Should Publishers Buy Platforms or Solutions?

This seems to be one of the age-old questions in publishing and, on returning from the SIIA Summit this week in New York City, I thought I’d weigh in with a quick answer.

My answer is rooted in Geoffrey Moore‘s idea of core/context analysis introduced in his book, Living on the Fault Line, though also referenced in subsequent works (e.g., Dealing with Darwin). Moore defines core and context as follows:

  • Core: Any activity which creates sustainable differentiation in the target market resulting in premium prices or increased volume. Core management seeks to dramatically outperform all competitors within the domain of core. (Note this use of the term is unrelated to either core competence, which describes differentiated capability, or core business, which describes categories accounting for a high percentage of overall revenues.)
  • Context: Any activity which does not differentiate the company from the customers’ viewpoint in the target market. Context management seeks to meet (but not exceed) appropriate accepted standards in as productive a manner as possible.

Simply put, I define context as “everything else.” There’s no argument that context (e.g., payroll, sales pipeline management, accounting) isn’t a lot of work. And there’s no argument that context isn’t important (e.g., get accounting wrong and go to jail). In a logic sense, I’d argue that successful execution of context activities is necessary but not sufficient for business success. What’s sufficient is successful execution of core.

The thing I like about Moore’s model is it clarity and simplicity. Core is where we get competitive advantage, context is everything else. For context activities, we should use the same solutions as our competitors because we are not trying to get competitive advantage from context. So we can all use ADP for payroll and salesforce.com for SFA. In fact, I’d argue that we benefit from a group economy of scale when we generally use the same suppliers for the context activities (mitigated only by those suppliers becoming monopolists and then overpriced and under-responsive).

But for core, we should be different. Core is where we provide uniqueness. Ergo, the right answer to me is clear.

  • For context activities, publishers should buy solutions
  • For core activities, they should buy platforms

There is no question that “product development” is a core activity at publishers. Ergo, publishers should buy platforms (to accelerate product development and avoid re-invention of infrastructure technology) and not buy”solutions” that effectively give them the same offering as the competition and — worse yet — allow the solution supplier to productize any customization or innovation you do back into the solution offering and sell it to your competition.

I’d again argue that there is a second-order argument where all publishers are better off when many of them use the same platform (e.g., hiring, training, vendor responsiveness to industry feature requests), but we won’t get into that here.

Hoping to derive competitive advantage from a prepackaged publishing solution is, in my opinion, oxymoronical. There are two things that money can’t buy: love and competitive advantage.

3 responses to “Should Publishers Buy Platforms or Solutions?

  1. nice post Dave. I agree. Product development is clearly core. Salary processing is clearly context. Marketingand/or SFA is a little bit of both in my opinion.One other thing: the difference between a platform and a solution isn’t always clear. SFDC is a solution *and* a platform in the SFA world. You can do a lot of custom development in order to differentiate yourself from your competitors.

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  3. Dave – as always, this was an excellent post. I have one comment to make however. I agree strongly that platforms can enable competitive differentiation that is key for the top companies in any given space but I feel that the small and medium-sized enterprises that can’t afford the platform + implementation costs for a technology benefit greatly from purchasing solutions. And, in fact, that solutions is likely a competitive differentiator as compared to the other companies that may reside in their “2nd tier”. What are your thoughts on this?

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