The Digital Phoenix Effect: Platforms Improving Legacy Businesses
For years, we've been captivated by the rise of super-platforms—Amazon, Uber, Spotify—that have reshaped entire industries. These stories, driven by scale, speed, and digital-native bravado, have come to symbolize the platform revolution. But while headlines remain obsessed with Silicon Valley, the fundamental transformation is happening elsewhere: in the quiet, steady reinvention of legacy companies across sectors and geographies.
Take John Deere, Siemens, and AXA. These companies are legacy firms focused on tractors, industrial technology, and insurance are rarely associated with contemporary disruption. Yet each of these traditional companies is reimagining its core business through the introduction of multi-sided platforms.
That's where Daniel Trabucchi and Tommaso Buganza come in. As researchers and long-time collaborators, they've spent years studying how legacy firms can harness the power of platform strategies—not by mimicking digital-native unicorns, but by activating the untapped potential hidden in their existing assets. Their new book, The Digital Phoenix Effect: How Legacy Companies Can Lead the Platform Revolution Without Burning Everything Down, explores exactly that: how legacy companies can use platform thinking to lead the next wave of innovation on their terms—rising from within, without having to burn it all down to start anew.
Revelations from the S&P 500
In a recent large-scale study, Trabucchi and Buganza examined all S&P 500 companies and their platform-related initiatives. They identified more than 800 initiatives across the S&P 500 that described themselves as platform efforts. Yet, when assessed through a stricter lens—requiring both multi-sided interactions and the presence of self-reinforcing network effects that enable growth at minimal marginal cost—only 140 stood up to scrutiny.
This refined selection revealed a powerful truth: platform thinking is not exclusive to tech-native giants. On the contrary, it's gaining ground as a strategic tool for transformation in industries such as manufacturing, finance, energy, and healthcare.
Their research discovered that non-platform companies are deploying platforms to quietly transform internal processes to solve five common business problems: missing or inefficient transactions, innovation bottlenecks, evolving customer demands, underutilized data, and poor strategic insights.
Take Dish Media. Dish didn't adopt platform thinking to reinvent its core offering, but to improve how it advertises. With millions of set-top boxes already in place, Dish turned this idle asset into a data engine. Advertisers now benefit from precise audience targeting, while viewers passively generate behavioral insights. The more viewers engage, the more value advertisers receive—a classic unidirectional network effect. It's a transformation that didn't create a new service, but made an existing one exponentially more innovative and more competitive.
Kraft Heinz sought to make its internal R&D and marketing functions faster, sharper, and more effective. With Kraft-O-Matic, a platform built on historical sales and consumer data, teams can now anticipate trends and respond in real time. Existing customers become silent contributors of insight, while internal decision-making gets clearer and faster. It's platform thinking applied not to wow the market, but to quietly, powerfully upgrade how innovation happens behind the scenes.
With rising pressure to speed up drug discovery, Merck faced a familiar but thorny challenge: innovation bottlenecks. Rather than trying to develop every new tool internally—which would have been slow, risky, and expensive—Merck turned to its ecosystem. By opening its research infrastructure to third-party developers, the company transformed its internal scientific know-how into a platform-ready idle asset. What's particularly powerful here is the role shift: external developers, once seen as vendors or suppliers, became clients of the platform, building tools, contributing knowledge, and benefiting from direct access to Merck's internal environment. It's a win-win, where mutual value—and innovation—scale on both sides.
A very different challenge was confronting Intuit. The financial software giant recognized that evolving customer demands were outpacing what even their most intuitive products could handle. Users needed expert support—but scaling in-house services wasn't a fit for a software business. So instead of trying to own the solution end-to-end, Intuit reframed the opportunity. It opened its platform to certified tax and bookkeeping professionals—onboarding them not as external partners, but as platform customers. Through TurboTax Live and QuickBooks Live, these professionals connect directly with users inside the software experience. The result? Customers gain human guidance; experts gain new business; and Intuit scales a complex, high-touch service without changing its core model.
Introducing the Platform Thinking Framework
These insights gave rise to a practical framework to help companies apply platform thinking to solve recurring business problems. All of these findings and tools are captured in Daniel and Tommaso's new book: The Digital Phoenix Effect: How Legacy Companies Can Lead the Platform Revolution Without Burning Everything Down. This is a guide for legacy firms to rise from their ashes by deploying internal multi-sided platforms.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
30 minutes ago
- Yahoo
Postman, engineer, cleaner: Are hackers sneaking into your office?
When you think of a cyber attack, most of us imagine a classic hacker—a man in a hoodie, hunched alone over his computer, accessing a company's network remotely. But that's not always the case. Despite office security desks, it's easy to disguise yourself and simply walk in, a cyber security trainer told Euronews. 'Many people, when they see a high vis top, they think: 'Oh this person's an engineer' or something like that, and then just let them walk through.' While we're all aware of cyber attacks and the increasing threat they pose to businesses—particularly in light of recent attacks on Pandora, Chanel, Adidas and Victoria's Secret—most of us significantly underestimate the physical ways our defences can be breached. Global cyber security spending is projected to reach $213 billion (€183bn) in 2025, up from $193 billion (€166bn) in 2024, according to the latest data from Gartner, Inc. Despite this, according to Cisco's 2025 cybersecurity readiness index, only 4% of organisations globally are fully prepared for modern threats. According to security experts Sentinel Intelligence, physical security is a critical blindspot in our defences, and the consequences of ignoring this attack vector can be disastrous. The physical frontline of digital security The overall cyber threat in Europe is estimated to cost €10 trillion in 2025 and it's only set to grow, according to a recent interview with software company Splunk. In terms of physical cyber attacks, the threat is real and dangerous, as shown by the World Security Report 2023. Research found that large global companies, meaning those with combined revenues of $20 trillion, reported $1tn (€860bn) in lost revenue during 2022, directly caused by physical security incidents. That could mean a hacker gaining access to your office building in order to target your digital infrastructure. Related Defence sector outpaces overall job market in Europe amid rising security priorities Businesses set to fail if cyber resilience not most important thing says Splunk strategy head Penetration testing is a common service, commissioned by business leaders to test their internal defences. If you work in a big office, it has probably happened around you, without you even knowing. Euronews Business spoke to Daniel Dilks, director of operations at Sentinel Intelligence, to learn exactly what some of their recent tests have entailed. Case 1: Tailgating & access breach at a corporate headquarters 'Sentinel operatives dressed in business attire entered the building by tailgating staff during the morning rush, carrying fake ID badges and a laptop bag to blend in. Once inside, they located an unsecured meeting room, connected to the guest Wi-Fi, and left a rogue device (a network implant),' Dilks told Euronews. Case 2: Out-of-hours lock picking & data exposure 'During off-hours, testers gained access by picking a standard euro-cylinder lock on the side door. Once inside, they accessed an unlocked filing cabinet containing printed client contracts and passwords. No alarms were triggered,' Dilks explained. And for a criminal, once they've figured out how to enter a building, they can potentially do it on numerous occasions, each time gathering more information or causing more damage. Case 3: Social engineering & credential theft simulation 'An operative posed as a contractor for the building's heating and ventilation system. After entering with a high-vis vest and fake work order, the individual was escorted into a server room by staff who believed the visit was scheduled. While inside, they photographed exposed credentials and connected a USB 'dropbox' to a workstation,' he added, explaining that it's common for penetration testers to leave USB pens scattered around offices. Many workers, in the hope of being helpful, will plug them into their computers to see who it belongs to. In a real world attack scenario, this could introduce malware directly into your company network. In all of these examples, poor physical security measures, reluctance to challenge or verify unknown people, and making basic mistakes like writing passwords on post-it notes could all lead to serious consequences. Related How long could it take a hacker to crack one of your passwords in 2025? What are the consequences of a cyber attack? Though it's tricky to break down the exact cost of a security breach, attacks have short- and long-term consequences for a business. There are the initial direct costs which could be linked to physical damage. 'Somebody manages to break in, and they sabotage your system, they basically smash it up, right? So there's a direct cost there to the actual equipment,' the cyber security expert explained. 'But if damage to the equipment means you're not able to function for several days, that's loss of business. And sometimes when a customer can't reach you several times, they may decide to go elsewhere.' The expert explained that consequences can quickly intensify if data is wiped and backups don't work, adding that organisations can crumble without their systems. Indirect costs could also have enduring ramifications. 'Let's say someone steals your data and then there's intellectual property or confidential documents and then they get leaked. What's the cost to the organisation? There's a reputational cost there, they may lose contracts when the customers lose trust in them.' Companies can also be fined for these sorts of data breaches. Related Defence sector outpaces overall job market in Europe amid rising security priorities Surprising attack vectors The cyber security expert shared some particularly surprising ways that criminals have hacked into company systems in recent years. 'There was this case where in a casino in the US, attackers gained access to the network, not through going directly through the main part of the network, but they compromised a water-regulating device in an aquarium that was connected to the system.' And whilst we might not all have aquariums in our homes and offices, smart devices can be vulnerable too. 'When smart kettles first came out, the security community was very interested,' the expert explained. 'If you go to a cyber security conference, sometimes you'll see a demo of them hacking a kettle and then extracting the WiFi password, and then using the WiFi passport to then go into a network, and many things can snowball from there' If you're running a company, it's worth identifying all the possible ways you could be attacked. Even so, the expert emphasised that while we need to exercise caution, it doesn't mean we need to be rude or unkind to strangers in the workplace out of fear. 'Just be wary and be aware. We don't need to change our nature and be unkind to everyone, but we just need to be aware that there are some malicious people out there.' Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
2 hours ago
- Yahoo
After Skyrocketing Over 3,000% in 5 Years, Can MicroStrategy Stock Continue to Rise Higher?
Key Points MicroStrategy is the largest corporate holder of Bitcoin, and it's not even close. The company recently reported a mammoth profit due to gains on digital assets. Its Bitcoin-buying strategy has been working tremendously well, and other companies may follow suit. 10 stocks we like better than Strategy › Did you know that in five years, Bitcoin has risen more than 870% in value? It's a staggering return given that the S&P 500 is up just 91% over that same period. That's still a solid return, but it pales in comparison to Bitcoin. But what may be even more surprising is that a company that has simply been loading up on Bitcoins has been a far better buy than the cryptocurrency itself. MicroStrategy (NASDAQ: MSTR), which now goes by just "Strategy," has climbed a remarkable 3,000% in five years. It hasn't been experiencing huge sales growth or become a top artificial intelligence (AI) company. Instead, it has just been accumulating Bitcoins, and its enthusiasm for the cryptocurrency has made it a red-hot stock for retail investors to buy. However, with the company already accumulating such massive gains in a short time frame, is it due for a crash or at least a correction? Or could it still be a good buy today? More companies are following the same blueprint Strategy's remarkable returns over the years haven't gone unnoticed by other businesses. More companies are also eagerly investing in the top digital currency in the world as they try to appeal to retail investors. Social media stock Trump Media and Technology Group has recently announced it bought $2 billion in Bitcoin. The stock, largely a speculative play, is likely hoping a similar bullishness in crypto sends its valuation soaring. It's now the fifth-largest corporate holder of Bitcoin. Some other notable names that have accumulated significant amounts of Bitcoin include Block and Tesla. For Strategy, it is still far and away the leader, owning nearly 629,000 Bitcoins as of Aug. 4. The next-largest corporate position belongs to crypto mining company Mara Holdings, which has 50,000 Bitcoins. But the sheer success of Strategy's approach could entice other businesses to do the same and start accumulating significant holdings of Bitcoin as well. If the novelty of Strategy's stock wears off, that could result in less bullishness and excitement, potentially leading to more muted gains for it in the future. A disconnect with fundamentals could make the stock ripe for a sell-off Loading up on Bitcoins has enabled Strategy's valuation to grow to a market cap of $110 billion today. It's large enough to now be part of the Nasdaq 100 index, which is made up of the top non-financial stocks on the exchange. (Strategy is technically involved in providing companies with business intelligence and analytics software.) A quick look at some valuation metrics highlights just how egregiously priced the stock has become: Strategy trades at more than 200 times its revenue, and its estimated forward price-to-earnings multiple, which is based on analyst estimates, is over 1,200. In its most recent quarter, which ended on June 30, Strategy reported a monstrous net income of more than $10 billion despite only generating $115 million in revenue. The boost came, of course, from its position in digital assets. Strategy reported an unrealized gain of over $14 billion during the period, which was offset partly by a nearly $4 billion provision for income taxes. The business has benefited significantly from Bitcoin's rising valuation and the digital currency hitting record levels this year, but with such a large valuation and enormous volatility on its financials, it makes Strategy a highly speculative investment. Can Strategy's stock still be a good buy? If Bitcoin continues rallying and Strategy keeps on to its tally of Bitcoins, it wouldn't surprise me to see the crypto stock rise even higher in the future. The temptation may be to think that Bitcoin is destined to continue going higher, but that's by no means a sure thing. Without strong fundamentals to fall back on, Strategy is simply too volatile and risky of an investment to own. It has achieved significant gains in recent years, but that doesn't mean that the stock's future performance will mirror that. Unless you're a crypto enthusiast with a high tolerance for risk, you're likely better off avoiding Strategy's stock, as it could take you on a roller-coaster ride. Should you buy stock in Strategy right now? Before you buy stock in Strategy, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Strategy wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $636,563!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,108,033!* Now, it's worth noting Stock Advisor's total average return is 1,047% — a market-crushing outperformance compared to 181% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of August 4, 2025 David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin, Block, and Tesla. The Motley Fool recommends Nasdaq. The Motley Fool has a disclosure policy. After Skyrocketing Over 3,000% in 5 Years, Can MicroStrategy Stock Continue to Rise Higher? was originally published by The Motley Fool Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
2 hours ago
- Yahoo
Elf Beauty Offers Buying Opportunity After Post-Earnings Sell-Off, Deutsche Bank Says in Upgrade
Elf Beauty (ELF) offers an attractive entry point for investors following Thursday's 9.5% slump in t Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
