Platforms…ecosystems…marketplaces and how Atlassian got it right (part 1)

A photo of brass cogs by Miguel á Padriñán

By Neal Riley, founder of Salable

If our experience in Workplace Productivity ecosystems is any indicator, the world of Marketplaces is going to be an even bigger part of your digital lives. Governing bodies, tech giants and creators are making their moves. The future of a healthy digital economy is at stake.

Hello there! My name is Neal and for the bulk of my professional career I’ve been working to make the world of working better. The ecosystems focused on the world-of-work are big business, including Salesforce (now with more Slack!), Google, Microsoft and Apple.

My career has brought me to the Adaptavist Group as the Group Chief Information Officer. The Adaptavist Group made its early success in the Atlassian ecosystem as a Platinum and Enterprise vendor across its App Marketplace and Solution partner programmes.

Healthy ecosystems drive successful platform businesses

Atlassian did something very smart from its earliest days and it’s a significant factor in its continued success. They went from being a product company to a platform company.

In the early days of Atlassian, well before they were a SaaS vendor, they opened their on-prem products API to 3rd party development through a Java-based ‘plugin’ framework. Through iterating on this framework they landed on their ‘P2’ plugin architecture, which is still in place today.

This move from product to platform laid the foundation for Atlassian’s efforts to become an ecosystem company; (in this context) an organisation whose innovation and development is created through a combined effort of the platform and an ecosystem of 3rd party development. In the case of Atlassian, this came from an app ecosystem, but there are other forms this kind of shared value development can take.

This put Atlassian in a very interesting position, as the product didn’t have to be a perfect fit. Atlassian shifted its responsibility from meeting every customer’s bespoke, customised, setup to focusing on building the platform which could (with further development or consulting) meet the needs of their growing customer base.

Their flagship product Jira, was rapidly adopted in the SDLC market and as it began its expansion into adjacent markets like ITSM and PMO, an ecosystem strategy gave it the competitive advantage against stalwarts in the respective industries. It was innovation and adaptability that allowed Jira to enter into new markets — nearly unchallenged — for so many years. An extensible platform was a significant advantage when it came to adapting to customers’ changing needs, but there was a significant cost.

Platforms build healthy app ecosystems through marketplaces

While the company could land customers with their low price point, the cost of modifying the core Atlassian products wasn’t insignificant. It often came out of customer effort (through custom development) or by ‘good will’ development in the community of development that existed.

In order for Atlassian’s ecosystem to take hold, they would need to lower the barrier to customization (via existing IP created through the development community), as well as encourage new IP to be created and maintained throughout a customer’s lifecycle with Atlassian products.

The advent of the Atlassian Marketplace was a game changer in both of these areas. By combining an extensive API, a set of base products that met the 80th percentile of customer need with a commercial infrastructure which allowed for businesses to be created out of the missing functionality, Atlassian built an ecosystem which propelled it (and its partner businesses) forward.

The key was increasing the footprint of innovation to include a vast community, while encouraging this development through providing the commercial infrastructure to turn this innovation into a thriving business. With skin in the game and a shared focus on the customer value stream, their partner community blossomed, as did their core business.

Part 2 soon

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Tweet from Neal Riley saying "Commercial freedom and flexibility is a must for any digitally enabled business. @SalableApp gives you the tools to build your SaaS business."

Tweet from Neal Riley saying "Commercial freedom and flexibility is a must for any digitally enabled business. @SalableApp gives you the tools to build your SaaS business."