Spotify’s grand plan to monetize its open source Backstage project through premium plugins • businessroundups.org

By nearly a third of the global music streaming market share, Spotify needs little introduction. Some 456 million people consume music, podcasts and audiobooks every month through Spotify, with 42% paying a monthly fee, while the rest are subject to advertising.

Indeed, advertising and subscriptions have been the cornerstone of Spotify’s business model from the start, though it has expanded into tangential verticals like concert tickets. However, the company is now looking into another potential moneymaker that has little to do with its core consumer product.

Back in October, Spotify teased plans to commercialize a developer-focused project it made available as open source nearly three years ago, a project that has been accepted by engineers from Netflix, American Airlines, Box, Roku, Splunk, Epic Games, VMware, Twilio, LinkedIn and at least 200 companies.

Today those plans are coming true.

Infrastructure front end

The project in question is Behind the scenes, a platform designed to bring order to businesses’ infrastructure by enabling them to build custom “developer portals,” combining all of their tools, apps, data, services, APIs, and documents into a single interface . Through Backstage, users can monitor Kubernetes, for example check their CI/CD status, view cloud costs or track security incidents.

While there are other similar tools like Compass which Atlassian introduced earlier this year, Backstage’s main selling point is that it is flexible, extensible and open source, helping companies avoid vendor lock-in.

Spotify used a version of Backstage internally since 2016, before releasing it under an open source license in early 2020. And Backstage earlier this year was accepted as an incubation project at the Cloud Native Computing Foundation (CNCF).

Most major tech companies have developed fairly robust open source programs, often contributing to third-party projects that are integral to their own tech stack, or donating internally developed projects to the community to drive adoption. And that’s exactly what led Spotify to open-source Backstage, after previously being blindsided by the rise of Kubernetes in microservices.

For context, Spotify was an early adopter of so-called “microservices”, an architecture that makes it easier for companies to compile complex software by integrating separately developed components and connecting them via APIs – this is unlike the traditional monolotic architecture, that is, simpler in many ways, but difficult to maintain and scale.

Spotify was actually in the right place at the right time as the great transition from monolith to microservices happened.

But with microservices, there is a greater need to coordinate all the different moving parts, which can be a tedious process involving different teams and disciplines. To help, Spotify has developed a homegrown orchestration platform (hosting the various microservices). called helioswho made it open source way back in 2014. However, with Kubernetes emerging from Google’s open source vaults the same year and eventually going on to take the world by storm, Spotify eventually made the “painful” decision to ditch Helios and go all in on Kubernetes.

“Kubernetes kind of took off and got better – we had to trade that in [Helios] and it was painful and expensive for us to do all that work,” Tyson Singer, Spotify’s head of technology and platforms, told businessroundups.org. “But we had to do it because we couldn’t invest at the same pace to keep it going [with Kubernetes].”

This turned out to be the reason for Spotify’s decision to open-source Backstage in 2020: once bitten, twice shy. Spotify didn’t want Backstage to lose to another project made open source by one of its rivals, and have to replace its in-house developer portal with something else light years ahead due to the fact that it’s backed by hundreds of billion dollar companies worldwide.

“Backstage is the operating system for our product development teams – it’s literally foundational,” said Singer. “And we don’t want to have to replace them.”

Fast-forward to today, and Spotify is now doubling down on its efforts with Backstage as it looks to make a trickier proposition for some of the world’s biggest companies. And this means monetizing the open source core project by selling premium plugins on top of it.

“By monetizing these plugins, we can be more confident that we can always be the winner,” Singer continued. “And that’s what we want — because, you know, it’s going to be expensive for us to replace.”

Plugged in

Backstage is already built on a plugin-based architecture that allows technical teams to tailor things to their own needs. There are dozens of free and open source plugins available through a dedicated marketplace developed by both Spotify and its outside community of users. However, Spotify takes it a step further by offering five premium plugins and selling them as a paid subscription.

The plugins include Backstage Insights, which displays data about active Backstage usage within an organization, and which plugins users are engaging with.

Elsewhere, Pulse runs a quarterly productivity and satisfaction survey directly from Backstage, allowing companies to survey their workforce and identify tech trends and access anonymized datasets.

Skill Exchange, meanwhile, essentially brings an internal marketplace to help users find mentors, temporary collaborative learning opportunities, or hacks to improve their technical skills.

And then there’s Soundcheck, which helps engineering teams gauge the health of their software components and “define development and operational standards.”

Finally, there’s the role-based access control (RBAC) plugin, which provides a codeless interface for companies to manage access to plugins and data within Backstage.

While Backstage and all of its plug-ins can be used by businesses of all sizes, it is primarily aimed at larger organizations, with hundreds of engineers, where the software is likely to be more complex.

“In a small development organization, the amount of complexity you have of, say, 15 microservices, a developer portal is nice to have, but not a must-have,” Singer said. “But when you’re on the scale of 500 developers or more, the complexity really builds out.”

Developer Tools

While numerous companies have commercialized open source technologies over the years, with engineers and developers often the beneficiaries, it’s a bit odd that a $15 billion company best known for music streaming is now trying to monetize something that isn’t really related to music. stream.

Furthermore, if you’ve already made Backstage open source and created a fairly active community of contributors who have developed plugins for others to use, why not continue to nurture that goodwill by simply giving these new plugins away for free ? It all boils down to one simple fact: developing robust and feature-rich software costs money, whether it’s proprietary or open source.

Just as Kubernetes is supported by a host of major technology companies through their membership in the CNCF, Spotify has sought similar support for Backstage by donating the core project to the CNCF. But value-added services that help drive adoption still require resources and direct investment, which is what Spotify wants to fund through a bundle of subscription plugins.

“Now it’s a matter of can we continue to fund that open source ecosystem, [and] like most big open source projects, there’s a funding mechanism behind it,” Singer said.

As for pricing, Spotify said costs will depend on “individual customer parameters,” such as usage and capacity, and will be charged annually per developer. In other words, costs will vary, but for a company with hundreds of developers, we’re probably looking at spending in the region of thousands to tens of thousands. So this could feasibly bring Spotify revenues into the millions of dollars each year, though it will likely be a drop in the ocean compared to the more than $10 billion it makes selling access to music.

In any case, Backstage is a reminder that Spotify sees itself not only as a music streaming company, but also as a technology company. And similar to how Amazon created a giant cloud company out of a technology it initially built to power its own internal operations, Spotify is trying to see what kind of traction it can gain as a developer tools company — or something like that. .

It’s certainly a question worth thinking about: is doing does all this mean that Spotify is all about becoming some kind of dev tools company? And can we expect more premium plugins in the future?

“Who knows what’s going to happen in the future — I don’t think you’ll see it next year, we’ll see how it goes,” Singer said. “We think we need to learn a bit about how this fits into the market at this point? I do expect that you will see more of us in the future.”

Spotify’s five new premium plugins are officially available today as part of an open beta program.