Platform, platform, platform feels like the modern day equivalent to Marcia, Marcia, Marcia. It’s all anyone talks about in enterprise software, and strangely few people have a good hold on why it’s different from the old model and quite valuable.
The least nuanced definition of a platform is that it is the 1s and 0s technical scaffolding that let’s you build consistently, quickly, and cheaply. This is still too vague, so an example might help.
In the old world of enterprise software, you have a bunch of technologies (i.e. code languages) that likely do not play well together. So as a developer you end up spending far too much of your time transforming Thing A into Thing B to do something simple like upload the ESPN logo. We’re talking about unsexy, back-end time wasting activity.
A different analogy is the US vs. the European Union. We in the US all speak English as a common language whereas there EU has quite a few to deal with. Moreover, we have a consistent governance framework whereas the French vs. Italian constitutions do not necessarily agree on everything. So, platform=US and old-software-model=EU. This is very much not to say that the US model is best by the way – just that it gives you some flexibility to move consistently.
So back to the value of a software platform. The point of all this is if someone solves a platform problem for you, they have done a bunch of unsexy back-end integration work for you. Thing A talks to Thing B in the same way that Thing X talks to Thing Y. You stop worrying about making the sausage work and more about configuring the end result.
This is a HUGE reason why companies are betting on the cloud – they’re sick and tired of doing the back-end work and are happy to outsource this to another company who can spend all their time solving that problem. Home Depot is in the business of selling DIY, not building IT systems. Why not offload to someone better equipped to solve!
It’s clear that buyers see value in the platform upside, but so too do the platform providers. A platform is like the big green lego base.
You can build a castle on one side and a storehouse on the other. The lego blocks can mix and match around the board. So as a company, the benefit here is building an app on one side of the platform that can share data, workflows, code, you name it with an app on the other side to the platform.
If App #1 is a castle (high value) you give it a high price – say $100. If App #2 is a storehouse (low value) you give it a low price – say $20. And because the two things are technically differentiated (I’d much rather live in a castle) you can justify the price difference between the two. It’s hard to overstate how valuable this is because you can do it fast. The same price-value differentiation happens when buying a Cadillac vs. a Chevy but you can’t crank out a car with this kind of speed.
Wrapping up, a platform gives you the freedom of language, data movement, and overall scaffolding to build on a consistent base.
The Lemonade Problem 