What's the ROI of your Platform Strategy?
The B2B tech community is investing heavily in platform strategies, recognizing the growth multiplier realized by those that have mastered it.
Wanted to this community to know that @Anne McClelland, VP Research and Advisory for XaaS Channel Optimization, and I will be exploring the business challenges associated with defining and executing effective platform strategies in a session called Partners Prefer Platforms: How is B2B Tech Leveraging Platforms for Accelerated Growth? at TSIA Interact on Thurs Oct 22. By the end of the session participants will identify the critical element for platform success and use the partner-optimized offer decision framework to build engaging XaaS platforms.
Whether you plan to attend the session or not, please do weigh-in to this short poll The Power of Platforms.
We look forward continuing the dialog on this business critical topic.
Answers
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This sounds very interesting. Understanding the platform business model and how one fits into it is critical. I am most interested in learning more about how value is created and exchanged in these models. They are systems, like ecosystems, and I wonder if value plays the role in business ecosystems that energy plays in natural ecosystems.
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A consideration that we have found helpful is to treat "Platforms" as "Products". With this mind set, the principle is to follow a 'product lifecycle management' approach and consider: strategy (short-, medium-, long-term); evolution/development/integration roadmap; commercial justification (business case for investment); requirements backlog prioritised to realise optimum commercial/financial/strategic impact; and withdraw/retirement/migration.
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I look forward to the session! We are experimenting with partner platform sales which have some the following characteristics:
- Some product backwards compatibility with the legacy system to reduce the up-front costs to existing/loyal customers. This makes it easier for our partners to call on our long-time customers and build the business case for the transition to the latest platform. Also holding on ground with customers on not building backwards compatibility with all systems/components so partners can transition service agreements more easily to the new model.
- Lower-cost-to-entry platform solution with features aimed directly at specific customer stakeholders seeking a minimum, but a necessary investment. In a 'bundled' solution, we explore vendor/partner-operated service model vs. customer to ensure a service-fit. Ideal customer stakeholder are new customers or customers in adjacent markets. Together we feel some challenges with this particular strategy because we're so oriented to up-sell and drive up the total sale initially and are new to XaaS and the opportunity to grow contract value over time through expand selling (very new!).
- As the OEM, balance between incremental software feature additions to the platform plus new hardware components (partners shine here), new system integrations (between third parties and/or private label), and refined service product descriptions our partners can innovate/build-upon. Partner education, clear definition of which 'bundled solutions' are targeted for specific customer business outcomes, and complex offer build and pricing support remain areas for continuous improvement!
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