With a third of the global music-streaming market share, it doesn't need much to be introduced. 42% of people who pay a monthly fee are exposed to advertisements while the rest don't.
Since its inception, ads and subscriptions have been the core of the business model. The company is looking at another potential money-spinner that doesn't have anything to do with its consumer product.
A developer-focused project that was open-sourced nearly three years ago has been adopted by engineers at at least 200 companies.
The plans are about to come to fruition today.
Backstage is a platform designed to bring order to companies' infrastructure by enabling them to build their own developer portals, combining all their tooling, apps, data, services, and documents in a single interface. Users can check their CI/CD status, view cloud costs, or see security incidents through Backstage.
It's in action on the platform.
The main selling point of Backstage is that it is flexible, open source, and allows companies to avoid vendor lock-ins.
A version of Backstage was released under an open source license. The Cloud Native Computing Foundation accepted the project as an insturment.
Most of the big technology companies have developed robust open source programs, often involving contributing to third-party projects that are part of their own tech stack, or donating internally-developed projects to the community. That is what led to the open-sourced Backstage, having previously been caught off guard by the rise of Kubernetes.
Micro services is an architecture that makes it easier for companies to build complex software through integration of components developed separately and connecting them via an application programming interface.
The transition from monolith to microservices was happening at the right time.
There is a need to coordinate all the different moving parts which can be an unwieldy process. The home-grown container was open-sourced and used to host the different platforms. With Kubernetes arriving from the open source vaults of Google the same year and eventually going on to conquer the world, the decision was made to ditch Helios and go all-in on the platform.
"We had to swap that helios out and that was painful and expensive for us to do all of that work." We had to do it because we couldn't invest at the same rate to keep it up to date.
The decision to open-source Backstage in 2020 was the result of this. Due to the fact that it is supported by hundreds of billion-dollar companies around the world, Backstage had to replace its internal developer portal for something else light years ahead.
Backstage is the core of our product development teams. We don't want to have to change that.
Today, Spotify is doubling down on its efforts with Backstage, as it looks to make it a stickier proposition for some of the world's largest companies. Premium Plugins will be sold on top of the core open source project to monetize it.
It allows us to be more confident that we can always be the winner. It will be costly for us to replace it.
It is possible for engineering teams to tailor things to their own needs. There are a lot of free and open source software available via a dedicated marketplace. Five premium Plugins are being sold as a paid subscription by Spotify.
The data surrounding active Backstage usage within an organization is displayed in Backstage Insights.
Week-on-week trends are shown by Backstage Insights.
Companies can use a quarterly productivity and satisfaction survey from inside Backstage to quiz their workforce and find engineering trends.
Users can find mentors, collaborative learning opportunities, or hacks in the internal marketplace of Skill Exchange.
The image is from the backstage skill exchange.
Soundcheck is a tool that helps engineering teams measure the health of their software components.
The image is from the backstage soundcheck.
The role-based access control (RBAC) is a no-code interface that companies can use to manage access to their data.
There is a backstage role-based access control.
While Backstage can be used by businesses of all sizes, it can only be used by large organizations with hundreds of engineers, where the software is more complex.
A developer portal is a nice-to-have, but not a must-have, according to Singer. The complexity gets built out when you have a lot of developers.
While a lot of companies have made use of open source technologies in the past, it is odd that a fifteen billion dollar company is now trying to make money off of something that isn't related to music- streaming.
Having already open-sourced Backstage, and created a fairly active community of contributors that have developed plugins for others to use, why not continue to foster that goodwill by simply giving away these newplugins for free? Developing robust and feature-rich software costs money regardless of whether it's proprietary or open source.
The core project of Backstage has been donated to the CNCF, just like how Kubernetes is supported by a host of big technology companies. In order for value-added services to help drive adoption, they need resources and direct investment.
Like most large open source projects, there's a funding mechanism behind them.
The costs will be dependent on the customer's usage and capacity, and will be charged annually on a per-developer basis. For a company with hundreds of developers, we are likely looking at spend in the thousands to tens of thousands. It's possible that net revenue falls into the millions of dollars each year, but it will likely be a drop in the ocean compared to the $10 billion it makes through selling access to music.
If nothing else, Backstage reminds us that the company is more than just a music streaming company. Similar to how Amazon created a gargantuan cloud business off the back of a technology that it built initially to power its own internal operations, Spotify is looking to see what kind of traction it can get as a developer tools company.
Does this mean that Spotify is going to become a tool company? Can we expect more premium products in the future?
Singer doesn't think you'll see it in the next year. We don't know how this will fit in the market at the moment. You will see more from us in the future.
Today is the official opening of the open alpha program for the new premium extensions.
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