Editing Business model (section)

=== Shift from pipes to platforms ===
[[Sangeet Paul Choudary]] distinguishes between two broad families of business models in an article in [[Wired (magazine)|''Wired'' magazine]].<ref>[[Sangeet Paul Choudary|Choudary, Sangeet Paul]] (2013). [https://www.wired.com/insights/2013/10/why-business-models-fail-pipes-vs-platforms/ "Why Business Models fail: Pipes vs. Platforms"]. ''[[Wired (magazine)|Wired]]''.</ref> Choudary contrasts pipes (linear business models) with platforms (networked business models). In the case of pipes, firms create goods and services, push them out and sell them to customers. Value is produced upstream and consumed downstream. There is a linear flow, much like water flowing through a pipe. Unlike pipes, platforms do not just create and push stuff out. They allow users to create and consume value.

Alex Moazed, founder and CEO of [[Applico]], defines a platform as a business model that creates value by facilitating exchanges between two or more interdependent groups, usually consumers and producers, of a given value.<ref>[https://www.applicoinc.com/blog/what-is-a-platform-business-model/ "What is a Platform"] by Alex Moazed on May 1, 2016</ref> As a result of [[digital transformation]], it is the predominant business model of the 21st century.

In an op-ed on MarketWatch,<ref>[http://www.marketwatch.com/story/what-twitter-knows-that-blackberry-didnt-2013-10-10 "What Twitter knows that Blackberry didn't"], Choudary, Van Alstyne, Parker, ''[[MarketWatch]]''</ref> Choudary, [[Marshall Van Alstyne|Van Alstyne]] and [[Geoffrey G Parker|Parker]] further explain how business models are moving from pipes to platforms, leading to disruption of entire industries.