
“Platform” risk - danso
http://www.eugenewei.com/blog/2015/3/14/platform-risk
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fsk
Summarizing - Building a business on someone else's platform is very risky,
because they will cut you off to promote their own competing product instead.

AWS doesn't do this, because the second they cut off a customer based on their
type of business (even if it competes with Amazon), they'll lose their
marketplace credibility. Facebook, Twitter, and Apple have near monopolies,
but AWS still has lots of competitors.

~~~
akkartik
That isn't a summary, that's actually more accurate than the article.

The article suggests that you don't have to worry as long as you're paying
your platform for use. Against which there's a huge counter-example called
Microsoft in the 90's. The real distinction between platforms and Platforms is
the word 'monopoly' that you use, and that is prominently absent from the
article.

But even that doesn't quite feel like a complete theory, because there are
monopoly Platforms that are real utilities, like the electrical grid. PG&E
doesn't embrace, extend and extinguish. Why not? How can we arrange for more
healthy seeking of monopolies and less rentierism? Are those even well-posed
concepts? There might be something more valuable than the OP in this
direction.

~~~
stevewepay
I'm not sure which specific time period you're referring to with respect to
Microsoft, but I've worked for several companies who had paid for Microsoft
support contracts, as of the mid-90s, and Microsoft support was always
phenomenal, most especially SQL Server support.

~~~
pjc50
How good the phone support is is orthogonal to whether Microsoft will buy/kill
your line of business.

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DanielBMarkham
Over the last several years, what we're seeing is all the big companies doing
their damnedest to prevent any new company from coming along and taking over
eyeballs. Don't be fooled: there is a vicious commercial war afoot.

Facebook wants you to build apps in their walled garden -- which they own and
will change the rules as they please. Google would love to buy your startup
that looks like it might be huge -- so they can make you an employee and let
your product either live or die in the Google ecosystem, not the market. Yahoo
is willing to absorb that great business you're running -- so they can own
your work and relationships and keep the eyeballs.

Comcast wants to provide internet service to your house -- as long as it can
create some byzantine tiered billing system to obfuscate what you're getting
and charge providers for getting it to you. All of the tech industry is now
getting very politically savvy. Who is one of the top visitors to the White
House? The Google guys. Political campaigns on the left -- but I suspect the
right won't be far behind -- are more and more powered by tech money and tech
volunteers. No matter how much "Don't be evil" you're able to swallow, people
tend to see things from inside their own tiny worldview.

Just so I don't sound completely paranoid, note that platform risk is an issue
even for purely technology platforms built on FOSS. Any time one set of folks
build something and another set of folks use it, the two interests do not
always align. Systems tend to become more and more complex and unwieldy. Users
of the platform spend more time appeasing the platform architecture than they
do providing value. It just gets worse when you add money to the mix.

~~~
volaski
"Yahoo is willing to absorb that great business you're running -- so they can
own your work and relationships and keep the eyeballs." ==> This doesn't sound
like anyone getting "fooled".

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softdev12
This is a really good article and I agree with a majority of the thesis.
Basically, if you try to build a service on one of the major players
platforms, you are susceptible to being cut off or damaged in one way or
another. This occurred with Meerkat-Twitter, Zynga-Facebook, Demand Media-
Google and many others.

However, it is possible to succeed. And the counterpoint is paypal and ebay.
Most people don't remember that paypal was building their service inside of
ebay and ebay was not at all friendly about it. In fact, ebay bought a rival
payment company and tried to offer incentives to their sellers to switch from
paypal. But paypal still won out. They key is to get major support from the
platform's own users - like paypal did with ebay's sellers.

So it is possible to succeed on someone else's "p"latform.

~~~
throwaway88991
Paypal and ebay is not a clean counterpoint.

The backstory (I worked at ebay in 2000) is that Billpoint (ebay Payments) was
an ebay-Wells Fargo joint venture with a good CSR staff but no marketing
funding and limited ebay integration. (I was laughed at when I asked if there
was a mktg. budget for a billboard, or anything else.)

ebay used ebay Payments to learn about payment risk mgmt., then when they were
comfortable bought Paypal.

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SwellJoe
I've been working on a project lately that uses search APIs and various social
APIs to gather information about a given term. I'd like to add Twitter and
Facebook and other support, but I worry about things that put me at the mercy
of those providers. I would like to think this kind of "maybe I will kill you,
maybe I won't" attitude of Twitter and Facebook (in particular, but others
also do it) is counter-productive for them, but I guess they have a strong
business case for their decisions to cut companies off when those companies
start encroaching on turf that Twitter or Facebook thinks of as theirs.

In my ideal reality, we'd have an open Internet free of this kind of near-
monopoly on specific types of content. Lots of small, federated, data feeds,
and people free to move about between commercial and open options and
interconnect regardless of who's hosting the content. But, that Internet is
still pretty far off, and maybe getting farther away, as the biggest players
build bigger walls to protect their data silos.

~~~
virmundi
Would it be better to modularize your design to allow for multiple search
providers, two of which are Facebook and Twitter? Build on them while you can.
If, in the future, they decide to kill your access, let your users know. Tell
your users how to contact the offending provider. Get a small grass roots
movement going.

In the mean time, build something that at its core is yours. Build it out.
Make it a following.

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endeavour
I doubt spending on AWS scales linearly with company revenue so I'm not sure
why the author thinks amazon is getting a "cut" from competitors.

