vs. BigCommerce
Shopify
Platform: API, App Store, Theme Store
- What it did
- API and App Store instead of building everything in (2009)
- BigCommerce
- API by 2010 but little used; theme marketplace only in 2019
Platform Strategy
What is Platform Strategy?
Platform strategy is the choice to build a foundation that other businesses build their own products on, such as an operating system, an online store builder or a business application. Those outside developers sell to the platform's customers, and the platform earns from supplying the foundation. Shopify and Salesforce both followed it.
Also calledplatform businessecosystem strategy
How Platform Strategy works
Outside builders invest when the platform gives them good tools, stable interfaces and a route to paying customers. Their products extend what customers can do far past what the company could build alone, and the platform earns from supplying the foundation. Shopify launched an API and App Store in 2009 instead of building every feature itself. Salesforce opened AppExchange in 2005, and software companies such as Apttus built whole businesses on it.
Outside plug-ins appearGreenHopper adds agile boards to Jira
Open a marketplaceAtlassian Marketplace launches with 60 apps (2012)
Builders earn most revenue$120M of $150M purchases to partners (2016)
Customers extend Jira2,000+ add-ons by June 2016
How companies won with Platform Strategy
From the win chains in Strategy Canon case studies: what the winner did, and what its rival did at the same step.
vs. BMC Remedy · 2003–05
ServiceNow
Platform first, with ITSM written as its proof
- What it did
- Ex-Peregrine CTO (Remedy's owner 2001-02) wrote a browser app platform alone (2003-05)
- BMC Remedy
- Action Request System from 1990; BMC inherited Remedy from bankrupt Peregrine (2002)
vs. Siebel Systems · 2003–13
Salesforce
Customization on the shared core becomes a platform others build on
- What it did
- Customers asked first for integration, then to change tabs and fields
- Siebel Systems
- Oracle bought Siebel (2005) and sold several CRMs at once ('which CRM?')
vs. Rally Software · 2008–16
Atlassian
Outside developers extend Jira, starting with agile boards
- What it did
- GreenHopper, Pyxis's third-party Jira plug-in with 700+ customers, bought as Jira's agile planning (2009)
- Rally Software
- Built or licensed portfolio, quality and idea modules into its own higher-priced editions (2010) and bought AgileZen and Flowdock
Also tagged: Autodesk · BigCommerce · LiveRamp · Microsoft · OpenAI · Practice Fusion · Roblox · Slack · Stripe · Xero
Platform Strategy vs. Aggregator Strategy and App Marketplace
| What it is | How to tell it apart | Example | |
|---|---|---|---|
| Platform Strategy | Opening a foundation that outside businesses build products on and sell to customers | Find independent companies whose business is built on it | Software makers such as Apttus building on Salesforce |
| Aggregator Strategy | Attracting users directly, then organizing suppliers around serving that demand | The company owns the customer; suppliers fill its destination | Airbnb organizing discovery and booking of stays |
| App Marketplace | A public store where third parties sell add-ons to the core product | It's the product surface; platform strategy is the choice to open up | Shopify's App Store of third-party merchant features |
How to tell if a company has it
- Independent businesses build on itOutside companies sell apps, themes, extensions or services built on the foundation, such as Apttus on Salesforce.
- A foundation builders can actually useDeveloper tools, published interfaces, data access and commercial terms that make building on it practical.
- Builders reach their own customersA marketplace, dealer channel or install base through which builders find, sell to and serve customers.
- Real participation and a share for the platformCounts of apps, developers or partner revenue, a reason builders keep investing, and how the platform earns.
Who names it
| Author | What they call it / where it appears |
|---|---|
| Thompson | Platforms — “Shopify and the Power of Platforms” (2019); “A Framework for Regulating Competition on the Internet” (2019) |