Everyone calls themselves a software platform. Are they really a platform ?

Lately, I have been working on defining what is a software platform. What characteristics a software ecosystem should have to be called a platform . Every vendor that builds and sells software calls itself a platform.  So what differentiates a app , a product, a service vendor from a platform vendor.  Capturing some ideas to help identify a platform company or develop a platform strategy. Lets start with the basics :

• Platform - Codebase of a software system that provides capabilities that are shared by apps that interoperate with it along with the interfaces through which they operate.
• Apps - A software module or a plug-in or a sub system that connects to the platform to add and expose capabilities
• Architecture - A blueprint that describes the entire ecosystem which comprises of the platform, the apps, the interfaces used by the apps to connect and integrate with the platform.

If one asks for a list of platform players the usual suspects come to the forefront - Amazon, Google, Apple, eBay, Facebook, Android.  However, if you look deeply these vendors didn't start out as a platform. They were all standalone services that subsequently over time got transformed into a platform by doing something special - adding complementors . These complementors produced mini software ecosystems that augmented the capabilities of the core platform. E.g iOS has app developers, Kindle has eBook publishers, Google has advertisers etc.  The companies that failed to make this transition did not last long - Blackberry, Kodak, Nokia, Palm etc. This defines the first and the most important characteristic of the platform - multi-sided . There should be at least two distinct groups that interact with each other using the platform . A relatively simple analysis of the top software players highlights some other characteristics of a platform . Here are a few critical ones :

• Network effects : Facebook or linkedin or uber is a prime example. They all follow Metcalfe’s law
• Lock-in : These platforms are sticky. Competition is so high that you keep adding “stuff” to discourage the users from opting out. E.g Uber
• Envelopment : Platforms players over time start to envelope capabilities of other platforms. E.g Android phones offering cool camera capabilities
• Greater than one side with multiples for the top three characteristics : The most important attribute.  E.g’s Travel sites with users like us and airlines on the other side - there are network effects for airlines & end users , there are features that make the whole experience sticky  and there are capabilities being added to provide a holistic travel experience such as vacation packages which are disrupting an entire industry. Amazon’s book publishing business , Apple’s music business, all peer to peer collaborative consumption companies like Airbnb , Kickstarter etc reflect the multipliers for network effects, lockin and envelopment on every side of a multi-sided platform.

One could go on and on with examples of platforms and what defines them. This is a summarized list of some of the key attributes to help you identify a platform vs a product/ service/ app player and also shape up your platform strategy .