Platform as a Product 101
In the ever-evolving world of technology, businesses are constantly searching for strategies that can propel them to the forefront of innovation and growth. One such strategy that has gained significant momentum in the wake of the platform engineering craze is the adoption of a platform as a product approach. For those who attended Kubecon EU 2024 this spring, this idea of a platform as a product really took root. And you know, once it’s reached the main stage at conferences, it’s worth the conversation of diving deeper into it for the masses.
I wanted to explore the concept of the platform as a product strategy and its potential to revolutionize the way businesses operate. Join me!
Understanding Platform as a Product Strategy
Platform as a product refers to a strategic approach where a company builds and offers a digital platform as its core product. This platform serves as a foundation for various applications, services and interactions, enabling users, developers and partners to collaborate, innovate and create value within the ecosystem.
An integral part of this strategy involves building a digital infrastructure that enables the exchange of value between multiple stakeholders. Unlike traditional product-centric approaches, platforms focus on facilitating interactions and transactions between users, developers and partners. By providing a foundation for collaboration, platforms can create network effects, where the value of the platform increases as more participants join.
‘Platform as a Product’ in the Wild
It’s great in theory, but how can we demonstrate how companies have leveraged a platform as a product strategy to create thriving ecosystems, drive innovation and unlock new revenue streams in the real world? Here are a few examples of companies that have done so successfully:
- Amazon Web Services (AWS): Probably the most well-known example is AWS. AWS provides a comprehensive suite of cloud services, including computing power, storage, databases and analytics. By offering these services as a platform, AWS enables developers and businesses to build, deploy and scale applications easily. The platform’s extensive ecosystem has led to the creation of thousands of third-party services, driving innovation and growth.
- Apple App Store: Another example that revolutionized the way we look at platforms is the Apple App Store, which created a platform that connects developers with millions of iPhone users. Apple empowers developers to create and distribute applications to a vast user base by providing a centralized marketplace. The platform as a product strategy has generated substantial revenue for Apple and fostered a thriving ecosystem of developers and entrepreneurs.
- Airbnb: A disruptor in the hospitality industry, Airbnb created a platform that facilitates trust, transactions and a seamless user experience by connecting hosts with travelers. The platform enables hosts to monetize their properties and provides travelers with a wide range of accommodation options. Airbnb’s success lies in its ability to create a robust ecosystem that benefits both hosts and guests.
- Salesforce: As a leading customer relationship management (CRM) platform, Salesforce has embraced the platform as a product strategy, offering a comprehensive suite of cloud-based applications and services that enable businesses to manage their customer relationships, sales processes and marketing campaigns. The platform allows developers and partners to build and integrate custom applications, extending the functionality of the core product and fostering innovation within the ecosystem.
Benefits of Platform as a Product Strategy
It’s one thing to see major success stories, but what are the everyday benefits that companies can expect from adopting a platform as a product strategy? While results will vary depending on company size, focus and products, typically the following benefits ensue:
- Increased innovation: Platforms encourage third-party developers and partners to build upon the core product, resulting in diverse applications and services. This fosters innovation and allows businesses to tap into the collective intelligence of the ecosystem, driving continuous improvement and differentiation.
- Scalability and flexibility: Platforms offer scalability by allowing businesses to expand their offerings rapidly without significant investment in infrastructure. Additionally, platforms provide flexibility, enabling businesses to adapt to changing market dynamics and customer needs more efficiently.
- New revenue streams: Platforms can generate revenue through various channels, such as transaction fees, licensing, subscriptions and advertising. By leveraging the ecosystem’s growth, businesses can tap into new revenue streams that were previously untapped.
Implementing Platform as a Product Strategy
Now that we know the value, let’s dive into how to implement this practice. It starts with identifying the core product or service that will serve as the foundation for the platform. This could be an existing product or a new offering designed specifically for the platform. Align that product with your business goals and target market.
Next, look deeper into that target market and define the ecosystem. Determine the key stakeholders and partners who will participate in the platform ecosystem. Consider the value they can bring and how they can benefit from the platform.
Once that’s established, the next step is fostering collaboration with your relevant stakeholders. Provide tools, resources and support to encourage developers and partners to build upon the platform. In the long term, seek to create developer communities to foster further collaboration over that platform and put the power in the users’ hands to make that platform their own.
Additionally, be sure to offer an array of APIs and SDKs, and establish clear and plentiful opportunities for integration for your platform to organically expand and intertwine within a larger tech ecosystem.
Last, once your platform is established, realize that continuously evolving is a key part of the strategy. Platforms require continuous improvement and adaptation and should be treated as any other evolving product strategy would be. Regularly gather feedback from users, developers and partners to identify areas for enhancement and continuously prioritize new features.
In the End, It Won’t Solve Everything
It’s worth noting that while the platform as a product strategy has emerged as a powerful approach for businesses to drive innovation, foster collaboration and unlock new revenue streams, no one approach will ever fix your developer productivity and underlying business success.
Identifying and working through your organization’s problems are always a key first step. An approach is meant to amplify what’s already working; it’s not an end-all-be-all for the guaranteed success of your products. However, as the digital landscape continues to evolve, adopting a platform as a product strategy will become increasingly crucial for businesses seeking to thrive in the digital age.
