Platformbased innovation strategies Erkki Ormala Innovation Management Aalto

Platform-based innovation strategies Erkki Ormala Innovation Management Aalto University, Business School

Future of Computing Future Internet • • • Personalized Interactive Context aware Semantic Digital convergence Cloud computing New user experience Mobile sensing Nanotronix Ubiquitous compuing Ultra fast internet access …

Digital Convergence In the Digital World all will be digitalized and Content packaged into Services delivered over all and consumed with a variety of which can be Delivery channels Consumption devices 3

Cloud will change the communication landscape Lähde: Wikipedia 4

Software platforms are in the heart of ecosystems of mutually dependent communities q q q Windows Videogames: Xbox Ebay Google Linux Apple i. Phone q At their core: a software platform offering API’s (Application programming interface) q Support ecosystems consisting of mutually dependent communities of businesses and customers

Insights so far q Software platforms empower many modern industries: digital music, mobile phones, on-line auctions, PCs, video games, web-based advertising, on-line searching q Most software platforms are composed of modules that provide software services to other software programs. APIs provide application programmers access to these services. APIs enable platform developers to write code that can be used by application developers, reducing effort q Software platforms provide services to stakeholder groups (users, developers, hardware makers) q Businesses based on software platforms follow multisided strategies to harness positive feedbacks q The design of software platforms and the business models they serve has important implications for the structure of industries based on computing infrastructures: modular architecture with different players specializing in different modules (computers, telecoms, automotive)

Platform leaders strategies and dilemmas q Examples of platform leaders: Amazon, Microsoft, Google, Apple, Akamai, Alibaba, Baidu q Driving the evolution of the platform based on modular architecture with players specializing in different modules q Normally firms would control their innovation by controlling key suppliers, building strong brands, acquire patents as barriers to entry -> control strategy q Platform leaders and complementary innovators to cooperate, to increase the size of the market for everyone -> cooperation strategy q Platform leaders interest is to stimulate and channel innovation on complementary products (network effects) q As platforms are made of components whose interactions are built around standard interfaces, standards strategies are critical

Global platform players Amazon Google Akamai Baidu Alibaba

Google q Initially the search engine, its platform was the Internet q Downloadable and free toolbar accelerates critical mass q Built Internet portal to surround the search engine q Android operating system and Chrome browser to facilitate mobile computing, search, advertising q Acquired Motorola’s mobile business q Broad view on platforms and business models (free and open) making it difficult for companies that charge for technology and lack advertising income

Microsoft - Apple q Microsoft – limited its scope to Windows and reluctant to cannibalize this business. But moving gradually into other areas q Always had potential to compete with software and even hardware complementors q Developed close relations with hardware vendors to bundle Microsoft applications with Windows into their PCs q Apple: user interface design, product innovation are basis for success with i. Pod, i. Phone, i. Tunes, i. Pad and transformation into a global platform leader on multiple integrated devices

Media Storage, Processing, and Delivery on AWS

Iaa. S Paa. S Amazon AWS portfolio Source : Amazon AWS overview documentation, November 2014 12

AWS Media Customers

Shifting the Workflow to the Cloud

Recent example: Platforms developed within the Future Internet Public Private Partnership Open Standard Platform A true open innovation ecosystem

• that consumer lot of energy resources and are inefficient

Wolt • Wolt delivers food from more than 400 restaurants Helsinki, Tampere, Turku • Wolt has expanded its services to 15 countries including Finland, Sweden, Estonia, Poland, etc. Private investors have invested 150 M€ in Wolt

Labour Markets; E-lancing in Practice • Elance/Upwork; 940 m$ revenues; 2, 8 m job postings, 9. 7 m elancers and 3. 8 m companies • 99 designs; 1. 2 m elance designers, 250000 employers • Amazon mechanical Turk; approx 250000 ’turkers’, human intelligent tasks • Transfluent; immediate translation services for all

Financial Markets; Blockhain; Bitcoin

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OCEAN Cloud Computing in Finland Aalto University Experts from EIT ICT Labs, UC Berkeley, DIGILE

Cloud Computing in Finland -OCEAN study 2015 • Main drivers for using cloud computing – flexibility and scalability of IT resources (40% of the respondents) • Fairly uniform: – cloud services adoption patterns – drivers for partner selection • Most commonly used services – standard communication services like email, web-site and blogs • Approach to open source and open access – cautious due to issues related to business continuity and support

OCEAN- Cloud services used

OCEAN- Barriers to usage The reported major barriers: privacy, confidentiality and business continuity risks.

OCEAN- drivers to usage Scalability and flexibility as the major drivers for Cloud

Cloud service providers in Finland is well served by all types of Cloud players but there is room for new entrants

• 5 G • Edge Cloud • Capacity 5 Gb Lista • Latency 1 ms • Lista

10 • Lista • Lista

Factory of the future 4 3 5 G OPC UA Client • Lista Rasberry Pi • Lista I/O Gateway • Lista 5 6 7 • Lista ACMS on cloud 1 Cloud computing 2 Data analytics Mobile phone/ laptop Remote Access OPC UA Wrapper Aspect PLC OPC Database Sensors / actuators DNS ABB 800 x. A Duplicated Hosts Super computer Dell 730 xd 12 cores, 120 Gb Mirrored 800 Gb Operation Stations Hosts Virtualization servers Training and learning main server Flexible, reconfigurable, scalable, interoperable network-enabled collaboration between decentralized and distributed cyber-physical systems

• Lista • Lista

FCAI in brief Long-term investment for all founding members Lista • Started early 2018, Flagship • Lista of Academy of Finland • Lista 2019 -2023 • Lista • Based on long-term research • Lista excellence and established collaboration • • • Approx. 30 AI professors with their groups (~ 200 AI researchers) and a large group of researchers from other fields, as well as different stakeholders • Strengthens industrial collaboration and societal impact fcai. fi

• Lista • Lista

Research Focus: Solve AI bottlenecks 1. Data efficiency. Most of the value in big data is in the enormous number of small questions it could answer. At this resolution data becomes small and a scarce resource. ✔ We will make AI applicable to a significantly wider scope of questions by several means: data-efficiency, prior knowledge, (privacy-preserving) sharing and fusion of data. • Lista 2. Trust and ethics. Many AI techniques cannot be trusted because they are • Listato manipulation and information stealing, and reliability is not vulnerable • Lista known. ✔ We will develop the required privacy-preserving, secure and resilient AI. • Lista Societal trust stemming from dependable AI enables wide applicability. 3. Understanding. ✔ We will give AI the capability to understand the user, which enables for making AI understandable. Outcome: AIs that are able to augment human capabilities.

Scientific Collaboration NSF Science and Technology Center for Science of Information (USA) • Lista Alan Turing Institute (UK) • Lista EIT Digital (EU) H 2 O: Hong Kong –Helsinki Oasis for Innovation and Technology Japan + many others

education society science Systematic evaluation FCAI – from science to impact economy • Lista • Lista IMPACT INDUSTRY AND SOCIETY • Bring research result to practice • Create FCAI ecosystem • Promote effective and ethical application of AI • Support governmental decision-making EDUCATION • Provide new AI professionals • Educate professionals in industry and public sector • Increase general public’s understanding IMPACT PROGRAMS AND ACTIONS fcai. fi

FCAI Industry and Society Partnership Program • Lista • Lista 50 Ecosystem Members fcai. fi

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