An innovation platform is a technology that outside firms build their own products on, using tools and interfaces the owner provides. Its value grows with each product built on it. Its main task is making all those products fit and work together.
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Key factors
- Easy to connect. A product can become an innovation platform when it has connection points for outsiders, a modular design and cheap or free access.
- Good tools. Software kits, documentation and test environments cut what it costs a developer to build.
- Stable interfaces and terms. Developers invest in work they can’t easily move. When the owner changes interfaces or fees, it needs long notice and help to migrate.
- Quality and access rules. The owner decides who may connect and checks that products meet a standard, so users can trust what they install.
Examples
Nvidia. Nvidia’s CUDA software, introduced in 2006, lets developers program its chips for AI and scientific work. Nvidia says about 6 million developers use it. Software built on CUDA is a big reason buyers stay with Nvidia chips. Rival chipmakers offer their own tools, but rewriting years of CUDA code is slow and costly, so developers keep building where they started.
Unity. Thousands of game studios build on the Unity engine. In September 2023 Unity announced a new fee of up to $0.20 for each game install above set thresholds, and studios protested. Unity scaled the plan back within weeks, its chief executive left in October 2023, and it scrapped the fee in September 2024. A change of terms broke studios’ trust.
Frequently asked questions
What is the difference between an innovation platform and a transaction platform?
An innovation platform lets outside firms build products on a shared technology. A transaction platform matches buyers and sellers so they can trade.
Is an innovation platform the same as an open innovation platform?
No. An open innovation platform matches a firm’s problems with outside solvers, often for a prize. An innovation platform gives outside firms a technical core to build their own products on.
Is an innovation platform the same as a product platform?
No. A product platform shares parts across one firm’s own range of products. An innovation platform opens its core to outside firms, which build products of their own.
How does an innovation platform make money?
Through licence fees, usage charges, revenue shares or sales of the core product itself, such as the chips or devices that the outside software runs on.
Can a physical product be an innovation platform?
Yes. Games consoles, smart speakers and industrial machines all qualify once outside firms can build products that run on them, using interfaces the maker publishes.
Full guide: Types of platforms