Customer Service


The Platform Wars of 2018

The new battleground in enterprise software is likely to be the software platform. This is not to say that analytics and security are not important, but they are being handled in different ways.

Security is being handled in ways that address both hardware and software vulnerabilities, but these things aren’t what customers or consumers spend their days thinking about. While everyone wants security, few know enough about it, and the attitude is that security is someone else’s job.

Both of these topics will be dealt with, but they aren’t likely to be competitive differentiators, at least not yet.

Platforms, on the other hand, affect more people — and importantly, they are key to making and saving money, topics the C-suite cares deeply about. Some of them might not know data from database, but they all know profit and loss.

The software platform can be directly linked to making and saving money, which is why it is such a potent potential differentiator. We live in an era of commoditization. It’s hard to find true differentiation among competing products, which naturally leads to price wars.

More than that, the pace of new product and new category introduction has declined precipitously over the last decade, meaning that vendors find themselves in zero-sum competitions in which winning new business means poaching someone else’s customer.

If there’s a lack of strategic differentiation, there’s a load of tactical opportunities. Without strategic differentiation, we face a market in which the first to react often wins the prize. Since so much of business is undergirded by information technology, the most adaptable technology — embodied in a platform — is the one most likely to help a vendor either make or save money. So we have the platform, but where do platform wars come in?

Platform-Level Change

A generation ago, we faced a similar situation in which the answer was not the platform but the whole product. However, in retrospect they are the same. “Whole product” refers to all of the things a vendor in a mature market hangs to attract customers aside from the core product. Whole product consists of not only the core, but also the policies and procedures, financing and documentation, and many other things.

The need for whole product was a driver of CRM’s evolution. Systems were imagined and built to capture customer feedback and to support employees striving to satisfy them. However, CRM was an expensive proposition — especially in customer service, which initially required agents. It’s one reason so much energy has gone into developing indirect and self-service support.

Today’s problem is slightly different, in that vendors all more or less recognize a need to alter their processes on the fly. It’s no longer enough to offer the support a vendor feels is right, even in multiple channels. We now must support and service customers as they wish to be treated, and that dimension is always changing. Such change happens at the platform level.

In this scenario, it stands to reason that a vendor with a superior platform likely will succeed more, or more easily, in tight competition — but that’s not the end of the story. You can’t logically run a business on a platform unless your people know how to use it, and that requires training — ongoing training.

Making Money vs. Saving It

All of this came into sharp relief last week as I attended the annual analyst kick-off event sponsored by Salesforce. The company has been developing its platform for a long time. Just as importantly, over the last two to three years, it has brought forth an online training utility that develops platform skills in the rank and file. Giving customers a usable and powerful platform is the future, in my mind. Interestingly, I don’t think the messaging has come together fully.

There’s more substance than shine to the mix, an enviable situation for any vendor. In detail, there’s a fine platform and a very useful training utility in Trailhead. Also, there is an extensive list of plug and play platform-based applications on the AppExchange. Think of it as the three-legged stool we’ll all need in the future.

What’s somewhat missing in most quarters is the realization and effective communication that this stuff is no longer optional, that business supported by platform fundamentals is what successful vendors will be using for the foreseeable future.

Other vendors — for instance, Amazon with AWS and some others — see a different need and work to meet it. However, primarily providing cloud infrastructure only addresses half of the challenge and amounts to saving money. That’s a great thing, but when faced with making or saving money, 10 out of nine (I said that right) executives who are given a choice will opt for making money over simply saving it.

That’s why platform is so important today, and why I think the decision point for many business leaders in the next year or two will be over which platform to select. It’s a choice that will have far-reaching consequences, because platform is foundational and not easily changed.

So, welcome to the new platform wars. It will be a thrilling time if you are a software vendor and you have one. Other vendors, not so much.

Denis Pombriant

Denis Pombriant is a well-known CRM industry researcher, strategist, writer and speaker. His new book, You Can't Buy Customer Loyalty, But You Can Earn It, is now available on Amazon. His 2015 book, Solve for the Customer, is also available there. He can be reached at [email protected].

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