• January 17, 2006
  • By Marshall Lager, founder and managing principal, Third Idea Consulting; contributor, CRM magazine

AppExchange Goes from Hype to Happening

Salesforce.com launched its Winter '06 release today in San Francisco, and revealed a series of partnerships that extend the company's reach into strategic verticals and beyond the normal bounds of CRM. CEO Marc Benioff introduced AppExchange by saying, "Welcome to the business Web," remarking on the enterprise application marketplace's quick growth and uptake by both end-user companies and developers. "One only has to look at the impressive AppExchange partner listing to clearly see the computer industry shifting to the on-demand model," Benioff said in a written statement. "AppExchange and our on-demand partners represent billions of dollars in company resources devoted to managing and sharing business information on demand. With its ability to leverage the creativity of our entire extended community of success, the business Web truly is the end of software." Phill Robinson, senior vice president of global marketing, can quantify Benioff's enthusiasm. "AppExchange goes live today with 160 listings of applications and modules, which is twice the total from the start of our pilot program," Robinson says. "There have been over 80,000 test drives since the September 2005 debut, and more than 1,800 installations from AppExchange in the [past] week." Robinson also notes that more than 500 ISVs have inquired about joining the AppExchange program to build and provide applications. His description of the business Web is of a phenomenon whose development is similar to what he terms the consumer Web. "Over the last few years, a number of platforms have emerged for the consumer: Ebay, Skype, iTunes, and Amazon.com," Robinson says. "Executives are now realizing the value of running their businesses the way people run their lives. The era of traditional software is over." Robinson also lists a number of partnerships announced today by Salesforce in support of this theory: Skype will integrate with Salesforce to provide built-in VoIP, presence information, conference calling, and other digital telecom services; Adobe will deliver secure document creation, management, and transportation; Business Objects will make Crystal Reports XI available for Salesforce users; and Tata Consultancy Services, one of India's largest global consulting firms, will provide consulting on demand, including an artificial intelligence "case-based reasoning solution." In addition to these official partners, other vendors and customers will be able to build and deliver their own applications via AppExchange, testing them in the Salesforce Sandbox, a duplicate operating environment that mimics the user's installation but does not risk permanent changes to the original. "This is a pretty interesting play," says George Goodall, research analyst for Info-Tech Research Group. "There is great desire today among enterprises to simplify their infrastructure, and AppExchange fits well with that trend." Goodall is surprised at how quickly the new development and delivery model has advanced, and notes that it reaches beyond CRM. "A lot of the services on AppExchange are positioned to extend the paradigm for Salesforce.com beyond ERP, CRM and related applications," Goodall says, referring to available applications like Remend's service for real estate brokerages. The question, according to Goodall, is whether Salesforce can make the next step. "The time for extending the on-demand model to all areas of business has come. But is Salesforce.com the one to pull it off?" Related articles: Getting Testy in the Sandbox
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