While the term "platform" can have a broad range of meanings in just the technology market, the focus of this article is API-centric cloud platforms. These provide software functionality that enable other developers to build complementary technologies, products, or services.
These developers can be internal to your company, can be working for your customers, or can be part of a partner organization. They can build capabilities that interface to and impact the UX (user experience), business processes or workflows, underlying data, or infrastructure (such as IaaS providers like AWS).
Platforms enable companies to create more value and even new business models by digitizing their services and connecting with other similarly enabled entities. For example you can connect with other platforms and/or different channels where your customers are consuming digital services: AWS, Salesforce, Uber, Square, Microsoft (O365), SAP, WeChat, Slack, etc.
These business models can include direct revenue from customers and partners of these externalized services. They can be based on an up-charge to the cost of your core products (for customers) or the volume of API calls. However ideally, especially for partners, it should be based on the value of the specific use cases that are enabled by using your APIs.
Yet what is often overlooked or at least undervalued is the indirect revenue impact of extending the overall value of your offering, as can it now be made up of both your products and services and the complementary products and services of your partners. This can lead to benefits such as a higher competitive barrier and a higher base cost of your core products.
A platform can also enable a variety of partners that can help you build your company: integration partners, supplier partners, product partners, strategic / consultant partners, etc. This platform partners ecosystem enables viral growth: the more APIs being exposed and the more data that is accessible leads to more paying partners creating more applications, integrations, and value; which leads to more customers using (and paying for) your platform and generating more data (and you externalizing more APIs); which leads to more paying partners creating more applications, integrations, and value …
Later technologies such as blockchain could usher in new era of api-driven business models as Joe Liebkind contends. However much like the same way that 25 years ago we couldn’t imagine the value and capabilities the web delivers today; we have little ability to understand how the proliferation of blockchain’s distributed, trusted, transactional capabilities will impact our economy.
Whether building from scratch or undertaking the long, difficult journey to transform current (often on-premise often monolith) software to being services and API based; it's going to be tough.
In short, you need to consider your platform business offering like any other business offering: what are the objectives or strategy, how are you going to design, build, test and deliver it, how will your customer use it, and how will you manage and maintain it throughout its lifecycle. (Themes emphasized by Carol Russell and Forrester’s Randy Heffner)
Another way to consider the business plan for an API or platform is the API Model Canvas (created by Manfred Bortenschlager based on the Lean Canvas).
Overall us product owners and GMs need to have an opinion on what the market wants; and consider how to build, buy, or partner our way towards that vision. However unfortunately many of us just think about what we can build next and even worse what is the next incremental improvement to what we have already built (10% faster, 10% less bugs).
Platform strategy can also be considered through the lens of developer experience. In an often quoted 2012 speech by John Musser at the O’Reilly Open Source Convention, he said that the
5 Keys to a Great API are
· Provide a valuable service
· Have a plan and a business model
· Make it simple and flexible
· It should be managed and measured
· Provide great developer support