Salesforce has figured out a way to monetize the AppExchange marketplace. Today at a lunch event in San Francisco, CEO and chairman Marc Benioff announced AppStore, an online store for enterprise software as a service (SaaS).
AppStore will be the one-stop shopping place for on-demand software, starting in Q1 of 2007. Developers and partners will be able to sell their programs directly through the AppStore and Salesforce will make a referral fee, based on the performance of the product.
“AppExchange has been a big hit but we’ve consistently had people ask us, ‘But what is your strategy to monetize AppExchange?’” Benioff said. “So we thought, ‘What if we took the iTunes concept to complete the transaction?’ This has been our vision for a long time. In fact, we bought the AppStore domain before we ever launched AppExchange.
Currently, AppExchange has over 430 applications from over 230 Salesforce partners, built on the Apex on-demand platform. AppStore was designed to allow partners and customers find each other and complete their transactions easier.
Software in AppStore is listed by type such as Human Resources or Mapping software. Users will see sponsored results before general listings. The sponsored results will be the ones paying higher commission to Salesforce. Once a program is selected, an administrator can complete the purchase with a Salesforce login, which knows how many users the administrator typically purchases for.
AppStore was modeled after Amazon, eBay, and iTunes.
“It’s a lot like iTunes but instead of Mariah Carey, you may have Composition Management,” said George Hu, chief marketing officer for Salesforce.
















Comments
A very good news for software developers around the world. I can imagine that many software developers living in the third world countries would get happy to hear this news. I hope that AppExchange becomes a very good market place for the small players as they need this kind of support most.
I’d take Composition Management over Mariah Carey any day.
Razib,
A true ‘global village’ in the making. Marshall McCluhan would be proud.
How long before google takes them out? They sure beat google to the punch with this platform and it’s free trade premise(free to the extent your audience is global - NOT free in terms of no cost because salesforce has to get theirs. which IMHO, % wise seems to be excessive).
Can people sell any type of software on the web site or only plugins for appexchange?
This is certainly a neat way to democratize the enterprise software business which has a long sale cycle and big barrier of entry for small businesses anywhere.
This is a pretty nifty idea. I think it could do well.
I’m not sure I’m seeing the iTunes-link here. How is this like iTunes more than it is like any other online store?
As the software world moves from the On-Premise model to the On-Demand (or SaaS) model Salesforce has consistently been a couple of steps out in front of the market. I don’t see any other companies that have made the investments in creating a similar community of On-Demand business software developers, a new scripting language, start-up support and now some back-office capabilties as well. They also spent a lot of time vetting our application in order to be certified with a 6-week review process including security reviews and checking the health overall of our business, which must give their customers more comfort.
I guess I’m not as optimistic as some of the commentary that this is great for high-quality developing-world software companies, though, because their certainly is a capital requirement to make this relationship valuable. Everything at Salesforce comes with a price such as their roadshows and DreamForce events. In our experience these have brought in true leads that have delivered positive ROI and Salesforce actually made the effort to drive traffic to the partner booths. So in the end it has been well worth the investment for us.
We see salesforce perfectly positioned to be one of the first companies to have a viable solution to one of the biggest problems we see in the SMB market.
Single-Sign-On
SMBs can not afford to run all solutions in-house and tie them all to a nice master directory - so they have to make due with a basket full of discrete solutions - each with their own login and password. At the end of the day, each person has 5+ logins to manage.
With AppExchange new solutions can be tried and eventually adopted without the credential overhead.
I can’t wait until Google(Jotspot) Yahoo!(DabbleDB?) and Microsoft(AccessLive?) throw in their entries in this battle.
The company that wins the singe-sign-on market share takes all.
Oops, messed up my name in the previous post. If Techcrunch admins can correct it and give me a ‘y’ in Larry - that would be awesome.
Yes, a good news for developers, especially for those in China and India…
-Mike
Tech Tutorials: http://www.hotcoding.com
We have now lost two full days ability to deliver our AppExchange product for sale or for trial, due to an unexplained problem afflicting only “managed” apps. Our customers think it’s our fault; we looked like fools this week for suggesting they visit the AppExchange to access the product.
I would think the AppExchange community might generally be deserving of some coordinated communication when their business is impacted to this degree, but there’s been nothing beyond what we’ve been able to drag out of the few good souls willing to respond to inquiries, and they don’t know much.
That technology fails, we understand. The failure to communicate, we do not. There’s never a nanosecond’s delay when it comes to soliciting our participation in pricey marketing programs.
Leave Comment
Commenting Options
Enter your personal information to the left, or sign in with your Facebook account by clicking the button below.
Alternatively, you can create an avatar that will appear whenever you leave a comment on a Gravatar-enabled blog.