Tech companies with platform business models have consistently outperformed others in the past decade or even more. Hence, every company is now aspiring to be a platform company.
As a part of the custom research powered with Xebia, Kiran Madhunapantula, co-founder and COO of coMakeIT, part of Xebia, and Sundar Sarangan, Executive Director, ISG Research, engaged in an insightful discussion.
The talk moderated by Runki Goswami, Chief Marketing Officer, Xebia, revealed in simple language, several complex but important paradigms in platform development.
The talk traversed from the evolving definitions to attributes that define platforms to the future of platform development.
Here, in part one of the podcast transcript, are some excerpts from their discussion on what a platform is, why it is important, and the creative role coMakeIT is playing in helping their clients build long-lasting platforms.
Why are software platforms so important?
All of us have seen the world of products. These days, software product manufacturers have realised that the ecosystem is much more important than isolated products. When two or more ecosystem players in a platform come together, they achieve their business objectives in easier, faster, and better ways. Hence, many companies are keen on inculcating platform thinking.
What’s a platform and how does it differ from a product?
A product is developed once to be sold many times to end users. Whereas a platform evolves and delivers continuous value over time for a community.
It is very important to understand the difference because it gives us an awareness of where we came from and insight into where we are going.
We came from the product world and are transitioning into the platform world.
What is your opinion on strategies around platforms?
Research shows that platform-based companies, especially software technology companies are delivering a far greater value. Hence, investors are more interested in them than in classical product companies. Naturally, every board or CEO is analyzing their technology operations and pondering whether they should have a platform strategy.
Building on this trend, it was a great opportunity to work with coMakeIT and their parent company Xebia to understand the evolving difference between a platform company and a product company.
To help us better understand what a platform is, the important question to answer is- “What is not a platform?”
Coming from a product development background, the key requirements I noticed are – One, A platform should address an ecosystem. And two, the platform should allow the ecosystem players to come together and leverage it as an orchestration mechanism. If we think something is a platform and if it is not fulfilling either of the two requirements, then it is actually not a platform, but a product.
So, the important distinction is in the ecosystem, the community the platform is catering to, vs just the user base associated with the product.
Any other important similarities and differences?
The industry-accepted differences are these:
- Products have users, whereas platforms have communities
- Products are developed once and sold many times. But a platform evolves and more importantly allows other players in the ecosystem and use it as the base to innovate and build it further.
So, a platform is more of a fundamental or core capability and there may be many products based or built on it. A product is more discreet and a face of what is sold.
Yes, and even unrelated products can be orchestrated by a platform.
How does coMakeIT help its clients transform from a product business to a platform business? To help us understand the mindset of a platform company, give us a few examples from your customers.
One of our customers’ businesses was originally about renting or leasing books, furniture, etc for students and schools. In due course, they realized that they could contribute a lot to the education ecosystem by automating their processes using software. To embark into the EdTech domain, the company collaborated with coMakeIT. We, as their partner, developed a platform with them that allowed them to contribute to EdTech by providing content, as defined by schools, users, or students, as a service. From a typical transactional business, they transformed into a collaborative software platform. This is the best example that I first think of, of business transformation using software.
That’s a great example. And some of your other examples show the nature of the work you do with your clients. It is closely related to evolutions in technologies like platforms. It is hard to put an end point to a phase or deliverable and similarly the relationship too. The relationship too keeps evolving and providers like coMakeIT should be fundamentally more collaborative, agile, and flexible. How does coMakeIT approach these relationships from a service provider perspective?
As they say, when you don’t have it inside you don’t have it outside, while building a platform, we need to think from outside to inside to provide something from inside to outside.
This means that while embarking on the journey of developing a platform, you need to have two things: One, your plan of transforming a product into a platform or a concept into a platform, and two, a development partner who understands your philosophy.
At coMakeIT, we approach our clients with our principles of co-development and cocreation. As long-term partners we also want your platforms to stay long-term with your customers.
While developing a platform, having a long-term development partner is quite important because the knowledge of developing the platform is also very critical for the whole affair.
I found that truly unique when I learned as a part of my research.
The other thing that stood out is the way your work with clients aligns with the platform mindset.
Please wait for the next part of the discussion to learn more about platform mindset and the attributes that make it. If you have a concept to build an amazing platform or would like to transition your product to a platform, talk to us.
*The talk has been edited for clarity and length