Digital platforms have disrupted many sectors but have not yet visibly transformed highly regulated industries. This study of Big Tech entry in healthcare and education explores how platforms have begun to enter highly regulated industries systematically and effectively. It presents a four-stage process model of platform entry, which we term as "digital colonization." This involves provision of data infrastructure services to regulated incumbents; data capture in the highly regulated industry; provision of data-driven insights; and design and commercialization of new products and services. The article clarifies platforms' sources of competitive advantage in highly regulated industries and concludes with managerial and policy recommendations.

This is an MIT Sloan Management Review article. An industry platform involves not only one company's technology or service but also an ecosystem of complements to it that are usually produced by a variety of businesses. As a result, becoming a platform leader requires different business and technology strategies than those needed to launch a successful stand-alone product. Companies should decide early on whether they want to pursue a platform or a product strategy. The authors describe two fundamental approaches to building platform leadership, which they call "coring" and "tipping." "Coring" is using a set of techniques to create a platform by making a technology "core" to a particular technological system and market. When pursuing a coring strategy, would-be platform leaders should think about issues such as how to make it easy for third parties to provide add-ons to the technology and how to encourage third-party companies to create complementary innovations. Examples of successful coring include Google Inc. in Internet search and Qualcomm Inc. in wireless technology. However, the authors note, Qualcomm faces opposition from some companies in its business ecosystem. The authors cite EMC Corp.'s WideSky initiative in the early 2000s as an attempt at coring that did not succeed. EMC's competitors were not eager to adopt WideSky as a platform and instead supported an open-standards one managed through an industry group. "Tipping" is the set of activities that helps a company "tip" a market toward its platform rather than some other potential one. Examples of tipping include Linux's growth in the market for Web server operating systems; the Linux case study, the authors point out, demonstrates the power of a coalition of service providers and users to tip a market by supporting a particular platform. Another tipping strategy is for a company to bundle features from an adjacent market into its existing platform; the authors call this "tipping across markets."

This is an MIT Sloan Management Review article. Nowhere is the growing interconnectedness of business more clear than in the information technology industry, where the success of any one company's innovation is dependent on the activities of a complex web of partners. Michael Cusumano of the Sloan School and Annabelle Gawer of INSEAD offer a new framework for understanding what is going on and how to orchestrate the interactions. Building on their in-depth research at Intel, a company that excels in shaping its environment, the authors show how organizations can maximize innovation. First, they say, companies must decide if they are platform leaders (companies that drive industrywide innovation for an evolving system of separately developed pieces), wannabes (companies that want to be platform leaders), or complementors (companies that make ancillary products that expand the platform's market). Managers have two major challenges: coordinating internal units that play one or more of those roles and interacting effectively with outsiders playing the same roles at different times. The authors delineate four levers of platform leadership (including productive ways to work with complementors and techniques for building a supportive internal organization) and offer practical advice to complementors as well. They provide guidelines on when to show your cards to competitors and when to hold them. As the experiences of Intel, Microsoft, Cisco, NTT DoCoMo, and others demonstrate, platform leaders need to have a vision that extends beyond their current business operations and the technical specifications of one product or one component. Complementors have an important role, but it is the platform leaders, and their decisions, that have the most influence over the innovations that complementary producers create--and the future of the industry.