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 idea of a platform as a product 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!
Let’s explore the concept of the “platform as a product” strategy and its potential to revolutionize business operations.
Understanding the Platform-as-a-Product Strategy
“Platform-as-a-Product” refers to a strategic approach in which a company builds and offers a digital platform as its core product. This platform is a foundation for various applications, services and interactions, which enables 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 create network effects, where the value 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 successfully implemented a platform as a product strategy:
- Amazon Web Services (AWS): 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 thousands of third-party services, driving innovation and growth.
- Apple App Store: The Apple App Store created a platform that connects developers with millions of iPhone users (and now applications for nearly all Apple’s products). 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: Another example, that one may not think of at first glance, is Airbnb. 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 accommodation options. Airbnb’s success lies in its ability to create a robust ecosystem that benefits hosts and guests.
- Salesforce: Salesforce 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 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 a Platform as a Product Strategy
Implementation starts with identifying the core product or service tol 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 up, 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 bring and how they can benefit.
Once that’s established, the next step is fostering collaboration with 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 puts 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.
Lastly, 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. Regularly gather feedback from users, developers and partners to identify areas for enhancement and continuously prioritize new features.
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 is 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 evolves, adopting a platform as a product strategy will become increasingly crucial for businesses seeking to thrive in the digital age.
