STRATEGY How Companies Become Platform Leaders Under the right circumstances, * companies of any size can grow to become platform leaders. And particular business and technology decisions can help platform-leader wannabes achieve their goals. Annabelle Gawer and Michael A.Cusumano n recent years, many high-technology industries, ranging from "smart" cell phones to social networking Web sites such as Facebook Inc. and MySpace.com, have become platform battlegrounds. These markets require distinctive competitive strategies because the products are parts of systems that combine core components made by one company with complements usually made by a variety of companies. If a platform leader emerges and works with the companies supplying complementary products and services, they can together form an "ecosystem" of innovation that can greatly increase the value of their innovations as more users adopt the platform and its complements. However, companies often fail to turn their products into industry platforms. Our previous research focused on understanding the levers or strategic mechanisms that existing platform leaders use to maintain their positions. (See "About the Research," p. 31.) This article focuses on the special problems of companies that want to become platform leaders - "platform-leader wannabes:' Many companies do not succeed in becoming platform leaders because their strategies fail to tackle adequately both the technology and business aspects of platform leadership. The technological challenges involve designing the right architecture, designing the right interfaces/connectors and disclosing intellectual property selectively, in order to facilitate third-parties' provision of complements. The business challenges include either making key complements or introducing incentives for third-party companies to create the complementary innovations necessary to build market momentum and defeat competing platforms. Our strategic recommendations consist of two basic approaches. (See "Strategic Options for Platform-Leader Wannabes," p. 32.) One strategy, "coring;' addresses the challenges of creating a new platform where one has not existed before. The second strategy, "tipping," tackles the problem of how to win platform wars by building market momentum.' The Platform Vs. Product Strategy Choice There is an important difference between a product and an industry platform. Put simply, a product is largely proprietary and under one company's control, whereas an industry platform is a foundation technology or service that is essential for a broader, interdependent ecosystem of businesses. The platform requires complementary innovations to be useful, and vice versa. An industry platform, therefore, is no longer under the full control of the originator, even though it may contain certain proprietary elements. Managers sometimes underestimate the importance of deciding early on between pursuing a product or a platform strategy. This decision matters because the industry conditions Annabelle Gaweris lecturerin strategyand innovationat Tanaka Business School, Imperial College London. MichaelA. Cusumano is the Sloan Management Review DistinguishedProfessorof Management and EngineeringSystems at the MIT Sloan School of Management.Comment on this article or contactthe authors at smrfeedback@mit.edu. 28 MIT SLOAN MANAGEMENT REVIEW WINTER 2008 SLOANREVIEW.MIT.EDU and business choices that favor a platform can differ from those that favor a product - creating differing incentives for owners of industry platforms than for companies that assemble proprietary products. In particular, owners of industry platforms benefit from lots of innovation in complementary products as well as from competition at the overall system level that would bring its price down. Thus, Microsoft Corp. benefits from competition among personal computer manufacturers that use its operating system, but they, in contrast, benefit when customers perceive their products as unique and therefore do not want cutthroat competition at the product or system level at which they compete. PC makers would probably rather see Microsoft face tough competition in computer operating systems so that they could bargain for better Hlustration: BlissItheispot.corm Phil prices on the operating system they will load onto their PCs. Failure to decide early on between a product or platform strategy can result in dangerous strategic confusion. Achieving platform status requires specific decisions that govern technology evolution, product and system design and business relationships within the ecosystem - and they are different decisions than those made when pursuing a product strategy. Another common mistake is that managers can simply overlook the platform potential of their products. For example, Apple Inc.'s Macintosh personal computer was the leading product when it was introduced but didn't become the dominant personal computing platform, primarily because Apple did not open the Mac's architecture and software to third-party complementors and licensees. While the benefits of becoming a platform seem clear, not every market has to have a platform leader. In some large markets, such as video game consoles or Web portals, several platform companies can persist without one dear winner. For that scenario to occur, it seems important that the market contain enough room for differentiation in user needs so that multiple companies can persist in specific niches or segments, particularly if it is not too difficult for users to switch among more than one platform.2 Nor can every product become a platform.3 To have platform potential, however, research suggests that a product (or a technology or service) must satisfy two prerequisite conditions: (1) It should perform at least one essential function within what can be described as a "system of use" or solve an essential technological problem within an industry, and (2) it should be easy to connect to or to build upon to expand the system of use as well as to allow new and even unintended end-uses. It is possible to test for these conditions. For the first, one can evaluate whether the overall system could function without the particular product or technology. If the system cannot operate, then the product does indeed perform an essential function. For example, Microsoft's Windows operating system and Intel's microprocessor were both essential platform components of the original IBM and IBM-compatible personal computers. For the second condition, the challenge is to test whether a product or a WINTER 2008 MIT SLOAN MANAGEMENT REVIEW 29 STRATEGY technology is easy to connect to or to build upon. One way to do this is to see whether external companies have succeeded in developing complementary and interoperable products, or at least have started to do so. Unless these two conditions are fulfilled, the accomplish this, but looking at successful and unsuccessful companies can provide ideas on what to do and what not to do. strategic game of platforms cannot begin. But they are far from sufficient to win the platform game. Google: Coring in Internet Search Google Inc. is a particularly wellknown and clear example of successful coring in Internet search technology. The company, founded in 1998, started off as a sim- Our research explores the issue of platform leadership in information technology industries such as computing and ple search engine company and went on to establish its proprietary search technology as a foundation for navigating the Internet. telecommunications because these industries not only have visible demarcations between platforms and complements but also First, Google improved upon existing solutions to an essential technical problem: how to find anything in the maze of the Internet, with millions of Web sites, documents and other online content. Google's improved search function became an essential technology for fully using the Internet. Second, Google distrib- have strong "network effects" between the two, leading to clear interdependencies. However, companies can pursue platform strategies in many different industries. For example, new energy sources, such as hydrogen fuel cells or hybrid gasoline-electric systems, may become platforms for powering a variety of devices made by different companies. Banks, credit card companies and Internet services companies all are competing to develop a platform for micropayments and other specialized financial services. In biology, the human genome database has become a platform for many companies and research laboratories. Pharmaceutical and chemical manufacturers develop certain compounds that can become the basis for a variety of drugs or other products made by themselves and many partner companies. Coring: How to Create a New Industry Platform "Coring" is the set of activities a company can use to identify or design an element (a technology, a product or a service) and make this element fundamental to a technological system as well uted its technology to Web site developers and users as an embedded toolbar, making it easy to connect to and to develop upon. It also allowed different uses, such as combining a search with different kinds of information or graphics. But where Google really won the platform leadership battle for Internet search was on the business side. Google solved a fundamental problem, which was that it was not initially clear how companies could make money from using the Internet. Google found a way to link focused advertising to user searches. Ads appear only along with specific searches, meaning that users should have some interest in the advertisers. In effect, Google revolutionized the advertising business by rearchitecting the relationships between advertisers and Internet users. Today, Google's market value is over $200 billion, many times that of the largest as to a market. An element or component of a system is "core" when it resolves technical problems affecting a large proportion of other parts of the system. Coming up with platform-like tech- advertising agencies. Of course, Google had competition. In the mid-1990s, Digital Equipment Corp. created a powerful search engine tool for the Internet, AltaVista; several other companies created power- nologies may well be easier than coming up with business strategies that encourage partners and customers to adopt a par- ful search engines, such as Yahoo! and Inktomi. But Google proved to be much more effective than its competitors at the ticular technology. Platforms open the overall system in which they operate to new usage possibilities. These different uses are essential to the growth of an installed base, but one question arises: Who will develop these new uses? How can platform-leader wannabes suc- business aspect of market coring, even though Internet search and Web portals are a broad enough market that more than one company is likely to persist. As of April 2007, Google accounted for about 55% of Web searches, compared to about 22% for Yahoo! and 9% for MSN/Windows Live Search, according to a cessfully encourage other companies to join their ecosystems and develop essential complementary applications? Answering that Netratings Inc. survey.4 Google continues to extend and promote its platform. In June 2007, Google held its first developers' conference, with 1,000 programmers in attendance and another 5,000 at 10 other locations around the world. The agenda included presentations on question is one of the two essential business aspects of coring. The platform leader must create economic incentives for ecosystem members to invest in creating complementary innovations and to keep doing so over time. In addition, platform-leader wannabes need to protect their ability to profit financially from their innovations, just as any innovator company should. The balancing act - protecting one's sources of profit while enabling complementors to make an adequate profit and protect their own proprietary knowledge - is perhaps the greatest challenge to platform leadership. There is no simple framework for how to 30 MIT SLOAN MANAGEMENT REVIEW WINTER 2008 Google's application programming interfaces to enable developers to embed Google applications such as search, maps and calendars on Web sites or to develop custom search engines. Google also presented APIs for the Web 2.0 social networking site YouTube Inc., which it purchased in 2006. Google has increased the amount of free online software it provides, ranging from e-mail to word processing. SLOANREVIEW.MIT.EDU I Abu g h eerhI Over the past decade, we have investi- The focus of our initial work was on ecosystem. The fourth lever was internal gated dozens of companies that have how Intel, Microsoft, Cisco and other organization: how and to what extent attempted to formulate and implement companies had been able to drive indus- platform leaders should use their organ- platform strategies. These companies try innovation and sustain positions of izational structure and internal operated in a variety of industries includ- platform leadership. We identified four processes to give assurances to external ing computing, telecommunications, "levers" or mechanisms through which complementors that they are genuinely electronic appliances, semiconductors, successful platform leaders were able to "architect" or influence external innova- working for the overall good of the eco- enterprise software, data storage, automobiles, Web portals and electronic tion. The first lever was company scope: offer a template for sustaining a posi- payment systems. The major companies the choice of what activities to perform tion of platform leadership. we studied in the first phase of our re- in-house versus what to leave to other search included Intel, Microsoft, Cisco, companies - in particular, whether the the second stage of our research, which Palm, and NTT DoCoMo, the Tokyo- platform leader should make at least draws heavily on public information. It based mobile communications some of its own complements in-house. has been inspired primarily by several company. We interviewed hundreds of The second lever was technology design consulting engagements (such as with managers and engineers and comple- and intellectual property: what func- Nokia, EMC, Tokyo-based information mented the interviews with analysis of tionality or features to include in the technology company NTT Data and e companies' archival records and com- platform, whether the platform should frontier, the 3D computer graphics de- pany and industry data. This first research stage aimed at uncovering system. Taken together, the four levers This article presents findings from be modular and to what degree the plat- veloper based in Santa Cruz, California), the drivers of success at established form interfaces should be open to outside complementors and at what contacts with managers at organizations using our original framework (such platform leaders. The results of that work were published in MITSloan price. The third lever covered external relationships with complementors: the as enterprise resource planning soft- Management Review in 2002, as well process by which the platform leader ware provider SAP, the Internet Home Alliance and Siemens Automation) and as in our book Platform Leadership manages complementors and encour- numerous MIT master's theses and Ph.D. (HBS Press, 2002). ages them to contribute to a vibrant dissertations, as well as class projects. Qualcomm: Coring inWireless Technology Another company that has done very well in the technological aspects of coring is Qualcomm Inc. in the wireless technology industry. It has been extraordinarily successful in terms of profitability, although the business side of its ecosystem shows some signs of instability due to opposition from a number of its licensees. Founded in 1985, Qualcomm started out designing communications technology for satellites and military applications and went on to establish its proprietary wireless communications technology as a platform for the cellular phone industry.5 Qualcomm solved a basic technical problem of the late 1980s and early 1990s: incompatible and inefficient wireless cell phone technologies. This problem negatively affected other industry players such as telecom operators and handset manufacturers. Qualcomm invented the code division multiple access technology, which breaks phone calls into small bits and then reassembles them, much as the Internet does with data packets. Key industry players such as AT&T (later Lucent) and Motorola licensed Qualcomm's technology. By addressing an essential technological problem in its industry, Qualcomm satisfied the first condition for platform potential. It was also easy for other companies to connect to and build SLOANREVIEW.MIT.EDU upon Qualcomm's technology- the second prerequisite condition for platform potential. To facilitate third parties' adoption of its technology, Qualcomm invested in chipset designs embedding its technology and made CDMA widely available for licensing. The chipsets were compact integrated circuits with physical connectors that made it easy to plug them inside cell phone handsets, and Qualcomm's licensing of its patents made it possible for operators to use CDMA protocols. This strategy enabled dozens of companies to include Qualcomm technology in most secondgeneration and many third-generation cell phones, as well as in hundreds of other wireless devices. Qualcomm has a more checkered performance in its relationships with other companies in its ecosystem. In the company's business model, an important source of revenue is from licensing its intellectual property. Qualcomm therefore filed thousands of patents and regularly and aggressively challenged any potential violators in court. Its customers may not always have appreciated this litigious approach. However, since Qualcomm owned approximately 80% of the patents for CDMA and CDMA2000 technology, they had little choice for many years. Also, Qualcomm lessened the conflicts with some of its key ecosystem members in the late 1990s by selling its cell WINTER 2008 MIT SLOAN MANAGEMENT REVIEW 31 STRATEGY phone handset business, which had competed with its own handsetmaker customers such as Nokia, Ericsson and Motorola. In fiscal 2006, Qualcomm reported an astounding net income of $2.5 billion on sales of $7.5 billion, both selling chipsets as well as licensing its patents. However, as the technology and market continues to evolve, Qualcomm's position could weaken. To avoid paying high license fees, European companies led by Nokia Corp. and companies sponsored by the Chinese government have been developing or exploring alternatives to Qualcomm patents. In 2007, Qualcomm only owned 20% of the patents for the newer Wideband Code Division Multiple Access standard, popular in Europe. Nokia also has gone to court to challenge Qualcomm's high licensing fees, and integrated circuit maker Broadcom Corp. has filed multiple suits against Qualcomm. Qualcomm might have avoided this situation in the cell phone market by investing more of its profits earlier into research and development in order to become the indisputable leader for the next-generation technology; it could also have made more aggressive efforts to work with, not against, customers such as Nokia and Broadcom. Qualcomm is trying to diversify. It is attempting a similar coring strategy for mobile broadband connectivity on laptops, with 70 models embedding Qualcomm chipsets as of May 2007.6 technology, based in Hopkinton, Massachusetts, launched a strategy in the early 2000s that aimed to establish its hardware and software technology, known as WideSky, as a new industrywide platform. WideSky was a middleware software layer that made it possible to integrate and manage third-party hardware. By doing so, it solved an important technical industry problem that affected all IT customers: the efficient management of a growing assortment of heterogeneous information systems that store more and more mission-critical data. With WideSky, EMC succeeded at the technological aspect of coring, but not at the business side of creating an industrywide platform. EMC was unable to convince its competitors - principally IBM, Hewlett-Packard, Hitachi, and Sun Microsystems - to adopt WideSky. Non-EMC customers were also reluctant to adopt a proprietary standard. EMC's competitors decided to create their own open-standards platform and manage this through an industry group, the Storage Networking Industry Association. The number of companies and users supporting this open technology eventually forced EMC to abandon its platform-leadership 7 effort and adopt the SNIA standards. Coring Challenges: EMC's WideSky Not every attempt to establish an industry platform through coring succeeds. Consider the case of EMC Corp.'s WideSky. EMC, a market leader in data storage As the case of WideSky versus SNIA demonstrates, many platform battles involve competition among technical standards and incompatible technologies. A current standards battleground pits Statgi Opton fo Tipping: How to Win Platform Battles By Building Market Momentum Platfor-LeaderWannabe Two principal strategies for becoming a platform leaderare (1) coring (creating a new platform) and (2) tipping a markettoward your company's platform. To become a platform leader, companies need to address both the business and technology aspects of platform strategy. Strategic Option Technology Actions to Consider Business Actions to Consider Coring "*Solve an essential "system" problem "*Facilitate external companies' " Solve an essential business problem for How to create a new platform where none existed before provision of add-ons "Keep intellectual property closed on the innards of your technology "*Maintain strong interdependencies between platform and complements many industry players "* Create and preserve complementors' incentives to contribute and innovate " Protectyour main source of revenue and profit "* Maintain high switching costs to competing platforms "*Tryto develop "*Provide "*Tip across Tipping How to win platform wars by building market momentum "*Rally competitors to form a coalition "*Consider pricing or subsidy mechanisms unique, compelling features that are hard to imitate and that attract users markets: absorb and bundle technical features from an adjacent market 32 MIT SLOAN MANAGEMENT REVIEW WINTER 2008 more incentives for complementors than your competitors do that attract users to the platform SLOAN REVIEW.MIT.EDU When battling to become a platform inastandards war, companies should try to gain control over an installed base, broadly license their intellectual property and facilitate partner investments incomplementary innovation. Toshiba Corp.'s HD DVD against Sony Corp.'s Blu-ray Disc for high-definition media storage. Some earlier well-known examples include JVC's Video Home System versus Sony's Betamax for videocassette recording and Microsoft's Windows versus Apple's stroy the business model for complementors. Intel made this mistake when it tried to enter the PC videoconferencing market with a line of products that competed with higher-end systems Macintosh for personal computer operating systems. For a dominant standard and a platform leader to emerge from such standards wars, the markets have to "tip" in favor of a particular technology standard or platform embodying that standard. "Tip- made by PictureTel Corp. and other companies. Customers suddenly stopped paying for expensive videoconferencing equipment and services, forcing most of the companies that offered them out of existence and probably delaying the adoption of the PC as 9 a device for video communications. ping" is the set of activities or strategic moves that companies can use to shape market dynamics and win a platform war when at least two platform candidates compete. These moves cover sales, But there is another powerful way to accomplish tipping: "tipping across markets," which others have called "platform envelopment."'" Tipping across markets occurs when a company marketing, product development and coalition building. As with coring, successful tipping requires actions taken from both the crosses over the boundary of its existing market to absorb technical features from an adjacent market and bundle them to extend technology and the business sides of the platform. When battling to become a platform in a standards war, companies should try to gain control over an installed base, broadly license their intellectual property and facilitate partner investments in complementary innovation.' Platform-leader wannabes should also invest in building brand equity as well as manufacturing, distribution or service capabilities to signal support of the platform. For example, Matsushita Electrical Industrial Co. publicized its large investment in mass-production facilities as an argument to convince developers of videotapes to adopt the VHS standard, which had been developed at its much smaller Victor the company's platform. Tipping across markets seems particularly important in the context of technological convergence, which is pervasive among computers, telecommunications equip- Company of Japan Ltd. subsidiary. Intel Corp., when trying to convince motherboard makers in the early 1990s to adopt its new interface for connecting peripheral devices, committed to devel- them move into adjacent markets. Another effective tipping behavior is when competitors or users band together in a coalition as a defense mechanism to fight oping it themselves in large quantities. Such approaches are helpful to master the business aspect of tipping. Pricing is another useful strategic weapon in platform battles, but it is more complex to use than in simpler product markets. Platforms can be understood as "double-sided" markets, and it may be necessary for platform leaders and wannabes to subsidize one side of the market (for example, software application developers) in order to bring on the other, paying side (for example, software end-users). But there is no simple formula to tell managers how much to subsidize one side of the market over the other. Moreover, the price that maximizes short-term profits for entry by a platform-leader wannabe. This can be seen not only in the EMC WideSky example but also in cellular telephony, with Nokia teaming up with competitors to support Symbian Ltd.'s Symbian OS in order to build a viable alternative to Microsoft's mobile operating system. Similarly, Linux users and service providers have worked together to limit the positions of both UNIX and Windows in the server operating system market. Companies tend to encounter common obstacles and make similar mistakes when attempting to help a market tip toward their platform. Of course, established platform leaders with powerful positions in a particular market must take care not to a stand-alone hit product may not encourage a global ecosystem of complementors to develop over the long term. At the opposite extreme, trying to stimulate demand through low or zero pricing for all or part of a platform system can de- violate antitrust laws. In addition, however, problems sometimes occur because tipping strategies dependent on narrow technical standards are effective only as long as platform boundaries re- SLOANREVIEW.MIT,EDU ment and digital appliances. For example, Sunnyvale, California-based Palm Inc., originally known as a dominant company in personal digital assistants, has added cell phone, media player and handheld computer functions to its platform. In turn, cell phone manufacturers have added PDA, media player and handheld computer functions to their "smart" cell phones. Companies that tip across markets by bundling new features can leverage existing market power, technology or reputation to help main relatively fixed and predictable. Companies that dominate WINTER 2008 MIT SLOAN MANAGEMENT REVIEW 33 STRATEGY One dominant platform can be a distribution mechanism for entering other platform markets - ifthere are ways to bundle the technologies legally, use the same distribution channels or create unique complementarities. in one market may fail to maintain their positions when converging technologies create opportunities to extend other platforms. Still, we believe that Linux would not have become widely accepted as an enterprise software platform without the decision of Another problem can occur when opening a platform's inner workings to encourage the supply of complementary innovations: Too much openness can expose the company to imitation. International Business Machines Corp. made this mistake when it asked Microsoft and Intel to provide key components of its PC platform and did not contractually retain rights to the operating numerous powerful companies, led by IBM and Hewlett-Packard Co., to provide support services for it and bundle it with their hardware servers and other software products. Linux is a case study that illustrates the ability to accomplish tipping through the power of a large, and still growing, coalition of service provider companies as well as users. system or the microprocessor design. Tipping in the Internet Browser Market Another well-known exLinux: Tipping the Market for Web Server Operating Systems In the 13 ample of tipping took place in the Internet browser market. market of Web server operating systems, Linux provides an excellent example of successful market tipping. This operating system was first introduced in 1991 by the Finnish graduate student Linus Torvalds and was based largely on the UNIX design. Linux has Netscape Communications Corp. introduced the first mass-market browser in 1994 and dominated the segment for several years. Microsoft designed its own browser, Microsoft Internet Explorer, and bundled this "for free" with Windows from 1995 on. As hun- subsequently evolved through a formal and informal community of open-source programmers and users around the world. Linux's interface and installation requirements continue to limit its popularity among average consumers; as a result, there is an ongoing shortage of everyday desktop applications for Linux, compared to Microsoft Windows, the dominant software platform for the PC. However, Linux has managed to become the fastest-growing operating system used in the back office, particularly for Web servers. dreds of millions of new PCs shipped with Internet Explorer over the next several years, and as Microsoft steadily improved its browser technology, Netscape's browser dropped from around an 80% market share to a negligible presence. The Microsoft-Netscape example is complicated by the questions of whether the browser is a separate product from the operating system and how a company with a monopoly in one market must behave when bundling across markets. By bundling a product for free that competitors often offered for sale, Micro- From about 20% of the installed base for server software in 2005, Linux grew to about 50% of the market by 2006.11 Its largest competitors in that market are UNIX, whose main distributor is Sun Microsystems, and the Windows server from Microsoft; both tend to be more expensive than a nominally free product, although nonexpert Linux users generally have to purchase more support services, such as installation and training, than Windows users do. Intel also adapted its microprocessors to run Linux, and this reduced hardware costs. Even Microsoft signed an agreement with Novell Inc. in 2007 to make sure that Windows interoperates with Linux in the future. Several factors contributed to the success of Linux for backoffice applications. 2 Linux offered not only a seemingly low cost of ownership but also very high quality, at least for skilled IT professionals. Without software applications, an operating system is of very limited utility. But the open-source community made sure that Linux worked exceptionally well with what may be considered the "killer" application for webmasters: Apache Software Foundation's free and open-source Apache Web server. 34 MIT SLOAN MANAGEMENT REVIEW WINTER 2008 soft violated antitrust law because it engaged in several anti-competitive practices while it had a monopolistic share in operating systems. For example, Microsoft pressured PC manufacturers and service providers not to bundle the Netscape Navigator Web browser. Apart from the antitrust story, however, there are other lessons from Microsoft's strategy. One dominant platform can be a powerful distribution mechanism for a company that wants to enter other platform markets - if there are ways to bundle the technologies legally, use the same distribution channels or create unique complementarities between the different products. Windows could have served these functions for Internet Explorer even if Microsoft had avoided antitrust problems by offering Windows with and without the browser at different prices and by not pressuring PC manufacturers to avoid the competing product. Microsoft had much greater resources to continue investing in browser R&D. Netscape's management, however, also made a series of strategic and technical errors. SLOANREVIEW.MIT.EDU How might Netscape have maintained its early lead and prevented the market from tipping toward Microsoft? For one thing, Netscape managers misunderstood how to keep a market from tipping in a different direction. Once a comparable product is free, competitors have little choice but to reduce their prices to zero and find other ways to make money, such as through services or advertising. Netscape made the mistake of continuing to charge customers such as Dell Inc. and AOL as well as corporate users for the Navigator browser even after Microsoft began bundling a competitive browser for free. Netscape was also late to see that it could generate enormous advertising revenues from its highly popular Web site. But perhaps Netscape's greatest mistake was to challenge Microsoft too directly and present the browser as an alternative computing platform before it had enough of a user base and ecosystem of complementors (Web site designers, Web application developers and Internet service providers, as well as PC assemblers who were licensing Navigator) to sustain its position.1" Navigator initially was a wonderful complementary application to Windows and might have remained so, at least for several more years. In retrospect, Netscape managers should have thought more carefully about how their early lead could quickly erode with a competitor such as Microsoft, which shipped hundreds of millions of copies of Windows each year. Platform Leadership and Company Size As the Microsoft- Netscape example suggests, size can sometimes be an advantage for companies seeking to tip a market. In fact, one issue that has surfaced in discussions with managers is the question of whether small or medium-sized companies can truly become platform leaders, or whether platform leadership is only an option for large companies like Microsoft, Intel or Cisco. We believe that coring is a possible option for any company because technology and architectural leadership do not directly depend on the size of the company. Qualcomm, for example, was little more than a startup company when it introduced its technology for wireless devices. JVC and even Microsoft and Intel were small companies when they first became platform leaders. And Linux was the product, at least initially, of a lone graduate student working in a remote corner of Europe. At the same time, though, smaller companies are likely to have a harder time negotiating with large enterprise customers. They may also find it difficult to tip markets on their own and generally will need to establish ecosystem partnerships or coalitions of providers and users - as JVC, Microsoft, Intel and Linux have done. In general, becoming a platform leader requires a compelling vision of the future as well as the ability to create a vibrant ecosystem by evangelizing a business model that works both for the platform-leader wannabe and potential partners. It can someSLOANREVIEW.MIT.EDU times be hard to convince others to follow a particular direction, for example, when an industry is undergoing transition and its contours are ill-defined, or when technology is evolving too rapidly. But these are the very conditions when companies that want to become platform leaders can stand out - precisely because they are so badly needed. REFERENCES 1. Since we published our work on platform leadership in 2002, a number of students at MIT and elsewhere have inspired us to continue this research and, in particular, to investigate market or business factors that help platform-leader wannabes succeed. In particular, we would like to thank Ray Fung for his master's thesis, "Networking Vendor Strategy and Competition and Their Impact on Enterprise Network Design and Implementation" (MIT System Design and Management Program, 2006) and Makoto Ishii for his master's thesis, "AStrategic Method to Establish Sustainable Platform Businesses for Next-Generation Home-Network Environments" (MIT Sloan Fellows Program, 2006). 2. For an insightful exposition of drivers of platform emergence inthe context of computing, see S. Greenstein, "Industrial Economics and Strategy: Computing Platforms ' IEEE Micro 18, no. 3 (May-June 1998): 43-53; and T. Eisenmann, G. Parker and M.Van Alstyne, "Strategies forTwo-Sided Markets," Harvard Business Review 84 (October 2006): 92-101. 3. We thus disagree with J. Sviokla and A.Paoni, "Every Product's a Platform," Harvard Business Review 83 (October 2005): 17-18. 4. "Search Market Share Update: Google Rises, MSN Falls, Yahoo Hovers," May 24, 2007, www.seroundtable.com/archives/01 3595.html. 5. This discussion of Qualcomm is based primarily on D.Yoffie, PRYin and L.Kind, "Qualcomm Inc. 2004," Harvard Business School case no. 9-705-401 (Boston: Harvard Business School Publishing, 2005). See also Qualcomm Inc., "Qualcomm Business Model: A Formula for Innovation and Choice" (San Diego, California: Qualcomm, 2007). 6. Qualcomm Inc., "Annual Report 2006" (San Diego, California: Qualcomm, 2006). 7. See J. Saghbini, "Standards inthe Data Storage Industry: Emergence, Sustainability, and the Battle for Platform Leadership" (Master's thesis, MIT System Design and Management, June 2005). 8. See C. Shapiro and H.Varian, "Information Rules: A Strategic Guide to the Network Economy" (Boston: Harvard Business School Press, 1998). 9. See A.Gawer and M.Cusumano, "Platform Leadership: How Intel, Microsoft, and Cisco Drive Industry Innovation" (Boston: Harvard Business School Press, 2002). 10. See Eisenmann, "Strategies." 11. DM Review Editorial Staff, "Industry Research: Linux Vs. Windows - Is the Gap Narrowing?," June 2005, www.dmreview.com/article sub. cfm?articleld=1 030321; and "Comparison of Windows and Linux," May 29, 2007, www.wikipedia.com. 12. See, for example, G.Moody, "Rebel Code: Inside Linux and the Open Source Revolution" (Cambridge, Massachusetts: Perseus, 2001); and Gawer, "Platform Leadership." 13. See M.Cusumano and D.Yoffie, "Competing on Internet Time: Lessons From Netscape and Its Battle with Microsoft" (New York: Free Press, 1998). 14. Cusumano, "Competing." Reprint 49201. For ordering information, seepage 1. Copyright 0 Massachusetts Institute of Technology, 2008. All rights reserved. WINTER 2008 MIT SLOAN MANAGEMENT REVIEW 35 COPYRIGHT INFORMATION TITLE: How Companies Become Platform Leaders SOURCE: MIT Sloan Manage Rev 49 no2 Wint 2008 The magazine publisher is the copyright holder of this article and it is reproduced with permission. Further reproduction of this article in violation of the copyright is prohibited. To contact the publisher: http://mitsloan.mit.edu/smr/ \fEMBARGO until speech delivered check against delivery HOLY SEE PRESS OFFICE 14b US - New York - 25.09.2015 - 08.30 Headquarters of the United Nations Address to the United Nations General Assembly Official translation Mr President, Ladies and Gentlemen, Thank you for your kind words. Once again, following a tradition by which I feel honored, the Secretary General of the United Nations has invited the Pope to address this distinguished assembly of nations. In my own name, and that of the entire Catholic community, I wish to express to you, Mr Ban Ki-moon, my heartfelt gratitude. I greet the Heads of State and Heads of Government present, as well as the ambassadors, diplomats and political and technical officials accompanying them, the personnel of the United Nations engaged in this 70th Session of the General Assembly, the personnel of the various programs and agencies of the United Nations family, and all those who, in one way or another, take part in this meeting. Through you, I also greet the citizens of all the nations represented in this hall. I thank you, each and all, for your efforts in the service of mankind. This is the fifth time that a Pope has visited the United Nations. I follow in the footsteps of my predecessors Paul VI, in1965, John Paul II, in 1979 and 1995, and my most recent predecessor, now Pope Emeritus Benedict XVI, in 2008. All of them expressed their great esteem for the Organization, which they considered the appropriate juridical and political response to this present moment of history, marked by our technical ability to overcome distances and frontiers and, apparently, to overcome all natural limits to the exercise of power. An essential response, inasmuch as technological power, in the hands of nationalistic or falsely universalist ideologies, is capable of perpetrating tremendous atrocities. I can only reiterate the appreciation expressed by my predecessors, in reaffirming the importance which the Catholic Church attaches to this Institution and the hope which she places in its activities. The United Nations is presently celebrating its seventieth anniversary. The history of this organized community of states is one of important common achievements over a period of unusually fastpaced changes. Without claiming to be exhaustive, we can mention the codification and development of international law, the establishment of international norms regarding human rights, advances in humanitarian law, the resolution of numerous conflicts, operations of peace-keeping and reconciliation, and any number of other accomplishments in every area of international activity and endeavour. All these achievements are lights which help to dispel the darkness of the disorder caused by unrestrained ambitions and collective forms of selfishness. Certainly, many grave problems remain to be resolved, yet it is clear that, without all those interventions on the international level, mankind would not have been able to survive the unchecked use of its own possibilities. Every one of these political, juridical and technical advances is a path towards attaining the ideal of human fraternity and a means for its greater realization. For this reason I pay homage to all those men and women whose loyalty and self-sacrifice have benefitted humanity as a whole in these past seventy years. In particular, I would recall today those who gave their lives for peace and reconciliation among peoples, from Dag Hammarskjld to the many United Nations officials at every level who have been killed in the course of humanitarian missions, and missions of peace and reconciliation. HOLY SEE PRESS OFFICE 14b/2 Beyond these achievements, the experience of the past seventy years has made it clear that reform and adaptation to the times is always necessary in the pursuit of the ultimate goal of granting all countries, without exception, a share in, and a genuine and equitable influence on, decision-making processes. The need for greater equity is especially true in the case of those bodies with effective executive capability, such as the Security Council, the Financial Agencies and the groups or mechanisms specifically created to deal with economic crises. This will help limit every kind of abuse or usury, especially where developing countries are concerned. The International Financial Agencies are should care for the sustainable development of countries and should ensure that they are not subjected to oppressive lending systems which, far from promoting progress, subject people to mechanisms which generate greater poverty, exclusion and dependence. The work of the United Nations, according to the principles set forth in the Preamble and the first Articles of its founding Charter, can be seen as the development and promotion of the rule of law, based on the realization that justice is an essential condition for achieving the ideal of universal fraternity. In this context, it is helpful to recall that the limitation of power is an idea implicit in the concept of law itself. To give to each his own, to cite the classic definition of justice, means that no human individual or group can consider itself absolute, permitted to bypass the dignity and the rights of other individuals or their social groupings. The effective distribution of power (political, economic, defense-related, technological, etc.) among a plurality of subjects, and the creation of a juridical system for regulating claims and interests, are one concrete way of limiting power. Yet today's world presents us with many false rights and - at the same time - broad sectors which are vulnerable, victims of power badly exercised: for example, the natural environment and the vast ranks of the excluded. These sectors are closely interconnected and made increasingly fragile by dominant political and economic relationships. That is why their rights must be forcefully affirmed, by working to protect the environment and by putting an end to exclusion. First, it must be stated that a true \"right of the environment\" does exist, for two reasons. First, because we human beings are part of the environment. We live in communion with it, since the environment itself entails ethical limits which human activity must acknowledge and respect. Man, for all his remarkable gifts, which \"are signs of a uniqueness which transcends the spheres of physics and biology\" (Laudato Si', 81), is at the same time a part of these spheres. He possesses a body shaped by physical, chemical and biological elements, and can only survive and develop if the ecological environment is favourable. Any harm done to the environment, therefore, is harm done to humanity. Second, because every creature, particularly a living creature, has an intrinsic value, in its existence, its life, its beauty and its interdependence with other creatures. We Christians, together with the other monotheistic religions, believe that the universe is the fruit of a loving decision by the Creator, who permits man respectfully to use creation for the good of his fellow men and for the glory of the Creator; he is not authorized to abuse it, much less to destroy it. In all religions, the environment is a fundamental good (cf. ibid.). The misuse and destruction of the environment are also accompanied by a relentless process of exclusion. In effect, a selfish and boundless thirst for power and material prosperity leads both to the misuse of available natural resources and to the exclusion of the weak and disadvantaged, either because they are differently abled (handicapped), or because they lack adequate information and technical expertise, or are incapable of decisive political action. Economic and social exclusion is a complete denial of human fraternity and a grave offense against human rights and the environment. The poorest are those who suffer most from such offenses, for three serious reasons: they are cast off by society, forced to live off what is discarded and suffer unjustly from the abuse of the environment. They are part of today's widespread and quietly growing \"culture of waste\". The dramatic reality this whole situation of exclusion and inequality, with its evident effects, has led me, in union with the entire Christian people and many others, to take stock of my grave responsibility in this regard and to speak out, together with all those who are seeking urgently-needed and effective solutions. The adoption of the 2030 Agenda for Sustainable Development at the World Summit, which opens today, is an important sign of hope. I am similarly confident that the Paris Conference on Climatic Change will secure fundamental and effective agreements. HOLY SEE PRESS OFFICE 14b/3 Solemn commitments, however, are not enough, even though they are a necessary step toward solutions. The classic definition of justice which I mentioned earlier contains as one of its essential elements a constant and perpetual will: Iustitia est constans et perpetua voluntas ius sum cuique tribuendi. Our world demands of all government leaders a will which is effective, practical and constant, concrete steps and immediate measures for preserving and improving the natural environment and thus putting an end as quickly as possible to the phenomenon of social and economic exclusion, with its baneful consequences: human trafficking, the marketing of human organs and tissues, the sexual exploitation of boys and girls, slave labour, including prostitution, the drug and weapons trade, terrorism and international organized crime. Such is the magnitude of these situations and their toll in innocent lives, that we must avoid every temptation to fall into a declarationist nominalism which would assuage our consciences. We need to ensure that our institutions are truly effective in the struggle against all these scourges. The number and complexity of the problems require that we possess technical instruments of verification. But this involves two risks. We can rest content with the bureaucratic exercise of drawing up long lists of good proposals - goals, objectives and statistical indicators - or we can think that a single theoretical and aprioristic solution will provide an answer to all the challenges. It must never be forgotten that political and economic activity is only effective when it is understood as a prudential activity, guided by a perennial concept of justice and constantly conscious of the fact that, above and beyond our plans and programmes, we are dealing with real men and women who live, struggle and suffer, and are often forced to live in great poverty, deprived of all rights. To enable these real men and women to escape from extreme poverty, we must allow them to be dignified agents of their own destiny. Integral human development and the full exercise of human dignity cannot be imposed. They must be built up and allowed to unfold for each individual, for every family, in communion with others, and in a right relationship with all those areas in which human social life develops - friends, communities, towns and cities, schools, businesses and unions, provinces, nations, etc. This presupposes and requires the right to education - also for girls (excluded in certain places) - which is ensured first and foremost by respecting and reinforcing the primary right of the family to educate its children, as well as the right of churches and social groups to support and assist families in the education of their children. Education conceived in this way is the basis for the implementation of the 2030 Agenda and for reclaiming the environment. At the same time, government leaders must do everything possible to ensure that all can have the minimum spiritual and material means needed to live in dignity and to create and support a family, which is the primary cell of any social development. In practical terms, this absolute minimum has three names: lodging, labour, and land; and one spiritual name: spiritual freedom, which includes religious freedom, the right to education and other civil rights. For all this, the simplest and best measure and indicator of the implementation of the new Agenda for development will be effective, practical and immediate access, on the part of all, to essential material and spiritual goods: housing, dignified and properly remunerated employment, adequate food and drinking water; religious freedom and, more generally, spiritual freedom and education. These pillars of integral human development have a common foundation, which is the right to life and, more generally, what we could call the right to existence of human nature itself. The ecological crisis, and the large-scale destruction of biodiversity, can threaten the very existence of the human species. The baneful consequences of an irresponsible mismanagement of the global economy, guided only by ambition for wealth and power, must serve as a summons to a forthright reflection on man: \"man is not only a freedom which he creates for himself. Man does not create himself. He is spirit and will, but also nature\" (BENEDICT XVI, Address to the Bundestag, 22 September 2011, cited in Laudato Si', 6). Creation is compromised \"where we ourselves have the final word... The misuse of creation begins when we no longer recognize any instance above ourselves, when we see nothing else but ourselves\" (ID. Address to the Clergy of the Diocese of Bolzano-Bressanone, 6 August 2008, cited ibid.). Consequently, the defence of the environment and the fight against exclusion demand that we recognize a moral law written into human nature itself, one which includes the natural difference between man and woman (cf. Laudato Si', 155), and absolute respect for life in all its stages and dimensions (cf. ibid., 123, 136). HOLY SEE PRESS OFFICE 14b/4 Without the recognition of certain incontestable natural ethical limits and without the immediate implementation of those pillars of integral human development, the ideal of \"saving succeeding generations from the scourge of war\" (Charter of the United Nations, Preamble), and \"promoting social progress and better standards of life in larger freedom\" (ibid.), risks becoming an unattainable illusion, or, even worse, idle chatter which serves as a cover for all kinds of abuse and corruption, or for carrying out an ideological colonization by the imposition of anomalous models and lifestyles which are alien to people's identity and, in the end, irresponsible. War is the negation of all rights and a dramatic assault on the environment. If we want true integral human development for all, we must work tirelessly to avoid war between nations and between peoples. To this end, there is a need to ensure the uncontested rule of law and tireless recourse to negotiation, mediation and arbitration, as proposed by the Charter of the United Nations, which constitutes truly a fundamental juridical norm. The experience of these seventy years since the founding of the United Nations in general, and in particular the experience of these first fifteen years of the third millennium, reveal both the effectiveness of the full application of international norms and the ineffectiveness of their lack of enforcement. When the Charter of the United Nations is respected and applied with transparency and sincerity, and without ulterior motives, as an obligatory reference point of justice and not as a means of masking spurious intentions, peaceful results will be obtained. When, on the other hand, the norm is considered simply as an instrument to be used whenever it proves favourable, and to be avoided when it is not, a true Pandora's box is opened, releasing uncontrollable forces which gravely harm defenseless populations, the cultural milieu and even the biological environment. The Preamble and the first Article of the Charter of the United Nations set forth the foundations of the international juridical framework: peace, the pacific solution of disputes and the development of friendly relations between the nations. Strongly opposed to such statements, and in practice denying them, is the constant tendency to the proliferation of arms, especially weapons of mass distraction, such as nuclear weapons. An ethics and a law based on the threat of mutual destruction - and possibly the destruction of all mankind - are self-contradictory and an affront to the entire framework of the United Nations, which would end up as \"nations united by fear and distrust\". There is urgent need to work for a world free of nuclear weapons, in full application of the non-proliferation Treaty, in letter and spirit, with the goal of a complete prohibition of these weapons. The recent agreement reached on the nuclear question in a sensitive region of Asia and the Middle East is proof of the potential of political good will and of law, exercised with sincerity, patience and constancy. I express my hope that this agreement will be lasting and efficacious, and bring forth the desired fruits with the cooperation of all the parties involved. In this sense, hard evidence is not lacking of the negative effects of military and political interventions which are not coordinated between members of the international community. For this reason, while regretting to have to do so, I must renew my repeated appeals regarding to the painful situation of the entire Middle East, North Africa and other African countries, where Christians, together with other cultural or ethnic groups, and even members of the majority religion who have no desire to be caught up in hatred and folly, have been forced to witness the destruction of their places of worship, their cultural and religious heritage, their houses and property, and have faced the alternative either of fleeing or of paying for their adhesion to good and to peace by their own lives, or by enslavement. These realities should serve as a grave summons to an examination of conscience on the part of those charged with the conduct of international affairs. Not only in cases of religious or cultural persecution, but in every situation of conflict, as in Ukraine, Syria, Iraq, Libya, South Sudan and the Great Lakes region, real human beings take precedence over partisan interests, however legitimate the latter may be. In wars and conflicts there are individual persons, our brothers and sisters, men and women, young and old, boys and girls who weep, suffer and die. Human beings who are easily discarded when our only response is to draw up lists of problems, strategies and disagreements. As I wrote in my letter to the Secretary-General of the United Nations on 9 August 2014, \"the most basic understanding of human dignity compels the international community, particularly through the norms and mechanisms of international law, to do all that it can to stop and to prevent further systematic violence against ethnic and religious minorities\" and to protect innocent peoples. HOLY SEE PRESS OFFICE 14b/5 Along the same lines I would mention another kind of conflict which is not always so open, yet is silently killing millions of people. Another kind of war experienced by many of our societies as a result of the narcotics trade. A war which is taken for granted and poorly fought. Drug trafficking is by its very nature accompanied by trafficking in persons, money laundering, the arms trade, child exploitation and other forms of corruption. A corruption which has penetrated to different levels of social, political, military, artistic and religious life, and, in many cases, has given rise to a parallel structure which threatens the credibility of our institutions. I began this speech recalling the visits of my predecessors. I would hope that my words will be taken above all as a continuation of the final words of the address of Pope Paul VI; although spoken almost exactly fifty years ago, they remain ever timely. \"The hour has come when a pause, a moment of recollection, reflection, even of prayer, is absolutely needed so that we may think back over our common origin, our history, our common destiny. The appeal to the moral conscience of man has never been as necessary as it is today... For the danger comes neither from progress nor from science; if these are used well, they can help to solve a great number of the serious problems besetting mankind (Address to the United Nations Organization, 4 October 1965). Among other things, human genius, well applied, will surely help to meet the grave challenges of ecological deterioration and of exclusion. As Paul VI said: \"The real danger comes from man, who has at his disposal ever more powerful instruments that are as well fitted to bring about ruin as they are to achieve lofty conquests\" (ibid.). The common home of all men and women must continue to rise on the foundations of a right understanding of universal fraternity and respect for the sacredness of every human life, of every man and every woman, the poor, the elderly, children, the infirm, the unborn, the unemployed, the abandoned, those considered disposable because they are only considered as part of a statistic. This common home of all men and women must also be built on the understanding of a certain sacredness of created nature. Such understanding and respect call for a higher degree of wisdom, one which accepts transcendence, rejects the creation of an all-powerful lite, and recognizes that the full meaning of individual and collective life is found in selfless service to others and in the sage and respectful use of creation for the common good. To repeat the words of Paul VI, \"the edifice of modern civilization has to be built on spiritual principles, for they are the only ones capable not only of supporting it, but of shedding light on it\" (ibid.). El Gaucho Martn Fierro, a classic of literature in my native land, says: \"Brothers should stand by each other, because this is the first law; keep a true bond between you always, at every time - because if you fight among yourselves, you'll be devoured by those outside\". The contemporary world, so apparently connected, is experiencing a growing and steady social fragmentation, which places at risk \"the foundations of social life\" and consequently leads to \"battles over conflicting interests\" (Laudato Si', 229). The present time invites us to give priority to actions which generate new processes in society, so as to bear fruit in significant and positive historical events (cf. Evangelii Gaudium, 223). We cannot permit ourselves to postpone \"certain agendas\" for the future. The future demands of us critical and global decisions in the face of world-wide conflicts which increase the number of the excluded and those in need. The praiseworthy international juridical framework of the United Nations Organization and of all its activities, like any other human endeavour, can be improved, yet it remains necessary; at the same time it can be the pledge of a secure and happy future for future generations. And so it will, if the representatives of the States can set aside partisan and ideological interests, and sincerely strive to serve the common good. I pray to Almighty God that this will be the case, and I assure you of my support and my prayers, and the support and prayers of all the faithful of the Catholic Church, that this Institution, all its member States, and each of its officials, will always render an effective service to mankind, a service respectful of diversity and capable of bringing out, for sake of the common good, the best in each people and in every individual. Upon all of you, and the peoples you represent, I invoke the blessing of the Most High, and all peace and prosperity. Thank you. ___________________ EMB RGO BAR until speech deli s ivered check against de elivery HOLY SEE PR Y RESS OFF FICE 11 USA - Washin A ngton - 24.0 09.2015 - 09.20 Cong gress of the United St e tates of Am merica Visit Or riginal text Mr Vice-Pres r. sident, Mr Speaker, r. Ho onorable Me embers of C Congress, De Friends, ear I am m gratefu for your invitation to address th Joint Ses most ul i o his ssion of Con ongress in \"t land of the the ee home of the brave\". I would like t think that the reason for this is t w to t n that I too am a son of t m this fre and the h gre continent, from w eat which we have all rec h ceived so much and toward whi we sha a comm m t ich are mon res sponsibility y. Each s or daug son ghter of a gi iven country has a mis y ssion, a pers sonal and so ocial respon nsibility. Yo our wn bility as me embers of Congress is t enable th country, by your leg C to his gislative activity, to gr row ow responsib as a nation. Y are the face of its people, the represen You e s eir ntatives. Yo are calle to defend and preserve ou ed d the dignity of your fellow citizens in the tirele and dem e f w i ess manding pursuit of the c common go ood, for this is s the chief aim of all polit e tics. A poli itical society endures when it seek as a voc ty w ks, cation, to sa atisfy comm mon needs by stim mulating the growth of all its mem mbers, espec cially those in situation of greater vulnerabil ns lity ity ys e T lled or risk. Legisl lative activi is alway based on care for the people. To this you have been invited, cal nd d who an convened by those w elected you. Yours is a work w which makes me refle in two ways on the figure of M ect w Moses. On the one ha and, the patriarch a lawgive of the people of Isra symboliz the need of peoples to keep alive their sen e and er ael zes d s nse of unity by m means of just legislation On the o t n. other, the fig gure of Mos leads us directly