Digital platform technology infrastructure

Can our infrastructure scale to support non-linear growth in ecosystem interactions?

This article is part of the Digital Platforms hub

Once a platform reaches critical mass of adoption, ecosystem activity may start scaling non-linearly. This is primarily observed on platforms on account of network effects, where greater ecosystem activity makes the platform more valuable, which in turn attracts further activity from the ecosystem.

A scalable architecture can seamlessly support higher workloads as ecosystem activity starts to grow non-linearly. Scalable infrastructure requires loosely coupled, modular technical architecture. Distinct functional subsystems are not strongly connected, enabling individual modules to be modified without cascading dependencies across the organization. This may be achieved by employing a micro-services-based architecture.

As the platform business scales, different subsystems may have different requirements regarding scalability. Loose coupling and modularity allows targeted modifications to be made at scale without increasing the complexity of the overall system. It also enables delegation of changes across different infrastructural teams instead of increasing operational burden with a central infrastructural team. Loose coupling across a modular architecture also enables greater resilience of the system by introducing redundancy as required. This is especially important in ecosystem use cases which spike at various points – for instance, transactions on e-commerce platforms spike in the holiday Season. 

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Infrastructural scalability is further ensured through asynchronous process communication. As modularity increases, these modular sub-systems need to increasingly communicate across each other. Communication introduces dependencies and synchronous communication may introduce performance bottlenecks. This may be addressed through asynchronous process communication and an event-driven architecture. Individual modules generate events to a message queue and they are processed from the queue, reducing mutual dependency across modules. Loose coupling in architecture combined with this loose coupling in communication sets up the system for scalability.

More tactically, scalable infrastructure choices also require that the platform organization rely on existing infrastructure as-a-service and open source tools and frameworks instead of building internally.

Finally, a scalable system should also be evolvable. Anticipating all infrastructural requirements upfront may result in long product cycles and over investment towards saving use cases that never need to be addressed. Instead, the platform organization should launch and test, capturing data as it goes, to inform the infrastructure scalability roadmap.

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Frequently Asked Questions

How do platform firms navigate conflicts of interest as ecosystem facilitators and participants, maintaining trust?

Platform firms manage the delicate balance between facilitating an ecosystem and participating within it by implementing strategies to mitigate conflicts of interest. This includes establishing clear rules of play and governance principles, as well as providing transparency in decision-making processes. Additionally, firms may offer contractual commitments to refrain from competing directly with ecosystem partners for a specified duration, thus fostering trust and fairness in their relationships.

How do platform firms educate partners on governance and foster transparency, enhancing trust and collaboration?

Examples of how platform firms educate ecosystem partners on governance principles and ensure transparency in decision-making processes include incorporating partner feedback into workflow and conducting off-platform partner management initiatives. These initiatives aim to clarify the factors contributing to partner success on the platform and to address any concerns or uncertainties partners may have regarding governance issues. By fostering open communication and collaboration, platform firms can build trust and strengthen relationships within the ecosystem.

How do platform firms ensure contract compliance and gauge partner program effectiveness for ecosystem integrity?

Platform firms enforce contractual commitments to avoid conflicts of interest by implementing robust monitoring and compliance mechanisms. These may include regular audits, performance evaluations, and dispute resolution processes to ensure adherence to contractual agreements. Additionally, firms may assess the success of their partner programs by tracking key metrics such as partner satisfaction, retention rates, and overall ecosystem growth. By continuously monitoring and evaluating their initiatives, platform firms can refine their approaches to promote fairness and trust within the ecosystem.