The Platform Effect

Apr 23 2012 | Author: Krassi Genov

Facebook has made a move – either bold or defensive, depending on whom you talk to – to acquire a two-year old company with roughly 10 employees for a hefty $1 billion. Dr. Evil, eat your heart out! Now, $1 billion is roughly the valuation of the New York Times (a venerable 116-year old global media conglomerate), the alleged price tag of a treatment for Lou Gehrig’s disease, the amount that BP pledged last year to kick off the Gulf cleanup, etc.

So what happened, some might ask? ‘Platform happened’.

Consumers (and many businesses, I might add) have found their version of Second Life (anyone remember those guys)? But instead of clunky avatars floating around in the ether, folks now have a fully integrated platform in Facebook, allowing them to share their lives (or brands) with 850 million-plus others.   Facebook is now so deeply entrenched in our lives that it has almost become an extension of our existence. Our lives are an ‘atomized scrapbook’, Facebook is a platform on which to share just about any thought, capture any opinion that comes to mind, and even get news, too. It is replacing email, IM and chat, community forums, driving most photo sharing sites out of business, and soon will likely become a true e-commerce platform.

It has also managed to kill the Web site as we know it. To say that a business today has to have a web strategy frankly sounds a bit pre Y2K.  Now online strategy involves not only Web, but progressively social media (integrated, communal, viral, instantaneous) and mobile.  The consumer pull largely happens on those mobile and social platforms, and less and less on what we used to call the World Wide Web. Facebook, adopting the ‘hacker mentality’ is constantly on the lookout to design, test and deploy (or in some cases acquire) new pieces for its omnipotent platform.   And Instagram had the perfect score, showing a remarkable growth rate of its platform – 30 million mobile users in 2 years on iOS alone, additional 5 million in less than a week since it became available on Google Play (aka Android).

But Instagram’s success is not a fluke. It is a best practice of taking the concept of a development platform which keeps innovating.  There is an interesting presentation that was made available by Instagram before the acquisition.  It has some interesting data points on users, business philosophy, databases and programming languages and equally important, scalability. The world will never be the same if two (yes 2) back-end engineers can scale a system to 30 plus million users! A few years ago this would have been perceived as impossible, yet here we are. If there is one thing that businesses can take away from this, it’s that scalable platforms are what matters.

It is the cloud platforms that allow for a true scalability, dynamic allocation and internal innovation. Pre-cloud, it was inconceivable for businesses to turn up a new service or features, or test it on a segment of customers with a flip of a switch.  With cloud platforms companies (or individual teams) can constantly be trying multiple configurations, running stress tests, testing compatibility, performance, and response times. Only the scalability of cloud computing allows for what some say is the perpetual beta, where users are treated as co-developers and new slivers of the product are being released almost every day.

The aggregate results make up the DNA of a true development platform that can be collaborative (social), promote innovation and empower visionaries in any part of the business. Dream up - you might be the next Instagram!

Posted In: Cloud | Tags: Facebook, Instagram

Krassi Genov

Krassi brings an extensive background in product marketing, competitive intelligence and knowledge management. Prior to joining Pegasystems, Krassi held senior marketing roles with various technology companies including RightNow Technologies, Intelsat Ltd, Software AG and NTT Verio.

 Twitter @krassig