Salesforce.com Previews AppStore

Salesforce.com has strengthened its focus on AppExchange, revealing on Tuesday its approach for monetizing the on-demand platform and directory. The approach--coined AppStore--will provide developers and partners with a package of commercial services to market, sell, invoice, and deliver apps directly to customers through the AppExchange, according to the company. AppStore is also intended to provide customers with one source for trying, buying, and deploying applications on the AppExchange. AppExchange, which Salesforce.com unveiled at Dreamforce '05 in September 2005 (its general availability was announced in January 2006), has more than 430 applications from more than 230 partners. These partner apps, which were built using Salesforce.com's Apex programming language and platform, are integrated with Saleforce.com's apps. AppStore is "going to transform the AppExchange from a directory of applications to a true marketplace," says Ariel Kelman, Salesforce.com's senior director of platform product marketing. "It's, on one hand, the next chapter in the AppExchange, as it delivers more customer and partner success. But it also outlines how Salesforce.com is going to be able to monetize a lot of the success that our customers are having with a lot of these applications and [will] really show our partners that we're very serious about the AppExchange." AppStore incorporates two components of the vendor's AppExchange monetization strategy: AppStore Referral Program and AppStore Checkout. The AppStore Referral Program will essentially provide partners with access to marketing services such as premium placement on search and AppExchange categories. The Referral Program will be available in two forms: Standard Referral, requiring a 10 percent referral fee on all closed transactions in the first year, and Premium Referral (which features perks not available under the Standard Referral option like demand generation programs), requiring a 25 percent referral fee on closed transactions in the first year. "What we're trying to do is give our partners a complete set of services to market and sell all of their applications directly to our customer community," Kelman says. AppStore Checkout provides commerce capabilities including online ordering, billing, invoicing, and collection services. "Our customers are going to be able to try, buy, upgrade, and renew all of our partner applications that participate in this program in a seamless fashion," Kelman says. "What our customers have been asking for is a one-stop shop for all of these applications, and our partners have been asking us to help them provide a seamless experience for our customers to buy from our partners. This is a great example where there is an intersection of customer and partner success." "In the larger scheme of things, it's the second half of the rollout of utility computing," says Denis Pombriant, founder and managing principal of Beagle Research Group. "The first part was saying 'here's the technology.' The second part is more, 'here's the nuts and bolts of how things are going to work, and here's the business model for monetizing the value of this technology that we've created.'" It'll be a while before AppStore's complete set of services will be available: Standard Referral is slated for availability in February, Premium Referral in August, and AppStore about a year from now in December 2007. "The approach with this announcement is to announce the AppStore vision, really to preview it for our customer and partner community because we want to involve our customers and partners very deeply in the development process of this," Kelman says. AppStore is "the next step in building out Salesforce.com's partner network," says Rebecca Wettemann, vice president of research at Nucleus Research. "The AppExchange was a great way to get everyone in one place. What this does is put some structure around how different organizations can work with Salesforce.com." Related articles: Salesforce's Dreams of Apex Salesforce Mashes Analytics in the Snow Bringing Your Partners In On the Deal