Platforms or Portfolios: What Matters to Buyers?

March 19, 2024

Understanding the distinction between platforms and portfolios and their appeal to different types of software buyers is crucial for both providers and consumers as value from security tooling becomes muddier as tools and integrations sprawl across systems.

This blog delves into these differences, the preferences of small businesses versus enterprise buyers, and how APIs facilitate interoperability—potentially mitigating the risk of vendor lock-in, particularly with portfolios.

Platforms vs. portfolios in cybersecurity systems

Platforms are foundational security and software systems that allow multiple products, services, or applications to be built upon.

They serve as a base that supports the development and integration of various functionalities, facilitating a network of users, developers, and applications to interact within a cohesive ecosystem.

Platforms thrive on interoperability and seamless data exchange, often creating a locked-in user base due to their expansive and integrated nature.

Portfolios consist of a collection of solutions or products that may be related or diverse but are not necessarily built upon a single underlying platform.

Portfolios offer flexibility and choice to customers, allowing them to select specific solutions that meet their unique needs without committing to a single platform's ecosystem.

This approach can reduce dependency on a single vendor and decrease the risks associated with vendor lock-in.

Six key factors to consider when choosing your approach

In the realm of cybersecurity, the choice between platforms and portfolios carries significant weight. Understanding the nuances between these approaches is crucial for effective risk management and safeguarding sensitive information.

Here, we explore six key factors to consider when evaluating these options, shedding light on how they can impact your organization's security stance and resilience against evolving threats.

1. Buyer preferences: small business vs. enterprise

Small business buyers prioritize cost effectiveness, ease of use, and immediate value in purchasing decisions. They lean towards solutions that offer straightforward integration and minimal operational disruption. Portfolios can appeal to this group by providing the flexibility to choose solutions that match their specific requirements without the necessity for significant investment in a comprehensive platform.

Enterprise buyers, on the other hand, often seek scalability, security, and comprehensive integration capabilities to support their complex operations. Platforms are beautiful to enterprise buyers due to their ability to facilitate broad interoperability across the organization's IT landscape, streamline processes, and support extensive customization.

G2’s 2023 Software Buyer Behavior Report makes very similar observations on the buyer preferences of businesses of different sizes. The top three considerations for purchasing software, by company size, are detailed in the table below.

2. Avoiding vendor lock-in with portfolios

One of the critical advantages of opting for a portfolio approach over a platform is the potential to avoid vendor lock-in. 

By selecting best-of-breed solutions from various vendors, companies can ensure they use the best tool for each specific need, maintaining flexibility in their IT infrastructure. However, this approach requires a robust integration strategy, often facilitated by APIs, to ensure seamless operation between disparate systems.

3. The role of APIs in interoperability

APIs are pivotal in enabling interoperability between different software systems within a platform or a portfolio. They allow separate software products to communicate and work together, facilitating data exchange and function calls between applications. This interoperability is essential for businesses seeking to leverage diverse software solutions without being tied to a single vendor's ecosystem.

4. Cybersecurity implications

Cybersecurity plays a critical role in the context of platforms and portfolios within software systems. The increased interconnectivity and reliance on digital platforms heighten the cybersecurity risks, necessitating robust security measures to protect sensitive data and maintain system integrity. 

Platforms, due to their extensive ecosystem involving numerous users and third-party applications, may present a larger attack surface for cyber threats. However, their centralized nature allows for more uniform and potentially more effective cybersecurity measures. Portfolios, being a collection of disparate systems, might offer more points of entry for cyber threats but also allow for tailored security approaches for each component, possibly complicating coordinated cyber defense strategies.

Vendor acquisitions in the software space significantly affect the cybersecurity landscape. Mergers and acquisitions (M&A) involving information technology firms bring about a melding of different IT cultures, systems, and security postures, potentially introducing vulnerabilities during the integration phase. 

In their 2017 research, Y. Chang and Wooje Cho highlight the dynamic nature of post-merger risks, emphasizing that acquisitions motivated by customer-side considerations, such as expanding a platform's user base, might entail persistent cybersecurity risks compared to those with a production-side motive.

5. Impact of vendor acquisitions

Vendor acquisitions can lead to consolidation within the software industry, which might impact the efficacy and affordability of platform and portfolio offerings. Such consolidation could lead to enhanced cybersecurity measures through shared resources and expertise. Conversely,  it might also lead to reduced competition, potentially affecting the innovation and cost-effectiveness of cybersecurity solutions.

Research from Léger and Quach (2009) suggests that the characteristics of software product portfolios, including their cybersecurity features, can influence the post-merger performance of firms, indicating that well-integrated and secure platforms and portfolios can enhance market value.

6. Strategies to mitigate cybersecurity risks

To mitigate cybersecurity risks and avoid vendor lock-in, especially in the context of portfolios rather than single platforms, organizations can adopt several strategies:

  • Diversification of security measures: Leveraging a portfolio approach to cybersecurity itself, employing a diverse set of security technologies and practices to protect against a wide range of threats.
  • Enhanced due diligence during M&A: Thoroughly evaluating the cybersecurity posture and practices of potential acquisition targets to understand the risks and integration challenges.
  • Continuous monitoring and adaptation: Implementing advanced security monitoring tools and practices to detect and respond to threats in real time, regardless of whether they arise from within a platform or across a portfolio of software solutions.
  • Collaboration and information sharing: Participating in industry-wide cybersecurity initiatives and information-sharing platforms to stay informed about emerging threats and best practices.

Think about balance and optimization when choosing between platforms, portfolios, and API integration

Adopting a platform or a portfolio strategy in software systems depends on a business's specific needs, size, and strategic goals. Small companies favor the flexibility and scalability of portfolios, while enterprises lean towards the comprehensive integration and efficiency of platforms. 

Regardless of the choice, APIs are crucial for ensuring interoperability and flexibility, enabling businesses to maximize the value of their software investments while mitigating the risks of vendor lock-in.

Learn about why cyber insurance companies should demand valid and tested cybersecurity plans.

Edited by Jigmee Bhutia

API Marketplaces
Interoperability is key

Find and incorporate APIs to make integrations between applications more convenient and efficient.

Platforms or Portfolios: What Matters to Buyers? This blog delves into these differences, the preferences of small businesses versus enterprise buyers, and how APIs facilitate interoperability.
Dr. Chase Cunningham Chase Cunningham is VP of Security Market Research at G2. With over two decades of experience in Cyber Forensic and Analytic Operations, he has held senior security and analyst roles at NSA, CIA, FBI, and other government agencies, as well as with industry leaders Accenture and Forrester. A retired U.S. Navy Chief, Chase most recently was Chief Strategy Officer at Ericom Software. Chase also hosts the DrZeroTrust podcast.