Intel’s Platform Evolution + Platform Benefits

platform strategy

Perhaps the best text that crypto-founders can read is Michael McGrath’s Product Strategy for High Technology Companies (2001). Although somewhat dated, McGrath uses real-world examples to explain why certain high-tech product strategies succeed or fail. Particularly interesting is a story describing Intel’s pathway to market success within the processor industry. In essence, the company discarded its paint-by-numbers platform strategy after realizing the true value of its core technology.

As McGrath reports, Intel viewed microprocessors as single-product platforms in the 1970s. It took nearly a decade for the company to recognize the many benefits a multiple-product platform strategy offered. Once it did, Intel began releasing a new and powerful processor platform every few years (i.e., the 80386, the 80486, the Pentium platform, and the Pentium Pro platform).

Intel’s previous strategy for gaining market share revolved around creating ever more powerful processors. Its failure in this regard prompted Intel to try a new strategy, one that “used one core technology as the foundation for developing several platforms tailored to meet the needs of multiple markets and multiple products”(p. 54). This strategy generated exceptional gains in several markets and encouraged the company to fully diversify its product line. Rather than being cost-prohibitive, this strategy produced cost savings by achieving economies of scale (as all Intel products relied on one core technology). Intel’s success has lessons for the crypto industry, notably that platforms that adapt their core technology in multiple ways to multiple markets (think Ethereum) are those most likely to achieve success.

Additional Platform Benefits

Using historical examples, McGrath’s book details how a well-designed platform strategy can beget future gains in market share. He also reveals the dire consequences that befall companies relying on faulty strategic assumptions. Chapter headings include Benefits of a Platform Strategy, Product Platform Examples, and Platform Strategy in Action. While somewhat dry-sounding, cryptocurrency marketers will find it a fascinating read. The chapter Benefits of a Platform Strategy is especially elucidating. After reading it, cryptocurrency investors may wonder if certain platforms are strategic-minded at all.

The chapter depicts how having a platform strategy “helps management focus on key decisions at the right time.” It also asserts that platform strategies “lead senior management to focus on important platform level decisions instead of diluting attention across numerous products.” (p.63). Ethereum’s Vitalik Buterin appears to be following this playbook. He is currently redoubling his efforts to advance Casper and sharding (rather than DApps and smart contracts). Both are critically important to Ethereum’s future, as they will dramatically improve the platform’s if ability to scale.

Of course, DApps rarely capture any leadership team’s focus as they are under the purview of third-party developers (here is where any Microsoft analogy breaks down). And yet, they’re the closest analogy the crypto-world has to a platform-based product.

Another benefit derived from having a platform strategy is the capability to “deploy products rapidly and consistently (p. 68).” Platforms enable companies to leverage the cost of developing related products by introducing a commonality factor. In the crypto world, that would be the ERC20 standard (Ethereum). Or it might be an application programming interface that enables programmers to create DApps in any language (NEO, XTRABYTES.).

Not incidentally, certain outfits within crypto are beginning to see the lure that a code-agnostic platform brings. By being code-agnostic, such platforms are better able to outsource product development. In contrast, platforms limited to specific languages (i.e., Ethereum with Solidity) restrict their product options by default.

Finally, platforms encourage product development teams “to take a longer view of product strategy.” This is particularly true in crypto, where a platform’s strengths and limitations tend to drive whatever future product plans. Ethereum’s experience with Cryptokitties is particularly interesting in this regard. After this third party DApps began congesting the Ethereum network, SophiaTX put their ICO launch on hold. Its likely that other coins rethought their immediate product plans as well. As a result, the Ethereum leadership team quickly refocused their efforts on improving their network scalability.

Conclusion

Cryptocurrency observers expect crypto-based platforms to have a substantial impact on the industry. While Ethereum has the first-follower advantage in this regard (94 out of 100 top cryptocurrencies rely on them), expect other platforms to emerge. Like Intel, their future success may well rest on understanding their core competitive advantage.

Would you like to know more?

We don’t just publish articles, XTRABYTES™ is a whole new blockchain platform that allows DApps to be programmed in any language, utilizing a new consensus algorithm called Proof of Signature. In doing so, XTRABYTES™ presents a next – generation blockchain solution capable of providing a diverse set of capabilities to the general public.

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