My first exposure to a software “platform” was back in 1983 when McCormack and Dodge introduced Millennium and started to migrate all its modules to have the same look and feel, extensibility, queries and other features. I was part of a team rolling out a wide range of functionality across refineries and other units at Petromin, the Saudi oil company. I quickly became a power user of the platform - able to deliver so much with so little programming. Like when we hit the wall as we realized the US centric HR module was not designed to handle multiple wives of employees – not sure why were we surprised I proposed an elegant solution using the platform tools. I was a huge fan, and thought John Landry, the EVP of Development was a genius (he went on to other successes at Lotus, IBM and beyond).
Things were primitive back then – green screen UX with data on VSAM files. The world has gotten better and better. And we have seen a much more expanded definition of platform. I heard Peter Evans, ex GE, now KPMG, present a couple of years ago about his research on 175+ platforms around the world. He identified 4 types in the exhibit below. (click on image to enlarge)
Not obvious how he classified them under each moniker, but the second group included most of the enterprise software vendors we know and love, and as you can see they have been overshadowed.
In the last couple of decades I have seen too many enterprise platforms where the owner would have done better developing their own applications. Instead they handed that opportunity to a variety of partners and startups on the platform and only did ok.
I have seen Microsoft develop dot.net and Azure ecosystems and Oracle do similar with its tools and PaaS. But I often wonder if both had invested more money and energy in their own applications, how much more competitive they would be.
I have seen SAP try with NetWeaver and more recently around HANA. And I can see why so many of its customers bitch and moan that their maintenance dollars would be better spent on their industry and other application functionality. Worse, SAP thought its service partners would use them to develop industry and other apps. Some did, the majority did unique customizations, which actually has led to a mess as customers cannot now easily migrate them to S/4.
What about Salesforce? After a decade only one vendor which used its platform, Veeva has gone public. Zuora may join it this year. Wait a minute you say – look at Apttus, CipherCloud, Gainsight, GreatVines, JobScience, nCino, and Resilinc? Yes, well known in startup and venture world, less so in the corporate world where dollars are spent. ERP via FinancialForce, Rootstock and Kenandy (the two recently announced a merger)? Products on the Force.com platform by Cornerstone OnDemand and Xactly?
Fair points but Salesforce itself has generated $ 35bn in revenue in the last decade. After a decade, is it unreasonable to expect revenues at these partners be 1X or 2X their own? Especially when 80% of the world’s enterprise applications are still on-premise and are impatient for cloud functionality beyond CRM and HCM?
My relative disappointment with enterprise platforms is one reason I was one of the few analysts who was not clamoring for Workday to open up its own platform. It did last year and I hope they set ambitious goals for partners who develop on its platform - make sure they are well funded, go after massive and underserved markets across verticals and geographies.
It’s time for enterprise platforms to set stretch goals. Consumertech has shown the way. The Apple AppStore is estimated to have generated over $ 125 billion in revenues in the last decade. Fulfillment by Amazon launched in 2012 will get there even quicker.
I want enterprise software vendors to excite young Vinnies to extend their own functionality. But I also want them to aim much higher and aggressively recruit and incent partners. So much white space to conquer.
