Software Ecosystems Are Becoming Critical Business Infrastructure

Way back in 2003, I was in Shanghai and happened to have breakfast with Tien Tzuo, then the CMO of Salesforce.com (and now the CEO of Zuora). He told me the following:

“The network is the computer. That’s something that you’ve heard of for a long time. Software is something that needs to sit inside the network, not on individual desktops. We envision a scenario where everyone goes to work, fires up browsers, looks at Yahoo, does their personal stuff, fires up their applications and it’s all inside the network. We want to provide that service. It’s like the movie The Matrix. The whole world works within the public network, available to you anytime, anywhere, for anything.”

Thus, Salesforce’s platform strategy was born.

Fast-forward to 2016: In March, at the Adobe Digital Marketing Summit, I heard the Adobe CTO, Abhay Parasnis, tell a group of analysts that Adobe was combining the Digital Marketing Cloud, the Creative Cloud, and the Document Cloud into a single platform and that it was going to build an ecosystem of partners around that platform and Adobe’s portfolio.

A month later, I was at Microsoft Envision and heard Satya Nadella imply (he didn’t say it outright) a new vision for what he wants Microsoft to become. To make it very short, he wants Microsoft to be the essential matrix for 21st-century business infrastructure. The company since then has combined the Dynamics CRM and ERP offerings into a cohesive platform called Dynamics 365, enveloped by Azure, its cloud infrastructure.

I could continue telling you story after story about technology companies that now speak in terms of platforms and ecosystems rather than applications and solutions. But the question remains, is this distinction important, or just a matter of marketing?

So I don’t hold you in suspense, here’s the answer: It is important, and a lot more than simply marketing differentiation. Why?

In the past decade or so, we’ve seen a dramatic shift in what customers expect from companies. They expect products and services, but they also expect a great customer experience overall and at each point of interaction—and at a personal level. That means that each customer has a different idea of what he wants from the companies he’s cooperating with. This level of customer experience is typically not easy to attain.

To succeed, companies must have the strategy and programs to define what they are, the culture to sustain those strategies and programs, and the systems and technologies to enable them. They should automate the processes that can be automated and still provide what customers need in their interactions.

The other big thing ecosystems and platforms make possible: outcomes.

An outcome for a technology buyer, for example, could be: “I need to be able to provide my customers with a response time of less than an hour, regardless of how they access customer service.”

To accomplish this outcome, you have to make sure you have the tools necessary to carry out these functions:

1. Automate what can be automated—procedures that are easy to carry out, information that’s simple to access—and have available all the channels necessary to ensure customers can get answers within the one-hour window.

2. Deploy a knowledgebase that is capable of handling most of the questions a customer might ask.

3. Have on your various channels a team of people who are committed to responding—and are armed with the tools to respond within that one-hour time frame.

4. Have the ability to send alerts and enable permissions so that escalation can occur quickly when necessary.

I can go on, but you get the idea. These aren’t simple systems or processes, and they can’t necessarily be carried out with a standard set of tech tools.

So what the primary seller has to provide is an ecosystem that spans the range of customer needs and requirements—not just its existing product and tool set.