Etsy. It also announced the acquisition of Wholefoods a few months ago, marking its focus on the grocery segment. Both of these (and other acquisitions) were firmly on the back of the four dimensions of platformation success that I mentioned earlier.

2. Ability to surround a segment to leverage and perfect a current capability

Amazon’s rock-solid logistics capability has always been a big plus. Leveraging it to target food delivery seems quite prominent in its moves over the last few months - from offering delivery for New Seasons Markets in Seattle to a meal kit trademarked “We do the prep. You be the chef” to partnering with Olo - an online food ordering business. It also introduced voice-ordering support for Amazon Restaurants (note the intersection of two capabilities: voice and logistics).

3. Ability to flatten barriers to purchase in a current segment 

Based on its data-driven intelligence and strong partner eco-system, Amazon launched discounted Prime membership for people on government food assistance. Great move to wean people away from both big box grocers and dollar stores. And then there is the provision for teens to use their parents' Amazon account to buy stuff with a workflow for parental authorization. Such an interesting way to take out a barrier in the customer journey!

All the above moves are anchored not only in Amazons ability to think as a platform business – but they are also clearly enabled by the technology agility that a platform based approach brings. Amazon is also a compelling example of how a company can leverage its technology capabilities to gain value from the larger market, as seen with its offerings such as AWS, AI and Voice enabled solutions.

It is quite fascinating to see how the power of platformation is creating opportunities for Amazon, not just to dominate its existing offerings, but also tailor services that enable it to widen offerings, tap more users and revolutionize the industry.

If you want to explore how your organisation might can get started on a platformation approach, take a look at this video to better understand the platformation framework.