SmoothSpan Blog

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

Get Ready for the Affinity Platforms!

Posted by Bob Warfield on April 17, 2008

What’s an Affinity Platform?  That’s what I’m calling the mix of a Cloud Computing Platform with an already-successful application.

Geoffrey Moore says that you dare not launch a platform until you have a successful application.  There are, of course, counter-examples to this.   Amazon Web Services is my favorite case where there was no already-successful application.  Amazon EC2 and S3 had little to do with Amazon’s core business from the perspective of the customer.

But in the main, Moore is right.  Why adopt a platform unless there is synergy beyond the platform making your developer’s lives easier?  If it is attached to a successful application, the platform can offer so much more.  For starters, customers hope to gain some demand generation (e.g. sales leads and faster adoption) by drafting behind the already-successful application.  That’s very valuable when you look at the cost of acquiring customers for most businesses. 

Who Has An Affinity Platform?

Intuit are the latest to the party.  See my breaking news blog post for details.   The application here is QuickBooks, and to a lesser extent QuickBase (lesser only because there are fewer customers!).  QuickBooks has a base of 3.6 million users according to Intuit, so it is indeed a very successful application.  What Intuit has done with their SaaS platform is to provide instant integration to data in their SaaS QuickBooks, as well as to make the community available to developers on the platform.  It’s hard to imagine not wanting to tap into that SMB installed base if you are building something remotely business-oriented.

Salesforce.com is probably the original Affinity Platform (Cloud Computing + Successful App).  Force.com lets you build apps that seamlessly connect to Salesforce’s CRM data.  They have a thriving ecosystem in terms of numbers, but most of the developers I talk to find the cost of Force.com is prohibitive to build a company around.

Facebook:  Yep, they have a platform, hugely successful applets, and a wildly successful application.  The formula works on the consumer side too, not just business.

FlickR just announced a new website dedicated to developers, and they’ve had API’s for quite a while.  I’m not sure I would quite call it a platform, but a healthy set of API’s to help spur an ecosystem is a worthwhile start for any company that owns a thriving application whose data is online.

Who Should Get An Affinity Platform?

Amazon:  Funny, but why wouldn’t AWS tie in much better with the retail business?  Perhaps Amazon would say it does, and that is somewhat true, but the tie in goes out not in.  I can use the billing service (outbound to me), but I can’t write cool apps that work well for Amazon’s retaillers.  What if, for example, I wanted to write an app that gives the retaillers up-to-the-minute competitive pricing and let’s them adjust their offering prices in real time? 

Adobe:  I was thrilled to see Adobe get involved with the Intuit announcement.  But, there’s a lot more they could be doing.  They have a growing coterie of SaaS apps including BuzzWord and PhotoShop Express.  They’ve got Flex, which is very valuable for any platform.  It’ll be interesting to see how Adobe plays it.  If they run too headlong out there, they may be in competition with those they want on their side.  For example, both Intuit and Salesforce are involved with Flex.  Sarah Perez has a great post on Adobe’s Online Empire.

Oracle/SAP:  Interesting conundrum for these mega-players.  Traditionally, they want to own an awful lot, so it’s a bit hard to completely trust them.  Yet, they clearly have ecosystems.

Google:  Yes, they have a PaaS offering in AppEngine, and a killer app in Search.  How can they get the two together?  With Yahoo cutting search engines out, Google can do the opposite and be more inclusive.  One of the issues for interactive apps is getting everything indexed.  Dynamic content is a lot harder than static, and indexing inside something like a Flex application is also hard.  Google could fix these problems in interesting ways.  Search inside a database is also a common problem that Google has the means to fix.

Microsoft:  Another dilemma for these guys.  They’ll argue they’re already doing it (as big companies often do), but the problem is that they don’t really have a cloud platform yet and most of the data from their successful apps is not in the cloud and is therefore not very accessible.  I think the best starting point is Exchange and Sharepoint.  Again, they’ll argue they already do this.

EMC:  You’ve got a ton of backups from people’s PC’s and small businesses inside your cloud via Mozy.  Backup is your killer app.  What can you do for them as a next step?  What apps would you write for people to access if EMC had a platform that tapped into this stuff?  Seems like it might make the ultimate desktop/mobile/whatever else syncing environment if nothing else.  Maybe you could also seamlessly migrate people to cloud apps if they wanted to go there.

Anyone else that has a highly successful application with tons of data in the cloud should be looking at how to leverage that in the platform world.  BTW, you don’t have to build a soup-to-nuts platform, you just need a way for people’s apps to be enabled to what you have to offer.  Most of the app may even run somewhere else and just call on your platform for services. 

eBay:  Hugely successful app, but seemingly plateaud.  So many things work well as auctions, eBay could launch a platform play.  For example, frequent flyer miles and other affinity programs.  I can’t remember the last time I got a First Class upgrade from my miles.  It should be possible to bid miles and auction off the benes to whoever bids the most.  Better for customers as they can get stuff they need.  Better for airlines as they get the miles off their books faster.  Better for eBay because it opens up whole new lines of business.

Who Should Use an Affinity Platform:  Sales 2.0 Opportunity

Anybody that needs customers and demand generation for starters.  Forgot rewriting your entire app for any of these platforms.  What is a minimal module that plugs your business into the ecosystem?  Everyone I talk to that is plugged into Salesforce looks to them for this purpose.  They get two benefits.  First, there is a halo effect from being connected to a successful application and platform.  Second, they get sales leads from the ecosystem.

Network Effects

The Cloud Computing world is rapidly growing up.  There’s tremendous new functionality that’s been announced in just the last six months or so, and no doubt a lot mroe is on the way.  There’s been talk and concern about lock-in.  Overt lock-in isn’t going to work, but Affinity Platforms have a more insidious kind of lock-in. 

Ultimately, there isn’t just one cloud, there are many.  And, it’s costly to shift data between clouds.  The best advantage will be had if apps run in whatever cloud hosts the system-of-record data they need to operate on.  Companies like Intuit control hugely valuable data of that kind.  Once your app and customers are used to easily plugging into that data, it’ll be pretty hard to go elsewhere even though it will likely be technically feasible.

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