Category: Platforms

Salesforce, Facebook and Amazon

Marc Benioff, founder of Salesforce.com, posted an article on Techcrunch today titled “The Facebook Imperative“. In it he writes about what drove him to found Salesforce.com:

I quit my job at Oracle in 1999 because I couldn’t stop thinking about a simple question: “Why isn’t all enterprise software like Amazon.com?”

More than a decade after Benioff asked himself this question, it is still timely. Why is so much enterprise software ugly and difficult to use?

In the article, Benioff asks a new question: Why isn’t all enterprise software like Facebook?

Market shifts happen in real time, deals are won and lost in real time, and data changes in real time. Yet the software we use to run our enterprises is in anything but real time.

To address this, Salesforce has launched Chatter, a “realtime collaboration platform”.

Salesforce’s Chatter reminds me of an IBM commercial where an executive with magical powers can see into the future. When his colleagues excitedly ask him what he sees, he replies dreamily:

“Everything is integrated”.

Does this mean Skype will finally become a platform?

Yesterday it was announced that Skype was being bought from eBay and would once more become an independent company. For Skype fans such as myself, this could be good news. Although the desktop client has been improving steadily over the past few years, the business model hasn’t.

Skype has more than 400 million registered users. It has a  de-facto monopoly on VOIP. So why aren’t there donzens of desktop and web applications being built on top of the Skype technology? Why hasn’t Skype become a platform?

As a platform, Skype could solidify its hold on the market and it could make more money on SkypeIn, i.e. charging Skype users for calls to landlines. If it’s technically feasible, it seems obvious.

One answer might be that when eBay bought Skype, the underlying technology wasn’t included (which makes you wonder what eBay was smoking when they signed the $4 billion deal). Is that why the desktop client has been moving forward without any sign of development on the underlying technology?

Platforms: Should Facebook imitate Mall of America?

One of the biggest investment repellents in global business is when a country becomes unstable. If it seems like industry nationalisation or any other grand idea is likely to take place, investors disappear like rats from a sinking ship.

In its post “Facebook Takes Another Jab at Developers“, Allfacebook reported yesterday that by changing its interface and decreasing the visibility of third party applications without keeping its developers in the loop, Facebook is causing uncertainty among the developers for its platform.

Facebook isn’t alone:

What Facebook and other platform providers should do is imitate shopping malls. Instead of blocking applications or decreasing their visibility, they should increase their visibility.

Alfred Taubman, the shopping mall mogul, describes a mall’s layout like this:

You have two levels [and two escalators]. The customer comes into the mall, walks down the hall, gets on the escalator up to the second level. Goes back along the second floor, down the escalator and now she’s back where she started from. [The customer has] seen every store in the centre.

Why aren’t they doing this already? The answer is probably a classic one: Follow the money.

An application developer can make a bundle by creating a popular Facebook app, but how does Facebook make money off its platform? In a shopping mall, just as on other platforms like Windows, the customer is eventually charged. Facebook however, is free.

Further reading:

  • Umair Haques Bubble Generation Strategy Lab. The most insightful, cynical Facebook coverage on the web.
  • Catalyst Code, by David Evans and Richard Schmalensee. A detailed, interesting dissection of the platform business model.