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How do "platforms" make money then?

I may be asking for trouble but could someone explain to me how platforms make money as Joel was describing them in his platroms essay?

They are supposed to give away the run time? This will lead people to buy their product later on after they all become hooked on it?  How? Why?  The VB runtime doesn't make a user want to buy a copy of VB.

Do they make money just from selling the development tools to software developers then? Or possible some sort of server (ala Notes and ColdFusion etc)?  Or are these No No's too?

I'm a bit confused, but it is Monday morning after all.

Me Myself and I
Monday, September 9, 2002

VB runtime simple, it encourages developers to create apps for windows!

Daniel Shchyokin
Monday, September 9, 2002

.net runtime free

.net development environment - damn expensive.

Any more questions?

Robert Moir
Monday, September 9, 2002

True, but you can develop using only notepad

Daniel Shchyokin
Monday, September 9, 2002

You could cut your grass with scissors, but I bet you paid for a lawnmower :)

Michael H. Pryor
Monday, September 9, 2002

I don't think VS.NET is significant source of revenue to Microsoft... Definitely it will not pay all the .NET development expenses. IMHO, main reasons for MS:
- keep developers/users tied to Windows
- justify next couple of Windows upgrades
- fight Java and promote the whole MS server solution - IIS+MSSQL+etc.

Igor K.
Monday, September 9, 2002

Most platforms make money selling servers or SDKs.  Macromedia, for example. 

.Net is different, in that Microsoft actually makes money selling the platform.  .Net was not created to sell more copies of VS, it was created to sell more copies of Windows.

Microsoft might be the only company who can succeed with a "selling the platform" strategy.

Scott Gamon
Monday, September 9, 2002

You'll also note that while Joel gets irked with suggestions he might have a viable business giving code away, he's pretty keen on having other people do it 8).

Rodger Donaldson
Monday, September 9, 2002

I started a similar thread here a few weeks ago:

Monday, September 9, 2002

Michael - as I suspect you know, the alternative to buying your own lawnmower is to borrow your neighbour's.

Tuesday, September 10, 2002

The platform is always part of an intermediate structure. It is never a goal in itself (the notable exception being Apple where the platform has become a religious cult). Take the PDF example. Neither the publisher nor the consumer cares about the format, as long as it supports the necessary features to carry the content.
The goal of the platform company is to pocket money from one or both of these groups, by charging for access to the platform. This can be through subscriptions, software sales, runtime sales … the possibilities are numerable.
It is not an easy balancing act, since the value of the platform is in direct relationship to the products being produced for it and the consumer population that has accepted the platform. Almost by definition this means that the initial value of a platform is close to zero. The growing of the platform away from this negligible value point is the hard act to follow.

Just me (Sir to you)
Tuesday, September 10, 2002

> Michael - as I suspect you know, the alternative to
> buying your own lawnmower is to borrow your
> neighbour's

Or concrete over the lawn. Think out of the box, man :)

Tuesday, September 10, 2002

> Or concrete over the lawn. Think out of the box, man :)

My dad pretty much did that...

Tuesday, September 10, 2002

I think Joel is right that you have to market a platform differently to an application, but there do seem to be a number af valid approaches to this.

1. Give the runtime away free and make money off the development tools (VB).

2. Give away runtime and basic SDK free and make money off premium development tools (Java/.NET)

3. Give away free application runtime and count on users to upgrade to full version for extra features (Windows 1-2, Quicktime)

4. Acquire market dominence any way you can then start charging (Windows? IE?)

5. Hire lots of developers to write for the platform and release bundle the apps with the platform to create a "critical mass" of applications (can't think of an example)

6. Charge through the nose for development, servers and client licences because you're the best there is (Oracle)

And probably lots of other variations.

The point is, unless you can get enough developers to support your platform, the platform will fail. And for a new platform, developers are going to be reluctant to write for it because:

a. Users have to download/install/buy the plugin/runtime/platform environment, which means you have to persuade them not only to trust your application, but also the platform it depends on,

b. The platform might not exist in a year, meaning all their hard work was for nothing.

So a platform developer has to persuade the programmer that their platform will make their life easier to a large enough extent to be worth risking these problems. Any barriers they place in the way make this more difficult.

But, of course, the platform developer also has to make back their investment of writing the platform in the first place.

They have to find a way to balance these conflicting goals. Charging a lot for the platform will make no money if nobody develops for it, but giving it away free makes no money, even if lots of people develop for it (unless the developers pay for the privilege of developing for it).

And the right solution for one platform might bankrupt another.


James Shields
Tuesday, September 10, 2002

You could cut your grass with scissors...

When I was first learning java all our developers used notepad and the jdk! the point being that if your boss doesn't know the difference between a Scissors and the lawn mower, and the scissors is cheaper....

Daniel Shchyokin
Tuesday, September 10, 2002

Platforms don't make money, they mint it!

Tuesday, September 10, 2002

Here is an interesting article on how Adobe might be closing the open plugin standard they created...

Robin Debreuil
Wednesday, September 11, 2002

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