Many see mobility as simply another communication channel or another medium. Others mistakenly view mobility as simply another information technology, much like those that preceded it. They do not see how a mobile device combined with a business platform (elsewhere I have discussed the characteristics and success factors of business platforms) can lead to new business models, entirely new businesses, and new growth options.

Here are five critical elements executives must understand about mobility. Mobility creates:

1. Micro-tasking. How small can a meaningful piece of work be? Is not the right one-word answer immeasurably productive at the right time? What about a single word of encouragement at the right moment. Rehearsing a new set of phrases for a new language as an adult or reviewing multiplication tables during a couple of available minutes as a child can be remarkably effective and efficient. This is the power of micro-tasking and mobile platforms enable this behavior in ways and times not possible before. Multiply this by the millions or perhaps billion moments per day and you have new levels of potential human productivity and significantly revised time budgets. And there are examples: The Extraordinaries harnesses voluntary micro-tasking to help those in need and see Denis Hancock’s post, “The iPhone, growing up digital, and my daughter’s education,” on the way micro-tasking changes the way pre-schoolers learn.
2. New Creativity. Humans are fundamentally asynchronous and associative. We require props to operate on schedule. Most of the time our ideas, inspirations, and breakthroughs seem random or triggered by some event, association with another idea, or situational experience. Because our devices are always with us and allow us immediate access to tools that were formerly attached to a desk or office, mobile platforms enable us to work in a more natural way – asynchronously and associatively. When did you have your last creative idea? Being connected to a global infrastructure, able to access capabilities at a whim, or simply using an appropriate app at the appropriate time enables new levels of creativity.
3. The Growing World of Sensors. Mobile devices loaded with sensors will revolutionize health, safety and security. Sensor technology is growing in its ability to sense the world that is visible to humans as well as the world that is not. When you integrate sensor technology (biosensors, temperature, radiation, personal sonar/radar etc) into mobile devices married to platform infrastructures, every human being becomes a sensing station that can measure environmental pollutions, noise pollution, unhealthy emissions, or dangerous hazards. The implications for health, safety and personal care surpass any in a non-mobile, non-sensor based world.
4. Enhanced experience or augmented reality. Much like the headphones issued at some public museums enhance the one’s understanding of museum artifacts, all facets of daily life can be enhanced by location, context and proximal awareness. Location data can enhance the experience of the local opera, theatrical performance, or visit to a museum. Commercial enterprises, whether serving B2C or B2B marketplaces, have the ability to augment the entire procurement process through mobile platforms. Employees can be augmented with relevant information and tools when serving customers and providing contracted services.
5. Digital Identity and the Rich Digital Self. As remarkable as the human capacity to remember is, it remains limited in many ways. The same is not true of devices that sense and store, activities that mobile platforms do in unique and often helpful ways. If my rich digital self is only based on what I can recall, it is limited. On the other hand, a rich digital self enhanced by streams of unbounded data collected through my mobile platform can create personal value and protect my privacy.

Are these areas where the greatest opportunity awaits? Are there others that I have missed? Are there companies and institutions that seem to really recognize—and leverage accordingly—the power of mobile platforms? Is there a role of for mobile business platforms to meet the special needs of your marketplace? Or will you stand by and let others, competitors and new entrants till the fields of mobility?

Vertical integration was popular in the latter part of the 19^th century and the first half of the 20^th century as a means to assure consistent and predictable supply chains for large-scale enterprises. Andrew Carnegie coined the term in the late 1800s to describe the structure of his company, U.S. Steel, which owned virtually their entire supply and distribution chain — the inputs to production (ore and coal mines), the means of production (steel mills) and the means of product distribution (steamship and railroad lines) – ergo a completely vertically integrated company.

Vertical integration was one of the key inventions used by industrialists to manage the proliferation of transaction costs involved in the orchestration of a scale enterprise. Industrialists at the time did not have the Internet nor did they have well-developed global financial markets or global supply chains. As a consequence these early large producers had to create their own infrastructure and transaction cost deflators through vertical integration. Otherwise the coordination, collaboration, and transaction costs would have overwhelmed their enterprises. As the industrial economy developed, other industries followed suit with other vertically integrated firms in the petroleum, automotive, and newspaper / communications industries. However, as economies matured and suppliers and supply chains became more reliable, the model was largely abandoned in favor of a more distributed model with specialized firms serving segments of the supply chain and many vertically integrated companies divested.

All of that is history: today is different. While vertical integration may be on the rise, entrepreneurs and executives operate with many more tools in their strategic arsenal. Let’s look at two tools that help shed light on the new approach to “going vertical:” the Internet and collaborative business platforms.

1. The Internet. The Internet is now a euphemism for the reality of a highly-interconnected always-on business environment. More to the point, this highly connected world has radically reduced collaboration and transaction costs. When vertical integration is applied in this context, the purchase of an element of the value chain is not used to corner the market or reduce transaction costs, but rather but rather to solidify the company’s position relative to the business ecosystem. So for example, the acquisition of Sun by Oracle, enables Oracle to embed its software in a hardware platform, similar to the iPhone or to the Google Nexus One, that in turn provides more options to work with others and build growth through an interconnected ecosystem (for commentary on the pending handset war between Google and Apple, see Laura Carrillo’s post). With the hardware, Oracle has the potential to involve more partners and grow the business beyond the bounds of a software provider. Consider also that Oracle can also entice other developers to create add-ons (apps) for the Oracle tool. One other benefit: Oracle potentially opens new markets with smaller companies that desire industrial strength databases.
2. Collaborative Business Platforms. In a prior post, I noted an emerging “best practice combination” of a collaborative business platform + a business ecosystem. Google needed to remove itself from Apple’s Board and create their own handset and move into head-to-head competition with Apple, RIM and Nokia. Google has the world’s most powerful and extensible collaborative platform with 100′s of millions of users. But, without a handset (i.e. a mobile device) it cannot differentiate itself nor assure its place in the increasingly mobile marketplace. This inability to garner sustained loyalty of its customers was a key threat to Google’s ecosystem. Without a branded mobile device, Google is just another “app provider.” This vertical integration play allows Google to instantiate its brand in a physical mobile device. Why is this better than instantiating its brand in an iPhone or a Blackberry? Because, the device enables Google to offer a more extensive set of apps and offer functionality that is critically dependent on firmware integration. It also creates new options for Google, who has been largely dependent on the hardware manufactures for it innovation model. Now the Google innovation maven can drive innovation in hardware and firmware.

So the new form of “going vertical” is a merged strategy that will operate in concert with collaborative business platforms and robust business ecosystems. In the case of Oracle, Apple and Google, the addition of hardware assets to their respective business portfolios increases their competitive options, extends their brand, provide a closer connection with their customers, provides a new “sandbox” for innovation, and offers new ways for partners to contribute to their business ecosystems. In the new style of vertical integration, the goal is not to go it alone, but rather to set up the game, so that more partners can participate in the supply chain thereby enhancing Oracle’s, Apple’s and Google’s prognosis for growth.

In 2004, Walt DuLaney and I conducted a longitudinal examination of business growth and cumulative revenue performance.  Among the success factors, we found that companies with powerful business platforms outperformed peers in cumulative revenue growth over a 15 year period.  Our conclusion: business platforms can be a means for organizational renewal, continuous innovation, and sustainable success.

Since then, the sophistication of business platforms and their related ecosystems has expanded and other companies have found success. In the case of Apple, competitors were forced to launch competitive platforms in response (Google’s Android, Symbian Foundation, and RIM) while Apple collected competitive profits.  A growing body of experience indicates that business platforms coupled with an ecosystem of partners can produce superior economic value.  As those partners cooperate and work together they collectively learn, innovate and expand their options for new product features, additional partnerships, and new platform components.  The platform plus the ecosystem becomes a sustainable economic engine for growth and development.

Here are twelve success factors for business platforms based on our work at nGenera Insight.  The first seven are business-related success factors.  The second five are technology-success factors.  The list reflects current understanding and is far from comprehensive.  Nonetheless, it provides a starting point for companies interested in sustainable growth.

BUSINESS SUCCESS FACTORS

1. Leadership, Vision and Purpose – No surprise.  All successful platforms begin with leadership, vision and a clear persistent purpose.  Wal-Mart’s logistic system implemented in 1993, now over 16 years old established the foundation to manage an increasingly complex distribution model, provide a basis to involve partners in category management and drive sustainable efficiencies in the retail industry.  GE’s aircraft engine maintenance platform supported the collection of real-time in-flight engine telemetry data that in turn provided information to customers and ultimately supported concurrent design of their next generation engines.
2. A Vibrant Ecosystem – An ecosystem is an economic community.  An ecosystem thrives when all parties experience mutual economic benefit.  Apple’s iPhone ecosystem has produced 100,000 apps.  In an ecosystem, motivated, persistent participation and contribution is driven by enlightened self-interest which benefits the whole.  The business platform provides the architecture, policies, rules, transactional frameworks, and the information necessary for the ecosystem to operate.
3. Competitive Velocity – How does a company outcompete its rivals and grow?  Move faster.  Salesforce.com revolutionized the CRM business, not only providing a better deal, but also delivering more new functionality per unit time than their competitors like Siebel, Oracle and SAP.  IBM got platform and ecosystem fever with Linux.  By investing in the Linux platform, its world-wide development community, and its related ecosystem, IBM was able to grow a new operating system faster than it could do by itself and enlist more developers than it could possibly afford.
4. Extensible Business Architecture — Business platforms must be conceived, from the outset, as an unfinished masterpiece.  Extensibility means learning.  The difference between an applications project and a business platform is that a business platform is never finished.  When a platform is finished it is at the end of its life.  Learning creates new directions and options.  New options create new opportunities for growth, alternative futures and other avenues for competitive action.  Amazon’s original on-line retail platform evolved into other businesses such as Marketplace, Web Services, and most recently cloud computing with their Elastic Compute Cloud offering.
5. Transparency — Transparency fosters beneficial contagion and excitement among the ecosystem members and interested parties.  An examination of any successful business platform reveals alternative futures.  Alternative future means options.  Options can be valued and hence the investment community can estimate the expected value of such potential futures and model a resulting perpetuity calculation.  Transparency attracts new partners and helps existing ecosystem partners to co-create the future of business platform.  As momentum builds, transparency also strikes fear in the competitors.
6. Policies and Rules — Policies and rules are essential otherwise chaos reigns and the platform and related ecosystem dies.  The business platform becomes the repository and the enforcer of policies and rules.  The business platform also communicates changes in rules. Consider the rules propagated and enforced in the iPhone ecosystem, or the Android ecosystem through the hardware architecture, operating system architecture, the business architecture and the rules and policies for these respective ecosystems.
7. Analytics — Business platforms generate prodigious amount of data continuously.  One of the most powerful advantages of a business platform stems from the collection and analysis of strategic, situational, transactional and detailed usage data.  As the data is collected powerful visualization and analytic tools can provide a combination of real-time and longitudinal analyses.  The closed-loop nature of the data collection process inherent in the business platform enable the platform leaders and ecosystem partners to run experiments, continuously improve products and rapidly evaluate potential business strategies and directions.  It is very difficult to duplicate this type of analytic capability in a non-platform business model.

TECHNOLOGY SUCCESS FACTORS

1. Open technology architecture – Open architectures provide the basis for future options and business platform extensibility.  Open means that other technological standards can interface with the business platform, even technologies that have yet to be invented.  Remember, business value is ultimately determined by the market’s assessment of future viability and the promise of future value.  If the business platform is based only on a few proprietary or close technology architectures, future business options will be limited.
2. Component based – “assembly required.” Most business platforms consist of a collection of open, custom and proprietary application engines.  From a technological perspective, it is cheaper and more effective for a platform to be assembled from the evolving marketplace of technological components.  A component based approach in an open source, open architecture and cloud computing environment also means that companies can enter the business platform space for less cost and minimal proprietary software development.
3. Scalable – Google has scaled from it beginnings.  At the outset the Googleplex consisted of hundreds of servers.  Today the Googleplex is estimated to consist of over a million servers.  Google’s business platform and technology platform was designed from the outset to scale.
4. Sensing capability – Sensors in products (e.g. aircraft engines, cell phones, elevators) and sensing capabilities in key aspect of the business platform’s infrastructure provides a level of detailed data not possible in standard business models.  Almost all successful business platforms, whether product based, or service-based have a sophisticated network of sensors that collects real-time data.
5. Location agnostic – Business platforms operate to deliver their product or services to the customer at the right place, at the right time in the best possible way.  Successful business platforms eliminate the constraint of place.  Dion Hinchcliffe notes in a recent post that the popularity of mobile apps is transforming the Internet and replacing the web because they provide the right type of interaction for the user at the right time. Whether it is a mobile app or another delivery vehicle, smart business platforms live by being location agnostic.

Taken together these twelve factors provide a basis to begin a quest for sustainable growth.  What is your view?  Are business platforms a new basis for business growth and success?  Will all companies need to be a part of a platform or a platform leader?

Do you have plans for a business platform in your future?

Each category around the “wheel” represents a different type of conversation. By implication, each type of conversation serves a distinctive business purpose. Solis and JESS3 did the hard work. For each type of conversation they mapped the appropriate collections of social media tools. According to the “Prism”, Facebook and Linked-in serve different types of conversations. Facebook, MySpace and Friendster are Social Networks. Linked-In, Plaxo, Ning and others are Interest and Curated Networks. Most of us lump all of them into the same category.

As one moves around the wheel, other helpful distinctions become apparent. Forums, Reviews and Ratings (e.g. yelp, Epinions, Amazon), SMS/Voice, Lifestreams, Twitter Ecosystems, Micromedia (e.g. Twitter, Yammer), Blog Communities, Blog Platforms, Blogs/Conversations, Crowdsourced Content, etc serve different objectives and different types of conversations. Each conversation has a different collection of social media tools. One readily gets the idea. It immediately makes sense. Each of the twenty-four different types of conversation requires a different type of social media.

The taxonomy also marks a key milestone in the evolution of social media. A key indicator of the maturity of a discipline is the ability to create a meaningful typology. While the creators developed the Conversation Prism from a marketing perspective, the taxonomy applies to many other disciplines and contexts.

Here are some thoughts on how to use The Conversation Prism:

Marketing. Everyone is interested in getting more customer mindshare, establishing meaningful conversations and developing hot communities around products. But how? Distinguishing among the different types of conversations and tools helps to focus effort. Sean Moffitt, one of the key thought leaders in nGenera’s Marketing 2.0 program notes that Facebook, Twitter, YouTube and Flikr are key conversation forums, but one has to also match the conversation to the marketing objectives and the product or service. The Conversation Prism provides a way to rethink which types of conversation reach the best audience and achieve the right message and customer experience.

Enterprise Strategy. I’ve lost count of the many conversation with executives who simply dismiss social media as an irrelevant pastime or an “Extra-curricular” activity. Many think Facebook and MySpace are the sum total of social media when they are not. And often, social media is dismissed out of hand, to the detriment of an organization’s strategy, because everything is lumped together. The Conversation Prism cuts through the clutter and buzz and assigns the role and place of various types of social media. Use this taxonomy liberally for internal business strategy discussions, social media strategy, and most importantly, our soapbox – collaborative enterprise management.

Finance. Yes, finance. What does social media have to do with finance? Take a look at the wheel again. Armed with the taxonomy, the CFO or the controller for that matter can begin to think about where various tools might add value in conveying and explaining financial concepts, policies and performance. For example, quick relay of confidential financial information to small group would use a different set of social media than information disseminated to institutional investors, or retail investors. What type of conversation provides the best result for each constituency?

Information Technology. Increasingly, various groups expect the IT organization to recommend the right social media tool for the right problem. On what basis should these decisions be made? The Conversation Prism enables IT professional to understand the landscape and make recommendations based on desired business outcomes, not simply technical features. Bandwidth, storage, API’s, architectures, apps, widgets, gadgets and price vary by social media type. Some tools require internal infrastructure, other operate as SaaS in the Cloud.

Human Resources. Conversations and social media involve people. Duh. However, employees should understand appropriate use. Often, social media gets a bad name, or experiments fail, because the wrong tool is applied to the wrong circumstance. Ever consider using a text message for a performance review. Some have. Use “the wheel” to teach appropriate use.

The Conversation Prism provides a welcome tool as social media moves into its second stage of development. It surveys and maps the social media landscape. Perhaps other destinations will be added. However, in the mean time, The Conversation Prism, a simple framework, provides self-evident guidance to those who wish to profit from the social media revolution.

An HR executive at a major manufacturer confided to me: “Last weekend, I hacked my iPhone so I could use it on our network because it is not an authorized device at our company.” When I asked how he learned to hack his iPhone, he said he found an Internet chat group of like-minded iPhone owners and readily found the right settings for his particular network.

A Managing Director in Singapore for a US-based company told me that his PC is virtually useless in Asia “Recently I was in Hong Kong stranded in traffic,” he said, “and I watched another executive, probably a competitor, thumbing his way through phone calls, emails, and other business on a tiny keyboard and tiny screen. Meanwhile I sat in the back seat of my limo twiddling my thumbs looking at my un-tethered laptop, bemoaning the fact that our company does not support an Asian mobile solution.”

Are these isolated examples? No. Are they real? Yes. Are these your typical Gen Y or Net Generation employees? No, all are senior executives each with over 20 years of experience. Why would any company want to stifle the productivity of its high paid executives?

The anecdotes come from the fieldwork of a major study of employee computing released by nGenera Corporation earlier this week. A group of colleagues and I spent more than a year conducting the research, which was sponsored by a blue-ribbon syndicate of global corporations that are members of our nGenera Insight programs. We interviewed individuals at top vendors, global companies, and major government agencies to understand the best way to unleash employee creativity, support new forms of collaboration, and drive new levels of productivity.

Let me review just a few of the findings from the study. (You can download a summary of the report here.)

• Some companies get it, some don’t. Most employees come to work to be productive. Many want to be creative. And, increasingly, more and more want to collaborate. Collaboration in the workplace requires open data, open apps, and open minds. Does this mean a workplace free-for-all? No. In fact, companies that “get it” categorize their data, specify where open apps can be used, and put in place infrastructure that naturally implements policies and controls to guide “creative and open minds.” Those that don’t get it find themselves outmaneuvered when it comes to looking for new talent and forced to reinvent the wheel every time they need to partner. Competitors who get the need for collaboration will continually extend and improve their product and service features faster and at a lower cost.
• Collaboration requires a collaborative services infrastructure – nGenera calls it a Collaboration Server. Who has better information about your employees, your HR systems or Facebook and Linked-In? With over 300 million profiles on Facebook, it’s very likely that Facebook profile information might be useful to download into your internal systems. Would such information benefit your employees? Would profile information benefit your sales reps when they deal with customers or prospects? Yes and yes. Organizations need a “master hub” for collaboration. This “master hub” seamlessly interconnects proprietary systems, structured data and unstructured data, internal search with external search, open applications, and external platforms (e.g., Google, Facebook, LinkedIn, Plaxo, WebEx, Salesforce.com, etc.), so employees have what they need. As nGenera puts it, the Collaboration Server integrates leading consumer platforms, user management and security, policy and compliance management, and metadata repositories.
• Share data, information, and knowledge to create value, but categorize first. Companies need to segment data and knowledge into a minimum of three categories: 1) data that is open; 2) data that can be shared; and 3) data that is closed (locked up). Why? Employees need to know what data is in which category. Open data can be freely shared with a great deal of discretion and often this leads to new ideas and innovation. Shared data, the realm of joint ventures, product design, etc., must be controlled and selectively (usually under contracts and NDAs) shared. Data such as formulas, designs, customer data, etc., need to be looked up and sometimes taken completely off the grid for competitive and legal reasons. In our research, thought, we found that few companies have taken the time to make even these simple distinctions. It is no wonder data security and privacy are compromised.
• IT cannot do everything, nor should they. Yes, technology is a major source of innovation. And yes, it’s impossible to have any business discussion these days without having a technology discussion. But that does not mean that IT must do everything. Companies that completely lock down their IT tools, technologies, and infrastructure, by definition, must depend on IT professionals to do everything. Today, with computer literacy rates at all-time highs, employees can do much on their own, if given the right tools and the right policy frameworks. In fact once the creativity is unleashed, few companies can anticipate all the innovation that ensues. Locked-down companies deprive themselves of significant productivity and innovation in their workforce. Smart CIOs are revamping their infrastructure and policies to support self-service IT models and unleash enterprise-wide creativity on a massive and measurable scale.
• Some employees will manage their own computing just for the privilege to be more creative and self-reliant. One of our earliest findings in this research program was that every organization has a segment of employees that want to be self-sufficient. They will even buy their own technology and provide their own support if the organization will give them greater freedom over their technological choices. A number of companies now provide this option to employees, such as by providing a stipend for purchases. Employees buy what they can with the stipend (usually from an approved but diverse list), and then are welcome to make additional purchases on their own nickel to augment their “computing environment.” At BP, one of the largest global energy companies, such a program reduced support costs and increased employee morale. Of course, BP also put in place the policies that defined the rules of the road, instituted a computer “driver’s license,” had the participating employees sign appropriate use contracts, and engineered a thin client infrastructure to securely link self-reliant employees to sensitive internal systems. The moral of the story: Do whatever you can to harness this class of employees.

We uncovered several other key findings about how companies are supporting and nurturing employee freedom, creativity, and self-reliance in pursuit of a collaborative workplace. Some companies (see Dion Hinchcliffe on open business data and open business methods) are on their way to the new model of employee productivity and so are some leading government agencies (see data.gov and apps.gov). Every organization has a choice and the consequences of the wrong choice may be dramatic and immediate: Will they pursue new policies, technologies, and practices that unleash the creativity, innovation, and energy of their workforces, or will they continue to rely on command and control and in the process stymie the next generation of enterprise innovation and productivity gains?

This week I’ve had the pleasure of attending a very well executed Government 2.0 Summit held in Washington D.C. I was pleasantly surprised to find many ‘kindred spirits’ at the conference and additional examples that signal the rise New Public-Private Ecosystem.

Tim O’Reilly, whose firm conducted the conference, opened with a keynote that argued that the twin developments of open data and the power of shared platforms had the capacity to revolutionize government. He noted that platforms such as Google, eBay, Amazon, Craigslist and Apple’s iPhone App Store were successful because they harnessed user contributions to create enormous collective value – value way beyond what they could do alone. He then went on to argue that this same logic could be applied to the role of government services. He argued that the government needed to begin to think of itself as a platform. He pointed to how the investments made by the U.S. Department of Defense in globally positioned satellites (GPS) spurred others to develop applications, products and services, and spawned an entire industry.

Over 40 noteworthy examples of the government as a platform were seen at the conference. Here are some of the highlights:

• NASA’s Spacebook – “Lessons Learned from NASA’s Enterprise Social Network,” (Emma Antunes) that supports internal and external cross-fertilization of ideas and innovation at the juncture of different scientific disciplines.
• TSA’s IdeaFactory – “Transportation Security Administration’s IdeaFactory: Social Media and Securing America,” (Tina Cariola) that harnesses front line TSA employee’s ideas for innovation and continuous improvement at the TSA.
• Citizen budget input in Santa Cruz – “City of Santa Cruz Offers Blueprint for Solving CA Budget Crisis with Social Media,” (Peter Koht) was used to deal with radical budget cuts in municipal services and reallocate resources.
• State of Utah – “Utah Department of Public Safety Media Portal,” (Jeff Nigbur) – a shared portal that coordinates safety information, enables collaboration with private media organizations, and saves money for the State of Utah.
• Data and Platforms – “GeoEnabling Gov 2.0″ (Jack Dangermond) – GIS wizard, pioneer and founder of ESRI, illustrated how open data sources with powerful GIS tools and government platforms can enable “on-the-fly” mashups to support situational awareness and crisis situations in realtime, like the recent Station Wildfire in Los Angeles.

One of my favorite sessions was a panel on “Creating an Effective Platform,” with John Markoff (New York Times), Vinton Cerf (Google), Jack Dorsey (Twitter) and Tim Sparapani (Facebook). Markoff started off the session by distinguishing between “platforms of liberation,” and “platforms of control,” suggesting that platforms of liberation lead to creativity and innovation whereas platforms of control tend to limit creativity, stifle innovation and by implication in the worst case, be used to enslave or oppress. All the panel members reiterated that effective platforms (aka liberating platforms) have the ability to enlist broad voluntary participation. Cerf noted that a combination of design requirements from the Department of Defense for connectivity among all of their assets mixed with the values of the academic community fostered an open, cooperative architecture for the Internet. Dorsey, the creator of Twitter, noted that the concept of a utility, like the electricity grid or the Internet was his inspiration for Twitter – a reliable platform that can be used by others to build new capabilities. Sparapani noted that while Facebook has over 250 million members, it is also important to note that Facebook’s architecture also enlists and supports over a million independent developers that add value to the Facebook platform every day.

At the highest levels of the Obama administration the United States, with the appointments of Vivek Kundra as the first CIO of the United States and Aneesh Chopra as the U.S. CTO, is developing policy frameworks (e.g. The Open Government Directive) and new tools (e.g. data.gov and The Federal IT Dashboard) that will support collaborative platforms and open data. Both Mr. Kundra (see here) and Mr. Chopra (see here) provided additional information on these efforts at the conference.

So the story continues and I believe the mindshare is growing. Policy makers, practitioners and thought leaders are rising to the idea that a globally interconnected world affords new opportunities to reshape government. Open data unleashes the creative potential of citizens and private enterprise to create new services, software applications, and insights that the government cannot do by itself. The shear numbers tell the story. Millions of citizens and hundreds of thousands of companies of all sizes uniting to independently create value and enhance the common good. The proprietary ownership or licensing of that data to a few (Gov 1.0) seriously limits the power of the New Public Private Ecosystem. Now not all government data should be open and privacy must be safeguarded to be sure. Nonetheless, the vast proportion of government data falls under the non-private category.

The same logic applies to collaborative platforms. In contrast to open data, however, collaborative platforms require investment and development. As we further explore the New Public-Private Ecosystem, policy makers, entrepreneurs, and the market will need to work out where it is best for the public sector to invest and where the private sector should invest. The dividing line is not clear. Only 10 years ago, one would not expect Twitter to emerge from the private sector; utilities were the province of governments. But the good news is that democracies, republics, and open societies have the natural open forums to debate and collaborate to find the answer. Closed societies force themselves into a comparative disadvantage on the world scene – they only harness a small proportion of their collective creative spirit. We are not likely to see the New Public-Private Ecosystems and its benefits emerge in those nations.

This is a new age of collaboration and the train has left the station. Distinctions between less government or more government are the realm of old categories and thinking. Government may well get smaller – a happy thought for citizens. Howeverit will get smaller, not through fewer services, but rather through the power of collaborative platforms, open data, and the New Public-Private Ecosystem, and in the final analysis, private citizens will have more services and a play a greater role in the development and delivery of those services. Everyone can win: the dedicated public servant, the engaged citizen, the investor, and the company.

Envision a world where networks of public institutions and private companies seamlessly work together.  In this next generation world, each member of an ecosystem divides their collective resources and labor according to those functions and capabilities best performed within each respective entity.   The ecosystem has a unique division of labor, clear decision rights, and defined roles across tens to thousands of individual organizations. Such new levels of collaboration arise from the economic and technological capabilities available in a massively internetworked planet.

True, public-private partnerships are not new – in the 20^th century we saw many in areas ranging from space exploration to entrepreneurial innovation.  However, the combination of online platforms and networked ecosystems transforms their underlying form and function. Public-Private Ecosystems fortified with powerful online platforms can drive entirely new ways to involve citizens, divide work activities among traditionally private and public enterprises and harness talent in new ways for the common good.  Here are three examples that point to the potential and key elements:

• Crossroads Bank for Social Security, Belguim.  Maryantonett Flumian, a fellow colleague and frequent contributor to our Government 2.0 Insight program, tells the story of the Crossroads Bank for Social Security (CBSS) – a platform that links 3,000 private and public sector agencies to cooperatively deliver services for the citizens of Belgium.  The “bank” itself holds no information – the information of the citizens and the services delivered travel among the right agencies across the right public, private and jurisdictional boundaries, at the right time.  To quote Flumian, “The work of the CBSS has resulted in dramatic reductions in forms, decreased burden on employers, and streamlined access to better social services. It is estimated that since 2002 the system has saved companies 1.7 billion Euros a year in administrative costs.”
• City of Frieburg, Germany.  One of our student interns, Alex Marshall, studied a software platform developed by the local government of the City of Freiburg and TuTech Innovation (see post).  By architecting a web-accessible system of “budget sliders,” Freiburg enabled citizens (1,291 participants) to increase or decrease the spending levels of 22 proposed budget line items. The city gained new insight into the desires of its inhabitants and in the final analysis readjusted some of its spending priorities.  Similar examples can now be seen in Hamburg, Germany and Belo Horizonte, Brazil.
• Apps for Democracy, United States. Vivek Kundra, the first Chief Information Officer (CIO) for United States Federal Government, came to Barack Obama’s attention through his innovative approach to leveraging government databases as Chief Technology Officer for the District of Columbia. Kundra found that by taking existing government databases and adding common software interfaces, he could generate a free-form public-private platform and ecosystem of the District of Columbia staff, external software professionals, private firms, and creative citizens.  In contrast to the prior examples, the data grounded the effort, the platform was mashed-up from a collection of open source software, and an ecosystem formed through the independent activities of interested parties to find new ways to use the data for the public good – ways that the District of Columbia neither had the time or resources to find by themselves.  Now Kundra is applying the same logic to the U.S. Federal Government through a series of open data initiatives (see http://www.data.gov).

So what have we learned and what are the implications for citizens, governments and public policy?

1. Focus on differential advantage.  Anyone who manages an organization knows that appropriate division of labor is often a prerequisite for success. We need to apply the same thinking across enterprises and institutions in this new massively networked world.  Let’s extend the lesson of Belgium’s CBSS to link capabilities regardless of jurisdiction utilizing the strengths of each organization.  In a networked world why should we duplicate efforts across enterprises or start new enterprises when enterprises work together?  Such a mindset goes a long way to unbundling our preconceptions of who should do what and taps into a latent stream of broad societal efficiencies. What latent capabilities exist that can be linked when we reexamine particular types of work that must be done for the public good across the traditional divide of public and private entities?
2. Consummate network externalities.  Let’s not be shy.  In most developed nations we have a surplus of 20^th and sometimes 21^st century capabilities locked down and isolated in balkanized 18^th century structures.  As the world has become networked so too we need to re-examine how we have created divisions of labor among what we call public and private.  Sure there are legal and jurisdictional boundaries that protect the common good and regulate political and economic power.  However, these new examples indicate that not all divisions are necessary for good democracy or regulatory imperatives.
3. Information does not need to be consolidated in one place to do good. As seen in both the CBSS and the District of Columbia examples, in the networked world a free flow of information can enable previously siloed organizations to collaborate and revise their division of labor.  The result: potential new efficiencies for society and economic benefits from a better use of assets and capabilities.

While many details need to be worked out in the new public-private ecosystem, including privacy, legal, governance and regulatory factors, the emergence of these new structures, processes and participants could usher in a more effective set of arrangements for the common good.

Apple understands that business platforms fundamentally change the rules of competition and accelerate cumulative business performance. Competitive business platforms drive and nurture the latest business innovations – mass collaboration, social networking, community formation, ecosystems, global cooperation, prosumerism, community branding, transparency, options portfolios and real time analytics to mention a few. And they also do the same for “old-fashioned” ones as well – things like business process management, customer intimacy, and supply chain management. We’ve studied business platforms extensively at nGenera Insight and Apple is not alone. But Apple has taken the approach and out-executed almost everyone else on the planet.

While many see Apple as enslaved to secrecy, unresponsive to external input, and obsessed with product control, the company has put many of those behaviors behind them. In fact, Apple is writing the book on 21^st Century style collaborative business models and continuous business strategy.Nokia and RIM became Apple students in the last 12 months – both have adopted a business platform approach. Ironically, RIM had the makings of a business platform long before Apple, but did not really exploit it. AT&T is being schooled again about business platforms as it copes with Apple’s latest generation iPhone 3Gs release (it seems that AT&T’s network can’t keep up with new iPhone features such as tethering and MMS messaging). Verizon is playing catch-up because it only recently saw the light – but rumors suggest it may have a deal with Apple on the “iTablet.” Meanwhile, it appears that Motorola still doesn’t get it.

But Motorola’s not alone. Almost 10 years after Apple’s launch of the iPod, iTunes and the iTunes Store, most corporations either stand in awe of Apple’s accomplishments, or see Apple’s approach as completely irrelevant to their businesses. They’re mistaken. These developments signal a new formula for business success that extends beyond the glitzy world of Hollywood or the high tech software and telecommunications industries. More importantly, leading firms in other industries have used the recession to put plans in place.

Let’s take a look at what the iPod, iTunes, the iPhone and the App Store really mean for business. A bit of history first. Apple Inc. launched iTunes, the now famous digital music application, on January 9, 2001 for the Macintosh computer. A little over 9 months later Apple launched the 1^st Generation iPod on October 23, 2001. About 2 years later Apple launched the iTunes Store on April 28, 2003. The iPhone was released 4 years later on June 29, 2007 after the runaway success of the iPod-iTunes-iTunes Store combo that revolutionized the retail music industry. The iPhone App Store was launched on July 8, 2008 with 500 applications, 125 of which were free. Today the iTunes Store is a digital media store encompassing all forms of digital media including music, games, software applications, podcasts, and a growing collection of video assets.

In the process, Apple sold in excess of 200 Million iPod units and over 40 Million iPhones. Apple sold more than 1 Million of the new 3Gs iPhones in the first weekend of its introduction in July. The iTunes store has sold 8 billion songs since inception, and is the undisputed leader in digital music sales. Moreover, Apple revealed in April of 2009 that the App Store introduced in July of 2008 had already hit the 1 Billion mark in downloaded applications. By late July of 2009, Apple reported that its extended community of iPhone developers, which split revenue with Apple on a 70/30 basis had produced over 65,000 applications that were approved by Apple and available for download on the App Store. At the end of 2001, Apple’s annual revenues were approximately $5.3 Billion USD. At the end of 2008, annual revenues had grown to approximately $32.4 Billion.

Here’s what Apple has learned and what I believe all companies should heed – the undeniable superiority of the 21^st Century business model:

1. Products must become business platforms that grow through collaboration. The iPhone, the iTouch, and iPod are not music players and multimedia phone – ergo products – so much as they are business platforms. A business platform is the totality of the physical product (e.g. iPhone), the embedded software inside the product (iPhone OS), the collaborative platform (iTunes+App Store), the economic community (the iPhone ecosystem which includes AT&T and other wireless providers, Google, Yahoo, the iPhone developers, related iPhone social networks and communities, and the iPhone global industrial complex (core manufacturers – e.g. Intel, accessory providers etc.).
2. Business platforms create superb externalities and a powerful ecosystem. Business platforms create a sort of lingua franca for all of the participants. In other words the business platform contains a common understanding for business transactions, business rules, business communication, technical specifications, interface standards and requirements. As a consequence transaction costs are minimized for all parties and efficiency results. For example, embedded in the iPhone OS, the iPhone SDK (systems development kit), the App Store and the iTunes store are the complete “rules of the road” for operating in the iPhone ecosystem. The result is a cumulative transparency that enables tens of thousands of participants to collaborate asynchronously and independently. In so doing they create economic value, a continuous wellspring of innovation and mutually extend the overall value of the economic community. They also rapidly extend the capabilities of Apple’s core product way beyond what Apple could ever do so on its own.
3. Business platforms create a learning platform that spawns communities of interest and communities of practice. A multitude of social networks and communities surrounding Apple’s iPhone business platform. Numerous Apple-sponsored and independent communities trade ideas, IP and practices daily and cajole and attempt to predict Apple’s next move.
4. Business platforms generate untold business analytics for the platform’s owner and participants. Because all elements of the business platform are networked, the platform generates a prodigious amount of valuable information about the product, the ecosystem, the participants, and the customers in realtime. Apple knows the score for each element of the platform and uses the information to fix, improve, extend and enhance the product and ultimately delight the customer.
5. Business platforms generate a superior portfolio of strategic options. The generation and management of options remains at the core of business strategy. Business growth depends upon the portfolio of business options available to the executive team. Traditional business models depend upon internal knowledge and internal innovation processes to generate new product ideas, new ventures and appropriate acquisition strategies for growth. Such traditional processes are anemic when compared to an enterprise armed with a 21^st Century collaborative business platform. Who has more options for the future, Apple or Motorola? Who has a richer options portfolio on potential products and services? Who has better information by which to value those options? For an investor looking to make an investment, which company has greater future value? The company with a business platform or a company with a 20^th Century, product-focused, internally driven innovation engine. I know my pick.

In subsequent blogs I will examine what we’ve learned about managing business platforms and dealing with negative and positional externalities, what traditional firms must do to change and embrace the rise of business platforms, the power of business platforms in Collaborative Enterprise Management, and the role that business platforms play in continuous business strategy.

To Apple I say: mega kudos, keep up the good work – it’s good for the economy and good for business. Thanks for letting the cat out of the bag.