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Amazon’s Bezos Pushed A Platform. Should You?

Written by Frank Hayes
October 19th, 2011

A Google engineer’s accidentally published rant on October 12 made headlines because he ripped into Google’s hottest new property, calling Google+ “a knee-jerk reaction, a study in short-term thinking” and “a pathetic afterthought.” But ironically, that’s the least interesting thing Googlista Steve Yegge had to say—and his real point has serious implications for retailers.

That crucial point, buried in Yegge’s 4,800-word rant: Google (just like most retail chains) has built a company on top of a collection of applications. Amazon (where Yegge worked for six years) has built its enormous E-Commerce success because it is not just a bundle of retail applications. It’s a platform that lets customers interact, outside retailers sell and other third parties connect. But Amazon didn’t start that way. And how it made the transition should have retail chains thinking hard about whether that’s the right approach for them, too.

That’s not to suggest that ex-Amazoner (and, so far, not yet ex-Googler) Yegge had nice things to say about the place he worked for six years. “Amazon does everything wrong,” he wrote. “But there’s one thing they do really, really well that pretty much makes up for ALL of their political, philosophical and technical screw-ups.”

According to Yegge, the difference came sometime around 2002, when Amazon CEO Jeff Bezos issued a mandate that, going forward, all development teams would “expose their data and functionality through service interfaces.” And that “there will be no other form of interprocess communication allowed: no direct linking, no direct reads of another team’s data store, no shared-memory model, no backdoors whatsoever.” And all those interfaces “must be designed from the ground up to be externalizable. That is to say, the team must plan and design to be able to expose the interface to developers in the outside world. No exceptions.”

And one more thing: “Anyone who doesn’t do this will be fired.”

That’s a platform. (Well, all except the part about nonconformists being fired—that’s called “strong executive support for the platform approach.”) In practice, it means that all of Amazon’s applications had to be able to communicate with each other through standard interfaces. And all those standard interfaces had to be stable and secure enough that, if necessary, outsiders could connect and communicate in the same way.

Almost a decade later, it’s obvious that the platform mandate has been very good for Amazon’s business as a retailer. The ability to let other retailers use Amazon’s API meant it was much easier for Amazon to offer itself as an online store for other retailers, including Target, which has discovered just how hard it is to replicate that type of platform’s power and stability.

However, a big retail chain isn’t Amazon (or Google or Facebook). Every big retailer has marketing applications, customer-loyalty applications, and E-Commerce and M-Commerce applications. But conventional retailers don’t need to unify all their applications and expose their APIs so that lots of other retailers can use their stores (online and brick-and-mortar) to do business. That’s Amazon’s model. Then again, it’s not the only way to use a platform.

What applications would it make sense to platform-ize in a retail chain? Definitely not some of them.


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