Platform Dependency is No longer Heresy in B2B

Common Wisdom in Silicon Valley is that Platform dependency is a big NO NO. But particularly in the B2B sector, this might not be true anymore. 

Matt Turck on Twitter: "It's considered very dangerous for a startup to tie its fortunes to one tech giant BUT: * nCino just became a $6.7B public company built entirely on top of Salesforce * JAMF just became a $4.6B public company focused on enterprise support for Apple products exclusively 🤷‍♂️"

As backend technology starts to get commoditized thanks to the Cloud, it also becomes abstracted away and arguably less of a competitive advantage to build yourself. 

“By using a set of Salesforce  services, companies could take advantage of work that SFDC had already done, speeding up building time and reducing time to market…..back in 2007 building atop a Platform as a Service (PaaS) wasn’t a common way of developing software.” 

(Source: In the cloud era, building on platforms you don't own is normal)

This has led to the rise and massive growth of  Vertical Saas Giants. 

“Why are vertical SaaS companies thriving? There are fewer competitors within each industry and early leaders tend to dominate their field. The best SaaS companies that achieve the golden standard for the industry tend to maintain that leadership role. 

People in a particular industry network with peers in other companies, attending conferences and events together. People tend to invest in software that others recommend and are likely to remain loyal customers.” 

(Source:https://www.trustradius.com/buyer-blog/the-growth-of-vertical-saas-companies-today)

Go-to-Market strategy and speed become critical pieces to winning a market. 

The front end is how they win: customer acquisition piece and UX. Something that can only be built with deep customer insight and industry experience. I’ve seen huge companies like Veeva, ServiceMax that were also built on top of Salesforce.  But here these are specific for their vertical industry. Big massive industries such as Life Sciences & Field Services in prior examples that have specific nuances that can only be served by expertise from that industry. 

Other examples include Procore in the Construction Industry,  Clio in the Legal industry or Guidewire in the Insurance industry. 

Watch this area of Vertical SaaS as we can expect many more billion dollar giants to emerge here over the next 5 years.