The platform land rush is definitely on. You can’t swing a dead cat, as the saying goes, without finding an announcement about some new platform or some established vendor’s attempt to enhance its existing platform. Some sorting out seems to be in order.
What’s not a platform these days?
Well, if it’s easy to substitute the word “application” for “platform,” then you should use “application,” because it will be more accurate. We’re suffering from word inflation all over the place, and “application” has been split into “apps” — those things you run on your phone — and “applications,” a word vendors shy from, preferring “platform” even though they should know better. For the record, an app is still an application, and a platform should be more. A lot more.
Platforms Don’t Grow on Trees
Building a platform takes work. It is doubtful that you can declare a platform into existence as a startup. Chances are good that a new platform is really a standalone application whose investors don’t want to see it become orphaned. However, platforms take time and effort to build.
If you consider the majors — Oracle, Microsoft, Salesforce and SAP — they’ve been in the business for decades, acquiring and integrating solutions to make something with a large footprint, which they call a “platform.”
It’s not just about quantity of functionality — there’s quality to consider too. For instance, in addition to all of the integrated apps, a platform ought to have a really good tool set that enables users to maintain what they’ve got and build new things, including simple database apps as well as sophisticated processing apps that incorporate the social, analytic, integration, workflow, mobile, and other capabilities that make a platform real.
To be sure, there are more than casual differences among the majors and their offerings, but generally speaking, each is trying to become the one-stop-shop for customers needing software technology. Each also differentiates itself through emphasis on different aspects of deliverables, while hewing to the cloud mantra.
Is It Too Late to Become a Platform?
Well, quite possibly it is too late. It takes a very large amount of investment, along with the time and talent of scarce and very smart people to make a platform. While all that development is going on, the market is not standing still. We’ve recently seen large platform providers acquire some successful companies, and I suspect the rationale for the sellers was that it was time to join rather than attempt to compete.
Microsoft bought LinkedIn recently, but it also bought large numbers of other technology companies that more or less fit its vision of platform. Oracle has bought more companies than I can count and continues to fold them into its platform or suite of clouds. Same for Salesforce, which just completed its acquisition of Demandware, an e-commerce product.
As large as these collections of applications or platforms are, they easily can get bigger. We’re already at a point where very few businesses likely would use all of any vendor’s platform offerings because there’s just too much stuff.
Many vendors have provided multiple tracks — such as SMB and enterprise offerings — which would seem to disqualify an organization from taking everything on offer. Still, there’s the gray area where an emerging business has one foot in each camp, so hybridization is a definite possibility. It’s in the hybrids that the true value of a platform emerges.
However, “hybrid” can mean a mixed offering from multiple vendors. The gobsmacking reality of today’s platforms is that as huge as they are, they are still not big enough to crowd out the competition. That’s a tough reality, because part of the reason for embarking on the platform trail is to help lock out competition. But no such luck.
All vendors know they have to provide an elegant approach to integrating whatever is on a customer’s site. Of course, that goes double for the legacy systems every business runs. The legacy systems might have analogs on every vendor’s platform, but legacy systems also go by the name of “foundation systems” — responsible for a business’ bread, butter and profits. Businesses naturally are cautious about upsetting the apple cart, so integration is a critical need.
Ecosystems Come Into Focus
The platform wars are in full swing, but the outcome seems assured. There will be several major competing platforms, and we know which providers have them. Resistance is futile. Announcing a new platform today is spitting into the wind. However, there’s plenty of opportunity at the platform level for the third-party applications commonly called the “ecosystem.”
In the bad old days, third parties couldn’t commit to a single vendor because markets were not big enough. Today, though, committing to one vendor’s platform is smart business. Committing means abandoning the need to maintain source code tuned to this or that operating system, database, hardware or even language.
It seems to me that smart startups should begin life with a commitment to an ecosystem — and thus a platform. It also means figuring out a useful offering in a market that seems to have everything, but that’s a story for another time.