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By Robert Crudup, EVP & CIO, SEI Investment Company
Industry after industry is being disrupted by new business models supported by technology platforms. The rate of an industry’s disruption can be dramatic as exampled by firms like Uber which has redefined the for-hire personal transportation business. Networked business models supported by Information Technology are driving disruption. Should your firm become a networked business?
The purpose of this article is too put a frame around the technology needed to support business models aimed at disrupting markets.
One way to think about this is to consider, perhaps, the most disruptive platform ever. When Apple introduced the iPhone most assumed it was a phone with a camera. We soon found that it is a platform. The elements of Apple’s business model (a networked business) are-
• A technology platform (the phone)
• An app construction tool kit for developers.
• A network of developers.
• A network of iPhone users
• An online store to make those apps available to anyone.
The change to our world has been dramatic.
So, what is the technology needed to support a networked business model?
Start with a cloud based Platform as a Service (PaaS) deployed with Services Oriented Architecture (SOA). The two allowing easy access to the development platform.
Brief Introduction to Services Oriented Architecture (SOA)
Service orientation is a software design paradigm that stresses the separation of processing elements, which results in software being built as autonomous components. Each component has its own operational capabilities (service). The service is expressed with a service contract (inter-operability) for use by other components.
Originated prior to the dot-com boom by software firms like Microsoft and Oracle, SOA has been embraced by the software industry as the most efficient way to build large, complex system platforms.
As the development framework for a technology platform, and booted in object oriented programming, SOA allows developer to use a ‘construction kit’ to design and build services above the core platforms data and business logic.
Industry after industry are being disrupted by new business models supported by technology platforms
Today, SOA is a pre-requisite thereby allowing the advent of Platform as a Service (PaaS); many firms are in the process of modernizing or building new platforms to take advantage of SOA. This SOA framework allows speed and simplicity when building new user experiences (UX’s) based on web-services.
Platform as a Service (PaaS)
PaaS is a category of cloud computing that delivers a platform allowing programmers to build applications and services accessed over the world-wide-web. PaaS services are hosted in the cloud and accessed by users simply via their web browser.
PaaS cloud delivers the integrated development environments and construction kits (provided by SOA design framework) to simplify and standardize application development. What developers gain with PaaS is an on-line development platform that has been designed and assembled for rapid development? A PaaS environment is one in which a developer can quickly move into and build or customize apps. PaaS makes the development, testing, and deployment of applications quick, simple, and cost-effective. In short, the intent of PaaS is to simplify the code writing process, thereby making it faster and cheaper to publish reliable apps and the ensuing user interfaces.
More about PaaS, Open API’s & UX Construction Kit
Advanced (PaaS) services offer firms an easier path moving to the digital age. The technology ‘entry fee' does requires modern technology with an ecosystem, web services and Service Oriented Architecture.
These advanced platforms offer a ‘space’ for design components. These components (open APIs) provide a software service to other components. An advanced PaaS will have well-defined, published contracts with open APIs. These open APIs are among the things that make these platforms easy for developers to use.
An open API is an application with a specific service or function. PaaS open API functions are easily accessible to developers.
A shorter definition of an open API is a service or application that resides on a PaaS. It is a programmatic interface (software application) that a developer can leverage within their solution to gain access to functions or data that they have not developed themselves. They can then add their own app and by combining the standard PaaS apps and their aps then provide new services via a UX or web page. All of this is supported on the firms PaaS most likely by a private cloud.
Open API’s are backed by open data and built on open standards. With complex business model they usually are supported by an underlying processing platform.
The last decade has brought many disruptive technology and business models to market. Some famously disrupted such as the likes of AIRbnb, Amazon, Netflix, SalesForce and Uber. More will follow, but there will be common technology themes among the winners.
• Strong Business Models
• Service Orientated Architecture
• Cloud Based Platform as a Service
• Customer Networks
• Partner’s and Developer’s Building and Distributing API’s and User Interfaces