SmoothSpan Blog

For Executives, Entrepreneurs, and other Digerati who need to know about SaaS and Web 2.0.

Platform Vendors Have to Be Switzerland

Posted by Bob Warfield on October 1, 2007

Platforms are big news these days.  Everyone wants to be a platform:  becoming a platform is even part of Yahoo’s plans to turn the company around. 

What do you look for in a platform vendor?  Yes, the features and functionality provided by the platform are important.  And yes, the community that is already there is also important.  But what about how a platform conducts itself?  Think of a platform like the popular notion of a Swiss Bank:  an extremely safe place to put your faith and assets.  A place that has no interest whatsoever in anything but safeguarding those assets.  Most platforms are not like Swiss Banks.  They are bent on World Domination.  They get confused about their loyalties when greed sets in.  They start to compete with those who placed their trust in them.  Those are the platforms you want to think twice about betting on.  Consider what it will be like to try to make a living on that platform, or to commit your data and energy to using the platform. 

Platforms often come about because a great application started a frenzy that others wanted to be part of.  Facebook is in that category.  We’ve yet to see whether Facebook will be a friendly platform owner, or predatory, but it’s something folks wonder about for obvious reasons.  Zuckerberg is saying some of the right things, at least, when he suggests that widgets should have a life both on and off Facebook.  That implies he doesn’t insist on total domination.  On the other hand, some are afraid that at least other Social Networks like LinkedIn have reason to fear.  Yet, the other Social Networks are direct competitors, not consumers of Facebook’s platform, so isn’t it kosher to fire a shot or two in their direction.  It’s still too early to tell if Herr Zuckerberg will be a taciturn Swiss Banker, or whether he’s bent on World Domination.  I am cautiously optimistic about the early signs.

The Apple iPhone is another great-application-begets-platform story, and one that seems to have gone bad.  Clearly, Apple is not acting as Switzerland here.  They are bent on world domination.  In fact, their weapon of choice, “bricking” of iPhones, has sparked a startling backlash where once there was nothing but raves.  Steve Jobs does not want to nurture you on his platform, he wants to control your every thought and action.  I’m sure he feels it’s for your own good, but is this what we want from our platform vendor?  I should say not, and its been a long time since a killer app came to roost on Apple’s platform as its first and only hunting grounds.

Still other companies are in the odd role that their admirers beg them to be platforms, but they have no intention of sharing any part of their pie.  eBay has always had the view that they owned every penny of opportunity surrounding their platform.  Many have tried to join on, but eBay itself makes that all but impossible.  It isn’t surprising, their Disney executives grew up on the idea that Mickey was a franchise, not a platform, and nobody was entitled to a piece of Mickey’s pie.  Apple is very similar, particularly in view of the latest iPhone shenanigans.  In Apple’s case, they’re control freaks for the sake of their conceptual integrity, whereas with eBay, it’s just business.

Microsoft gives us an abject lesson on platform owners who are not Switzerland.  It started innocently enough with things like BASIC and DOS, but soon, Microsoft wanted to compete with everyone, taking full advantage of their platform in every way they could to do so.  For a while in Silicon Valley every VC pitch had to include a discussion of why Microsoft wouldn’t just take your business away when they wanted it.  Arguably the strategy worked well for a time, but they seem to have reached the limits of it.  I see the last gasp as their abandonment of all things Java in a tiff with Sun over who could own the platform.  Microsoft will say they had little choice, but they’ve pursued it as a bit of a scorched earth policy by working overtime to ensure that the Java web and the .NET web are as incompatible as can be and still call it the web.  Consequently, they lost the hearts and minds of many who would embrace platforms.  Arguably, very little of the current cloud computing renaissance involves Microsoft as a result.

In the land of Marc Andreesen’s 3 kinds of platforms post, he mentions several of the third kind including Ning, Salesforce, and Second Life.  FWIW, I find Andreesen and Ning fit the Swiss Banker profile pretty well.  As we look back over Andreesen’s history, he seems to have done a good job nurturing platforms along the way.  Ning has no particular Social Network of their own, except to help other Social Networkers to use Ning more effectively. 

Salesforce is an interesting case.  Clearly, the other Marc (Benioff), is bent on world domination.  The question is to what degree he would compromise his platform aspirations to do so.  Perhaps he can turn into the Swiss Banker over time, but it seems an unlikely role at the moment.  He came up through the ranks of Oracle, which is not typically a breeding ground for the Swiss Banker mentality.  Still, we should watch closely and reserve judgement for a bit.  There are signs of life around Force, but it remains to be seen whether they’re higher forms of life, or just people looking to siphon off the halo effect of Salesforce’s community and greatness. 

Adobe has been a platform owner for some time with pdf and Flash.  But they’re also an application company as we were reminded by the announcements surrounding their acquisition of Web 2.0 word processor BuzzWord.  As Scoble says, they’re going for Microsoft’s throat.  But does this mean they might one day go for their platform user’s throats too?  I suspect not.  Adobe has always been very deliberate in their actions and they’ve done a good job nurturing their platforms.  BuzzWord is happening at a time when Microsoft essentially owns the document world.  Choosing to go after one of the giant platform monopolists doesn’t seem to me like bad behaviour for a platform vendor.

The ultimate Swiss Banker is of course Open Source.  How can you go wrong here?  The platform you’re depending on has been placed in the Open Source community and so how bad can things get in terms of the owner/creator being the Anti-Swiss?  Hence we see why so many prefer Open Source.  Perhaps Open Source is a way for Marc Benioff to gain full trust, though I have a terrible time seeing Force ever being an Open Source platform.  It just doesn’t seem like their style.

The next time you’re shopping for a platform, remember that platforms involve a big investment.  Try thinking of it in terms of Swiss Bankers.  Which one fits the profile?

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12 Responses to “Platform Vendors Have to Be Switzerland”

  1. [...] He is write.  I’ve written about this issue with respect to platforms when I argue that platforms have to act as Switzerland.  When a platform competes with it’s customers, that’s problematic.  When a [...]

  2. [...] service that guides people to that content. Bob at Smoothspan is entirely correct when he says that platform vendors have to be Switzerland, that is neutral providers whose function is to provide a home to others. As soon as they start to [...]

  3. Anonymous said

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    Excellent post. Keep it up!

  4. [...] written also about how platform vendors should behave like Switzerland.  Apple most assuredly is not behaving like Switzerland.  Under the banner of making insanely [...]

  5. [...] the Salesforce apps as a platform.  What remains is to see if Salesforce can behave itself and act like Switzerland the way a platform vendor is supposed to.  And don’t overlook what kinds of data will now be [...]

  6. [...] Amazon.  They should stay low-level and as language/OS agnostic as possible in order to remain as Switzerland.  Let Heroku-like offerings be built on top of the Amazon infrastructure by others.  Amazon [...]

  7. [...] Amazon.  They should stay low-level and as language/OS agnostic as possible in order to remain as Switzerland.  Let Heroku-like offerings be built on top of the Amazon infrastructure by others.  Amazon [...]

  8. [...] Posted by smoothspan on June 12, 2010 Union Square VC Brad Burnham’s post of the same name, brought to me by Fred Wilson, says we should think of Web Services (I like the Platform name better) as Governments.  This is something I’ve been saying for years with my posts about how you want platforms that act like Switzerland. [...]

  9. [...] developers should seek platforms that act like Switzerland; something Warfield has apparently been saying since 2007. The government-platform analogy is good, albeit imperfect. The most salient aspects of the analogy [...]

  10. [...] Union Square VC Brad Burnham’s post of the same name, brought to me by Fred Wilson, says we should think of Web Services (I like the Platform name better) as Governments.  This is something I’ve been saying for years with my posts about how you want platforms that act like Switzerland. [...]

  11. [...] developers should seek platforms that act like Switzerland; something Warfield has apparently been saying since 2007. The government-platform analogy is good, albeit imperfect. The most salient aspects of the analogy [...]

  12. [...] developers should seek platforms that act like Switzerland; something Warfield has apparently been saying since 2007. The government-platform analogy is good, albeit imperfect. The most salient aspects of the analogy [...]

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