The Difference Between a bunch of APIs and a Platform

“A platform is when the economic value of everybody that uses it, exceeds the value of the company that creates it. Then it’s a platform.” — Bill Gates

For a platform to have meaningful impact, both the platform vendor and the developers on the platform need a value exchange that works both ways. Otherwise it’s just a hobby.

People writing Windows, Office or iPhone apps make the these products more valuable which increases Microsoft’s and Apple’s revenue. Similarly developers writing more Azure or AWS translates into direct billed revenue to Microsoft and Amazon. These all benefit the platform vendor.

Developers make money selling apps for Windows & iPhone. Companies save money or can build valuable services writing Azure or AWS apps. There are huge businesses worth billions of dollars built on these platforms. These all benefit developers.

On the other hand, we have examples where the creating an API in an attempt to build a platform did not help the platform vendor. The clearest example of this is when Twitter published their quadrant of death for 3rd party Twitter clients. Twitter provided an API that allowed companies to build competing Twitter clients then realized that since their revenue model was ad-based their API was literally stealing money from out of their pockets since it created a sanctioned way for Twitter users to utilize the service without viewing ads. So they slowly backtracked on this over a few years in a manner that left bad blood between them and developers. Here the platform did not benefit the platform vendor.

Platforms have also died from lack of providing value to developers. One could argue that Windows Phone died due to a lack of apps and the reason there were no apps is because there wasn’t a compelling reason to write any. It was a chicken and egg problem which the company could have remedied but chose not to for strategic reasons which led to the irrelevance and death of the Windows Phone. This is an example of a platform not benefiting developers leading to it just being a collection of APIs that didn’t help anyone.