Power of the Platform

Article written by Vladimir Kovacevic, July 2015

There are many different types of computing platforms, and we are all more familiar with them than we think. In fact, we all have one of them with us all of the time – it’s our smart phones.

Facebooktwittergoogle_plusredditpinterestlinkedinmailFacebooktwittergoogle_plusredditpinterestlinkedinmailby feather

As a CTO of a software company I spend a fair bit of my time thinking about the technology. More specifically, about how to make the legacy technology work with current technology and how to set the foundation for the technology of tomorrow while at the same time enabling the business to grow and evolve in new and sometimes unpredictable ways. Even with a very specific focus on North America and asset based finance there are so many variations and combinations of how business models and systems fit together that it’s nearly an impossible task. That’s why I get really excited about companies that provide services or solutions that make a positive and real difference to the business. One such company is Salesforce.

While most people immediately think “CRM” when Salesforce is mentioned, the reality is that the Salesforce CRM is just the tip of the iceberg and that the real value lies beneath what’s immediately visible. I like analogies and examples – and the best one I have for Salesforce is to think about a company that invented this great and revolutionary engine that has many different applications and then in order to demonstrate the greatness of the engine put together a car. Would you classify this company as a car company? I think not. Well, thinking about Salesforce as a CRM company is the same thing.

In order to understand the importance of the “engine” and why Salesforce is not a CRM company, it is also necessary to understand the natural evolution of a software company and the software industry as a whole. I always think of it in terms of 3 specific phases.

Custom Solutions

In the early days of automation it was all about creating custom, “one-off” solutions that would meet specific business needs and address the current business model. Given a good understanding of the business problem and having a capable and competent vendor, businesses were able to create some outstanding and very unique solutions. These solutions were excellent at what they did and many of them are still around. We all know them as legacy systems. They operate without fail and they do exactly what they were designed to do. While that’s their greatest strength it’s also their greatest weakness. They do exactly what they were designed to do. This means that, without exception, these solutions are not able to adapt to new and changing business needs. Who is willing to invest time and resources on a project to add new features to a COBOL system? Especially when they know that it will never be able to do what new modern system can do – no matter how much time and money is spent.

Products

We are in a golden age of business software products – most of the systems we use in business are product based and created by a vendor that is specializing in a type of business that we are in. The main advantage of a product over custom solution is that the system is not made for any specific client. It is made for a specific industry and solves a number of use cases by offering configurable and customer managed setup. This means that vendors can keep investing into R&D and improving features, speed, security and making the product better without worrying that they will affect the business in a negative way. Just like in any industry, market forces start to dictate the pricing and only the best products survive. As a whole this is great for the business – it promotes lower operating costs and allows business to continuously improve and evolve the business model. However, this leads to a more complex business model and the need for more software products that need to be interfaced to each other and/or legacy systems in order to provide a smooth transition from one part of the business to another. It doesn’t take long to end up with a fairly complex maze of products and legacy systems that are working well and providing great value, but are very hard to replace.

Platforms

There are many different types of computing platforms, and we are all more familiar with them than we think. In fact, we all have one of them with us all of the time – it’s our smart phones. So, what makes the platform different from a product? In today’s terms, platform is anything that developers can build upon. So platforms provide an environment that in some way enables and simplifies the building of products. When it comes to our smartphones we know the products as apps.

So, why does everyone love apps? Well, for one – there are so many of them and they simplify and enhance our lives in such radical ways that they are sometimes eliminating entire industries. Having to choose between buying a $350 Garmin navigation that will be out of date within 12 months and downloading a free Google maps application that will always be accurate and never needs an update is not really much of a choice. It’s simply not a fair fight. The Google app has an entire platform to rely on – it doesn’t have to worry about the costly hardware, the sensitivity of the touch screen, the Bluetooth connectivity or any of the things that Garmin has to do before even thinking about having a product.

That is the power of the platform. We download new apps and they just work – we don’t have to configure them and make sure that they know how to use a camera and that the two buttons on the side control the volume. It all just works.

App developers love it – they can focus on what really matters and what they are good at. They can solve a problem and address a need that they identified and get their product to market very quickly. Users love it, because costs are low, selection is high and if it doesn’t work we just replace it with another app.

But that’s the world of consumer apps.  The world of business apps is much more complicated and such things are not possible. Correct? Not really – given the right platform the same principles apply. So, what is the right platform – does it exist today?

More than 100,000 organizations and over 2 billion transactions per day say that Salesforce is exactly that. Salesforce is the company that has the “engine” and in order to demonstrate this great platform they built a killer CRM application on top of it. That’s why it’s wrong to think of Salesforce as a CRM company – it’s so much more.

With thousands of apps available in the Salesforce app marketplace businesses are able to pick and choose the ones they like and transform their business processes overnight. The entire platform is hosted on a cloud, always available and secure as well as instantly available on our favorite other platform – the smartphone. No integration, no development – it all just works.