Wednesday, November 14, 2007

Everyone wants to be a platform

From the New York Times
[Marc Benioff , CEO of] wants to turn Salesforce into a platform like Microsoft’s Windows operating system, a product so popular that it is the foundation for a veritable ecosystem of software developers [Emphasis added].

“In our industry,” he said, “the only companies that really make it big move from being a killer app to being a platform.” [Emphasis added]

But whether he can pull off that strategic leap is unclear. Salesforce has started to look less revolutionary as larger, more established companies have adopted its leasing model. And as Mr. Benioff himself notes, few software companies successfully make the move to platform status.

Yet that jump is critical to Salesforce’s long-term success. Its share price has tripled in three years, showing that investors are counting on success beyond the market for customer- tracking software.

“It’s been very impressive what Salesforce has pulled off,” said J. Bruce Daley, editor of The Enterprise Software Observer, an industry newsletter. “But I think this is a company about to hit a wall.”

Like others, Mr. Daley declared it “logical” that Mr. Benioff would try to use its beachhead in managing customer information to establish itself as a platform, a kind of holy grail of the software world [Emphasis added]. The plan is to persuade outside programmers to do what Salesforce cannot afford to do on its own: round out the company’s offering of products so that customers can lease a greater range of business tools, like payroll and accounting software.
Of course that's what Facebook is also trying to do, and that's the reason Google has formed an alliance of non-Facebook social software companies (including MySpace) to define an open standard for social software systems. Google has also just announced its open phone system, which it hopes will become a cell-phone platform. Google doesn't so much want to own platforms. It's more concerned that no one else own platforms. When a company owns a platform, (like Microsoft owns Windows), it makes life that much harder for anyone else wanting to make money via that platform. See Waiting for the Google Phone for more.

Platforms have made it into the broader consciousness of the community.

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