One of the keys to success for a software platform is its ecosphere – the community of developers, consultants and advocates that grows around a service.
By far the most successful company in building a community around its products is Microsoft, which over the years has attracted hundreds of thousands of developers and partners to support Windows.
Microsoft’s thousands of partners are the company’s greatest asset in beating back the threat posed by Google, cloud computing and Apple. The sheer size Microsoft’s supporter base gives it a natural buffer against competitors.
Apple too has that buffer, in the company’s darkest days during the late 1990s it was the true believers who kept the flame burning. The ecosphere that has developed around the iPhone and iPad has now cemented Apple’s iOS as being the dominant mobile platform.
The same thing happens around various industry software packages, as one company becomes identified as the leader in their sector they develop a following among users in that industry.
At the Xero conference last weekend, the cloud accounting software company showed how an ecosystem of developers, accountants and bookkeepers are developing around their software platform.
Companies as diverse as inventory management, point of sale system and document scanning services are plugging into Xero’s accounting data which adds functionality for customers.
In turn, those third-party services make Xero more attractive to the bookkeepers and accountants looking for ways to make their jobs, and those of their clients, easier.
Xero’s biggest competitor, MYOB, also has that strength, with an army of certified consultants from long being the incumbent in their market.
The battle between Xero and MYOB for dominance in the business accounting software market will depend upon how well the incumbent can hold onto their existing markets and the effectiveness in the incumbent building an ecosphere that makes the newer product more attractive.
Paul Wallbank is one of Australia’s leading experts on how industries and societies are changing in this connected, globalised era. When he isn’t explaining technology issues, he helps businesses and community organisations find opportunities in the new economy.