The Digital Phoenix Effect: Platforms Improving Legacy Businesses
The Digital Phoenix Effect: The Platform Revolution is Just Getting Started, And Legacy Firms Are Leading
Digital Phoenix Effect
Traditional companies are building internal multi-sided platforms to solve recurring business problems, including inefficient transactions, innovation bottlenecks, evolving customer demands, underutilized data, and poor strategic insights.
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.