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Ideas Made to Matter

Platform Strategy

Why B2B platforms struggle to succeed


Business-to-consumer platforms such as Uber, Airbnb, and Amazon have become business success stories and the staples of everyday life. Yet platform models have been less successful in the business-to-business space, with most B2B platforms still in the launch stage (24%) or scale stage (60%).

New research from Capgemini Invent and the MIT Initiative on the Digital Economy found that B2C platform models do not directly translate to the B2B world, and B2B platforms have unique integration requirements. Their goals are also different: B2C platforms typically solve for market failure whereas B2B platforms take aim at coordination failure.

These differences explain why B2B platforms are still an emerging market, according to Dartmouth College professor Geoffrey Parker, PhD ’98, who is a visiting scholar at MIT IDE and helped lead the research project. “In the B2B space, we do not see strong winner-takes-all characteristics yet,” Parker said at the 2023 MIT Platform Strategy Summit. “B2B tends to have a lot of variation, tremendous integration costs, and a complex environment that makes it harder to have the kind of scale that you see in the B2C world.”

Four types of B2B platforms

Businesses cannot fit their B2B efforts into a standardized model because there are four different B2B platform types:

  • Technology enablement platforms, which harness technology building blocks like the Internet of Things or process automation and provide an opportunity to innovate on top of them. One example is Dassault Systèmes’ 3DExperience platform, which is aimed at helping companies design, engineer, and manufacture new products.
  • Intelligent products and services, which enrich existing products and assets with new services and digital functions. For example, the Danfoss AIsense platform lets customers monitor their refrigeration assets anywhere in the field using cellular networks.
  • Data aggregation and collaboration platforms, which collect and aggregate data from multiple sources and provide tools to enable new analytical services and collaboration opportunities. The Siemens SiGreen emissions management tool measures and reduces product-related CO2 emissions across the supply chain.
  • Marketplaces that facilitate supply and demand transactions for goods and services. For example, the European marketplace CheMondis is a user-friendly option for connecting buyers and suppliers of chemicals, with the goal of expanding sourcing networks.

Three dimensions for B2B platform success

Parker and his research colleagues suggested a framework that will help B2B platforms succeed, regardless of type. The framework starts with understanding whether the proposed platform will be transaction-centric or centered around data, which dictates where the value creation opportunities lie. Once that choice is made, three dimensions dictate B2B platform design and, ultimately, success:

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Network: Organizations need to address a number of considerations, including the openness of the platform, whether network effects are desired, and the likely business model, including whether additional revenue is the key metric of success.

Operating model: Companies must consider possible challenges resulting from the need to integrate with existing customer infrastructures. Doing so helps determine whether companies want to take ownership of critical factors like formulating data strategy or hiring people with the specialized skills required to establish a B2B platform.

Go-to-market: Once the pain points are identified and the B2B platform created, there’s still work to be done to show customers the value of using the new platform, especially if its success is tied to data sharing and systems integration. Crucial steps to encourage adoption include taking the time to clarify data ownership and other legal issues and convincing customers that joining the B2B platform doesn’t diminish their market power.

The bottom line is that B2B platform success requires a lot more than an innovative use case and a functional technology base. Players looking to lead in this space can learn from the B2C platform giants, the researchers found, but will still have to navigate fresh waters to address critical integration, data ownership, and economic model complexities.

Key insights from B2B platform research

The primary motivations to launch B2B platforms include creating new sales channels for existing business areas (43%), driving new revenue in existing business areas (40%), and developing new revenue streams and business models (34%).

More than half (55%) of technology platforms are operated by incumbents and only 10% by startups.

More than a third (35%) of platforms aren’t embracing the opportunities of network effects by remaining closed portals.

Integration efforts are by far the biggest challenge: Seventy percent of platforms collaborate with consulting partners on integration issues in order to scale.

Download the research report

For more info Sara Brown Senior News Editor and Writer