Value of Digital Infrastructure

Good overview

How Do Digital Infrastructures Increase a Firm’s Value?  by Irving Wladawsky-Berger

“In the information age, the value of a firm rests fundamentally on how it stores, shares and processes information,” wrote Seth Benzell, Jonathan Hersh, and Marshall Van Alstyne in a recent paper, How APIs Create Growth by Inverting the Firm. “Digital infrastructure is therefore central to a firm’s success.” 

But, how do digital infrastructures increase a firm’s value? One method is to make more efficient use of the firms internal capital by modularizing, reconfiguring and reusing the firms IT resources. A second method, used in platform businesses, is to leverage external capital by giving access to the firm’s resources to third parties, and capturing a share of the resulting surplus. Both methods require the implementation of Application Programming Interfaces (APIs), whether for only for internal use by the firm’s developers or exposed externally to the firm’s platform partners. Both methods also feature a modular architecture of remixable resources. “Modularity combines the advantages of standardization typically associated with high volume processes together with the advantages of customization typically associated with bespoke processes.”  ..... '