Page 28 - IoT - Pilot

Supporting Notes

• Free-market systems create an interplay between those seeking to bring new, better ideas to
market and those seeking to sustain established market positions in the face of these challengers.

• In the preindustrial and emerging digital world, committed capital investment created a tangible
barrier to new entrants. It really didn't matter if someone had a great idea for a new car if they didn't
also have the capital to create associated production and supply chain systems. Similarly, in an
increasingly complex, emerging digital world, the lack of a complete ERP system could hamper an
organization's ability to go to market while meeting its regulatory and legal obligations.

• As we've explored, the new digital age is not just dissolving the advantages of committed capital
investment, it's actually turning these into disadvantages. But this raises two important questions:
(1) What is the foundation of value in a digital ecosystem, and (2) how does the successful
challenger of today avoid becoming obsolete tomorrow?

• Thirteen of the top 30 most valuable companies in the world (by market capitalization) are platform
providers. Three (Apple, Google, Microsoft) of the top five have both platforms and complementary
product ecosystems. For challengers, the goal isn't just to create new or better products or
services, but to evolve those into platforms that disintermediate established players or change the
very rules of competition in a space.