Over the last couple of months, I have noticed several prominent software companies announcing new platform offerings. This goes beyond a marketing tactic, as most are backing the move with substantial new capabilities and tooling to add “programmability”. These extensions are meant to appeal to solution builders, in addition to their existing product users. While the companies will still offer packaged products, they are opening up their underlying software services for outside developers to build their own custom applications. The rationalization is an expectation that this will drive incremental revenue from usage fees, as developers launch brand new businesses or internal teams at enterprises tackle adjacent use cases. Also, some leading SaaS companies haven’t rolled out full platform offerings, but might benefit from it. In this post, I will examine what makes for a productive platform play, several recent examples of this trend and how it might apply to other point solution providers. The platform potential of a software company is an important consideration for investors. If executed successfully, it can substantially magnify the long term growth opportunity for a company’s stock.
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