The Peer-to-Peer Revolution
Companies with cloud computing services like Amazon Web Services, Google Cloud, Microsoft Azure, and Salesforce are getting a massive head start on what the future of the marketplace will be. These big players are the fuel feeding the fire of the share economy where players like Airbnb, Parking Panda, and Rover thrive.
To put it simply, the share economy is comprised of any peer-to-peer marketplace which cuts out the middleman or centralized authority and brings people and businesses together to deal with each other directly [1]. What makes this business model so popular is that it saves people money, is convenient, and connects people together. For instance, on Offerup, many users sign up using their Facebook profiles where they become instantly connected with their friends and can see what items they are offering or begin offering their own items to people they may already know. Most of these sellers aren’t looking to sell at a higher price to get paid a larger commission, but are looking to turn their items laying around the house into quick cash—not to mention, you can find everything you need from the palm of your hand while sitting in your house or on the go. These apps essentially remove big businesses from the picture and empower everyday people to generate passive income streams by becoming both the producer and the consumer.
This may mean that big businesses will lose revenue from selling expensive finished products when someone turns to renting a tent for a camping trip instead of buying one or hiring professional services when you can find almost anything you need on Fiverr. However, it creates the opportunity for large and well established businesses to provide these companies with the resources they need to be successful. This is where the companies in the beginning of this article such as Google Cloud come into play [2]. Instead of allocating resources to creating new products on their own, they can equip developers and entrepreneurs with the tools necessary to create peer-to-peer software or to open the community up to helping them develop their next product. Similarly to the topics that our guest speaker, Carl Eschenbach, discussed in class about companies diverting increasingly more resources into SaaS, PaaS, and IaaS, these avenues of research and development may be signs that larger companies are realizing the future of their profits lies in their capability to share their resources and assets as well.
References:
[1] https://www.currencyfair.com/blog/peer-to-peer-marketplace-revolution-50-companies-changing-world/
[2] https://www.forbes.com/sites/tomiogeron/2013/01/23/airbnb-and-the-unstoppable-rise-of-the-share-economy/#cb82a68aae3d
4 comments on “The Peer-to-Peer Revolution”
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Agreed, the other portion that is very relevant here is that these “new businesses” work under different rules. They work at a way quicker pace than traditional firms, they work with way more flexibility given their lack of brick and mortar and finally they work without intermediaries, directly with the people that are adding value who rarely need a long training to perform. The ease of business on these models is amazing and big corporations are struggling big time to keep up with the pace.
Interesting thoughts on how the sharing economy, driven by cloud capabilities, will shape the future B2B sector! I would like to expand on what you have stated. Even today there is a range of examples for sharing economy in the B2B sector. And you are completely right in your blog post: Many of those business models are driven by cloud services. There is an interesting article on business.com (https://www.business.com/articles/b2b-sharing-economy/) which summarizes major shifts from traditional models to sharing economy in the B2B sector. Those are e.g. cloud storage, cloud-based phone service, SaaS model and hosting your website directly in the cloud. All those models can be classified as a sharing economy due to the sharing of resources. That is why your definition of sharing economy might be too narrow. However, it is important to emphasize that there are also sharing economy models like shared workspaces which are completely unrelated to the cloud. Actually, many B2C models could also exist without the cloud, so that is where I disagree a bit with your article. Finally, your outlook of future business models could be expanded: Companies could not only share resources but a car manufacturer could be the one offering the sharing platforms (e.g. for autonomous driving) on its own. That would be a very profitable shift in the business model. Knowledge sharing, as it happens in joint ventures is interesting but we need to consider that many traditional industries are IP-intense and could not easily share production-relevant data! Hope to get more thoughts on that!
Sorry, the text above was supposed to be a new comment, so I posted it again below!
But I like your points too, Victor! Totally agree with your thoughts that many sharing economy models are way agiler due to the pure fact of scalability. However, we should keep in mind that this can also lead to high reputational risks. Whether compliance procedures are rather easy to implement in closed organizations, it might be difficult to do that in sharing models. Just look at the franchising business which in a broader definition can also be understood as a sharing-based business. It is empirically shown that here it is way more difficult to implement a functioning corporate culture. So the lack of hierarchy in the sharing economy comes at a cost!
Interesting thoughts on how the sharing economy, driven by cloud capabilities, will shape the future B2B sector! I would like to expand on what you have stated. Even today there is a range of examples for sharing economy in the B2B sector. And you are completely right in your blog post: Many of those business models are driven by cloud services. There is an interesting article on business.com (https://www.business.com/articles/b2b-sharing-economy/) which summarizes major shifts from traditional models to sharing economy in the B2B sector. Those are e.g. cloud storage, cloud-based phone service, SaaS model and hosting your website directly in the cloud. All those models can be classified as a sharing economy due to the sharing of resources. That is why your definition of sharing economy might be too narrow. However, it is important to emphasize that there are also sharing economy models like shared workspaces which are completely unrelated to the cloud. Actually, many B2C models could also exist without the cloud, so that is where I disagree a bit with your article. Finally, your outlook of future business models could be expanded: Companies could not only share resources but a car manufacturer could be the one offering the sharing platforms (e.g. for autonomous driving) on its own. That would be a very profitable shift in the business model. Knowledge sharing, as it happens in joint ventures is interesting but we need to consider that many traditional industries are IP-intense and could not easily share production-relevant data! Hope to get more thoughts on that!