Spotify generates the vast bulk of its income from ads and subscriptions, but for the past few years the music-streaming giant has also been quietly building out a developer tooling business. Backstage, a project it open-sourced in 2020, has been adopted by more than 2 million developers across 3,400 organizations, including Airbnb, LinkedIn, Twilio, and American Airlines.
Backstage helps companies build customized “internal developer portals” (IDPs), bringing order to their infrastructure chaos by combining all their tooling, apps, data, services, APIs, and documents in a single interface.
Want to monitor Kubernetes, view cloud costs, or check your CI/CD status? Enter Backstage.
The Cloud Native Computing Foundation (CNCF), which accepted Backstage as an incubating project in 2022, reports that Backstage was one of its top 5 projects last year in terms of velocity and activity. And it’s this momentum that is leading Spotify to double down, with various premium tools and services on the horizon.
Oven-baked
Companies can already use the core Backstage product for free, including an array of open source plugins that extend its functionality. But Spotify started selling premium plugins in 2022, such as Backstage Insights, which displays data related to active Backstage usage within an organization. And last year, Spotify got serious about its dev tools business play, announcing Spotify Portal for Backstage in beta: a premium, oven-baked incarnation for those lacking the resources (or inclination) to set everything up themselves. “Backstage in a box,” is the general idea.
The fully managed SaaS product is now edging toward general availability in the coming months, with design partners and customers including the Linux Foundation and Pager Duty already on board.
“We discovered that there were a lot of different customer profiles,” Tyson Singer (pictured above), Spotify’s head of technology and platforms, explained to TechCrunch in an interview at KubeCon last month. “Our original theory was that Backstage was going to be bigger for mid-size to large enterprises dealing with a lot of complexity, but we found that small companies also see these same problems. And so having a hosted version makes everything so much easier.”
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Spotify also teased a couple of new premium Portal plugins at KubeCon, including AiKA (“AI knowledge assistant”), which is basically a chatbot initially developed internally for its own employees.
The result of a 2023 hackathon, Spotify says that AiKA is now used by 25% of its workforce weekly to query the company’s collective knowledge base. So rather than bombarding support channels in Slack, employees can just ask AiKA, which is trained on its own internal documents and data.
Singer also says that AiKA’s utility — providing instant answers to questions — motivates employees to make sure all their documents are up-to-date because it makes AiKA smarter. If someone doesn’t get a good response to a question, they can see what source was used in the response, and provide feedback to ensure the source document is improved.
“It [AiKA] kind of sounds simple, but it’s powerful, and we got super-high adoption very quickly internally,” Singer said. “[I think why is because] it’s not just developers that are using it — everybody in the R&D organization has gotten into it, which also brings more people into the Backstage ecosystem. But also it creates this very positive fly-wheel between quality and discovery.”
Spotify has confirmed that an alpha version of AiKA is set to launch for third parties imminently. And while it won’t be at feature parity with its own internal version initially, it should go some way toward bolstering Backstage’s stickiness as a premium product in the long run.
Growing confidence
Backstage isn’t the only home-grown developer product Spotify is looking to monetize. Some 20 months ago the company announced Confidence, an A/B experimentation platform that has remained in stealth ever since.
“We have a few customers who are paying [for Confidence], but we are really focused on Portal right now,” Singer said. “We’re being very selective about the customers that we let in the door.”
According to Singer, Spotify will have more to say about Confidence later this year, though he did hint at potential synergies between Confidence and Portal in the form of a plugin that brings some simple feature-flagging functionality into Portal.
When all is said and done, creating a developer tooling side-hustle on top of its day job as an online music emporium has surely been a major undertaking. But there has been good reason for all of this. More than a decade ago, Spotify created its own container orchestration platform called Helios to support its transition to a microservices architecture. While Spotify eventually open sourced Helios to spur wider uptake, it ultimately lost out to Google’s Kubernetes, which went on to conquer the world.
Spotify ditched Helios and joined the throngs on Kubernetes — a “painful” decision at the time. And what we’re seeing now with Backstage is a response to that: an effort to ensure that Backstage is the industry standard IDP, and that its own developers aren’t forced to transition to something else that comes along.
“When you have a product that gets replaced by an external product, particularly an open source one, that migration cost is just tremendous,” Singer said. “And so we decided that we don’t want that to happen to a product that is literally the foundation of how we do development at Spotify.”
While Spotify went some way toward heading off that problem when it open-sourced Backstage in 2020, the premium stuff that’s now following is really to ensure that it sticks.
“We’re a business — and we also want to build a healthy business on top of all this,” Singer said. “We’re not just trying to cover costs. At the end of the day, we have a lot of value trapped inside Spotify right now.”
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