Software as a Service (SaaS) paved the way for a new era of innovation, but it's platform businesses that are redefining the rules of the game.
Published on 2023-09-18 by Nathalie Lamborghini Dumas.
#### "Software as a Service (SaaS) paved the way for a new era of innovation, but it's platform businesses that are redefining the rules of the game, creating ecosystems where collaboration and shared value are at the heart of their success.", Marc Benioff, CEO of Salesforce
Software as a Service (SaaS) has revolutionized how we access online services, offering unparalleled convenience and flexibility. But for some SaaS companies, the evidence became clear: embracing platform business status is much more than a simple strategic step. It's an opportunity to overturn the rules, create dynamic ecosystems where collaboration and shared value combine to forge success.
What are we talking about, exactly!?
Initially, a SaaS positions itself as a "one to many" solution, providing centralized software to many users. However, some visionary SaaS understood the potential of becoming platform businesses, thus expanding their reach and impact. By opening their APIs or evolving their SaaS solution into information or flow-sharing software, these SaaS transform their model into a powerful "many to many" SaaS platform. This evolution enables users to benefit from a complete ecosystem where different applications or stakeholders connect, interact and share data, creating synergy between users.
Stand out
Take the example of Salesforce, a true pioneer in transforming a SaaS company into an undisputed platform reference. Initially, Salesforce distinguished itself with its cloud-based customer relationship management (CRM) software : linear "one to many" software. Progressively, they transcended traditional boundaries by opening their platform to external developers, who could build complementary applications, thus offering an extensive array of features.
Another example of a SaaS company that evolved into a platform is Atlassian. Initially known for its ticket tracking software, Jira, Atlassian progressively expanded its offering to become a collaborative platform for software development and project management.
Third example: initially, Netflix was a film and series streaming platform, offering a monthly subscription service. However, over time, Netflix expanded its offering beyond its own original content and by forging partnerships with other studios and creators.
For what benefits?
This evolution toward a platform business holds a multitude of advantages. First, it offers clients privileged access to a multitude of solutions, content and information, gathered within a single platform, providing a simplified experience and multiplying their satisfaction.
Moreover, by adopting the platform business model, SaaS companies expand their influence by attracting new partners (and competitors!) who bring their expertise and complementary services.
Furthermore, a platform business possesses a significant asset: the ability to collect valuable data on users' interactions with the various services offered.
Additional monetization opportunities
Opening a linear SaaS software to a platform business also enables numerous additional monetization possibilities:
The transformation of a linear SaaS software into a platform business offers numerous opportunities to redefine the rules in the digital ecosystem economy. By expanding their offering, promoting collaboration and creating shared value, platform businesses can offer a more complete and satisfying experience to their clients.
However, to ensure the long-term sustainability of the platform business, it is paramount to find the balance between value creation for customers and revenue generation; all while meeting the challenges associated with this transition and putting in place the strategies, partnerships and appropriate trust measures in this new era of platform businesses.