Spotify primarily generates its revenue from advertisements and subscriptions, but it has been quietly developing a business focused on developer tools over the past few years. Backstage, a project open-sourced in 2020, is now utilized by over 2 million developers across 3,400 organizations, including companies like Airbnb, LinkedIn, Twilio, and American Airlines.
Backstage allows companies to create customized internal developer portals (IDPs), which organize infrastructure by integrating tools, applications, data, services, APIs, and documents into a single interface. Users can monitor Kubernetes, assess cloud costs, or check CI/CD status using Backstage.
The Cloud Native Computing Foundation (CNCF) accepted Backstage as an incubating project in 2022 and noted its high velocity and activity. Due to this momentum, Spotify is expanding its offerings with various premium tools and services.
Companies can use the core Backstage product for free, including open source plugins that enhance its functionality. In 2022, Spotify began selling premium plugins like Backstage Insights to display organizational usage data. Spotify also introduced Spotify Portal for Backstage, a premium version designed for organizations that require a managed setup.
The SaaS product is nearing general availability, with design partners such as the Linux Foundation and Pager Duty. Tyson Singer, Spotify’s head of technology and platforms, explained that Backstage serves organizations of all sizes, simplifying complex setups through its hosted version.
Spotify unveiled new premium Portal plugins including AiKA, an AI knowledge assistant initially developed for internal use. AiKA was created during a 2023 hackathon and is used by 25% of Spotify’s workforce to access company knowledge without relying on support channels. The tool encourages employees to keep documents updated and improves the system’s intelligence.
An alpha version of AiKA will soon be available to third parties, enhancing Backstage’s appeal as a premium product. Spotify is also working on Confidence, an A/B experimentation platform, with plans to integrate it with Portal through a plugin.
Spotify’s venture into developer tools builds on its history of creating its own platforms, like the Helios container orchestration tool, which was eventually replaced by Google’s Kubernetes. The development of Backstage aims to prevent similar transitions, positioning Backstage as the industry-standard IDP.
By open-sourcing Backstage and adding premium features, Spotify ensures the tool’s longevity and intends to build a sustainable business. Singer emphasizes the value already present within Spotify, aiming to establish a strong business model around these offerings.
