Microsoft Corporation (NASDAQ:MSFT) is one of the most successful stocks in history. Its Microsoft Windows platform catapulted the company’s valuation higher and higher. Today, the business is worth more than $1 trillion.
For years, tech companies tried to emulate its success. But to do so, they needed to discover the secret sauce: platforming.
Microsoft Windows is a perfect example of a tech platform. When you use a Windows computer, most of the applications aren’t made by Microsoft. Windows is simply the platform on which all those applications are built.
Rather than developing everything itself, Microsoft built the base layer, inviting developers from around the world to build the rest. If you ditch your operating system today, you’ll lose everything built on top of that. Your computer would be rendered useless. Such is the power of platforming.
Today, there’s another tech stock building a multi-billion dollar platform that could revolutionize our daily lives. This company is building the Microsoft Windows for autonomous vehicles.
Bet on the platform
Platforms are what creates trillion-dollar businesses. Just look at the most valuable companies in the world today. Microsoft, Amazon, Facebook, and Google are all platforms.
What makes a platform business so valuable? The bigger they grow, the faster they grow. It’s a virtuous cycle.
Consider Microsoft Windows. This platform requires other developers to build on top of it. If that doesn’t happen, the operating system isn’t worth very much. Imagine your computer, but only with applications that Microsoft builds itself. Not very appealing, is it?
But once a critical number of users adopts a platform, the virtuous cycle begins. With an early group of users, developers are attracted to build on the platform, seeking to monetize the nascent customer base. More developers results in more applications, which in turn pulls more users onto the platform. That, of course, only attracts more developers.
There’s a reason why, even today, Microsoft maintains a majority global market share for personal computers. Microsoft Windows users don’t just want the platform, they want everything built on top of it.
The new Microsoft Windows
You may be surprised to learn that BlackBerry (TSX:BB)(NYSE:BB) has built the next big thing when it comes to platforming. But instead of personal computers, BlackBerry is focused on securing self-driving vehicles.
As our cars become more connected, they grow vulnerable to cyber attacks. When vehicles become completely autonomous, the hacking danger rises considerably.
BlackBerry’s QNX platform is specifically designed for this growing demand. Its Cylance technology, for example, uses artificial intelligence to detect threats before they even occur. These capabilities have helped the QNX platform to reach 150 million installations worldwide.
But like the early days of Microsoft Windows, growth has only just begun.
Automobile manufacturing is one of the largest industries in the world. Industry-wide revenue is in the trillions. But the future of driving is software, not hardware.
The majority of the top 10 car makers have already adopted BlackBerry’s technology. As self-driving capabilities grow, they’ll begin to rely more heavily on the company. Once installed, it’s unlikely that manufacturers will ditch this mission-critical software, especially as scale only benefits BlackBerry’s platform with additional data points.
Over the next decade, the QNX platform could be worth tens of billions of dollars. That’s only if it becomes the go-to product. But given its early lead, the future looks bright. Meanwhile, BlackBerry stock today trades at just $3.5 billion at writing..
You’ll need to remain patient, but BlackBerry looks ready to emulate the success of Microsoft Windows.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. David Gardner owns shares of Alphabet (A shares), Alphabet (C shares), Amazon, and Facebook. Tom Gardner owns shares of Alphabet (A shares), Alphabet (C shares), and Facebook. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Facebook, and Microsoft. The Motley Fool recommends BlackBerry and BlackBerry and recommends the following options: long January 2021 $85 calls on Microsoft, short January 2021 $115 calls on Microsoft, short January 2022 $1940 calls on Amazon, and long January 2022 $1920 calls on Amazon.
Fool contributor Ryan Vanzo has no position in any stocks mentioned.