Special report: 'eBay of applications' goes live

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Salesforce.com's AppExchange has gone live, the first tangible move to turn the company's on-demand CRM service into a development platform for Web applications.

The company rolled out AppExchange in the US along with the Winter '06 edition of its core CRM Application. The formal UK launch of Winter '06 is in London next week.

"Our vision is to take killer applications on the Internet and transform that into a platform, just as our predecessors did with the PC," explained CEO and Chairman Marc Benioff. "To do that we need a platform where developers can create and publish applications that are secure and scalable in global implementations with local functionality like currency. Also, we want mash ups, like Craigslist integrated with Google. We want to have those mash-ups, but a lot of them, automating business."

Salesforce.com argues that AppExchange and the Winter 06 release creates the "business web", akin to what it dubs the consumer web. "Why can't there be an eBay of enterprise applications and an iTunes music store of enterprise applications, where we can write to the services we need to run our business?" asked Benioff. "If it's so easy for us to get our music and news, how do we do that for our business as well?"

Benioff added that AppExchange gives Salesforce.com a sustained lead over CRM rivals Oracle, Microsoft and SAP. "A lot of companies are not here," he stated. "They are still back talking about stacks of applications, delivering it on old technology and delivering stacks on old CDs. The technology is so big you have to ship it on a ton of DVDs. You are not able to create all this synthesis or leverage."

General availablity of the AppExchange makes good on a commitment made last year. "We had to rebuild our architecture…MultiForce was the first version of AppExchange operating system," said Benioff. "We also had to rebuild our software. We have installed two huge data centers that are now running Salesforce Winter '06 release – that's a complete rebuild. After that, we wholesale replaced all our software and put that onto new hardware. That's all completed, all running on Winter '06 new architecture."

So who's using AppExchange? Tools are free to developers and ISVs to use and provides them with a free hosted infrastructure on which to offer them. There are now 160 ISV partners, which includes Vertica Response which announced that Raising More Money Inc. has deployed VerticalResponse for AppExchange via the salesforce.com AppExchange.

VerticalResponse for AppExchange provides Salesforce users with an integrated toolset for creating and launching email and direct mail campaigns. The intuitive application is supposed to simplify the entire workflow process so users can produce successful campaigns in a timely and cost-effective manner.

"We have a substantial database with close to 28,000 opt-in subscribers that we communicate with multiple times each month, so when researching Salesforce as a CRM solution, the ability to send and track large email blasts was a 'must have' requirement," said Jeff Lopez-Stuit, Director of Information Services for Raising More Money, which trains and coaches nonprofit organisations on raising sustainable funding from individual donors, explaining why they went with VerticalResponse.

Also on board is ShareMethods which has announced the ShareFree service for salesforce.com’s AppExchange. Built on the AppExchange on-demand platform, ShareFree for AppExchange provides advanced document management and collaboration capabilities for sales and marketing teams of small businesses and workgroups.

Elsewhere Talisma announced that Five9, Inc., a provider of on-demand call center products, has selected Talisma Knowledgebase from AppExchange. Talisma Knowledgebase for AppExchange provides Five9 with a knowledgebase, and Five9 employees will use Talisma Knowledgebase to answer customers’ questions when they call or email.

Another backer is USA.NET, an eMessaging service provider, which announced Hosted Microsoft Exchange for Salesforce.com's AppExchange, an on-demand application sharing service. USA Hosted Microsoft Exchange solution provides email, calendaring and collaboration services without having to install or maintain any onsite hardware or software.

"We see offering USA.NET solutions via the AppExchange as a wonderful opportunity to introduce Salesforce.com's large and growing install base to the benefits of hosted Microsoft Exchange," said David Ramon, President and Chief Executive Officer, USA.NET. "Our commitment to operational excellence, customer service, and years of experience hosting Microsoft Exchange for small to medium business customers is a natural fit with salesforce.com's customers."

"The success of this new Business Web, as the company terms the phenomenon, paves the road for salesforce.com to move from a CRM application vendor to more of a platform provider," reckons AMR Research analyst Robert Bois. "In this model, salesforce.com will increasingly rely on partners to offer non-CRM, niche, and industry-specific functionality.

"The company has invested heavily the past year in core infrastructure technologies to enhance integration, customisation, and development. However, it still recognizes it cannot abandon its roots and must continue to enhance and innovate upon its core CRM applications. After all, one of the greatest benefits of Software as a Service (SaaS) is that customers have lower vendor-switching costs and can readily move to another provider that more effectively meets its functional needs.

"The ecosystem of partners flocking to Salesforce.com further validates the influence the CRM vendor exerts on its customers, while we continually see customers build long lists of application providers exclusively through the salesforce.com partner list. Current and prospective salesforce.com customers should feel very secure in doing business with a vendor with such influence over the SaaS ecosystem.

"That being said, enterprises evaluating CRM applications for long-term use should consider vendors first based on functionality, usability, and business fit, leaving the deployment method as a secondary decision. While other CRM vendors such as RightNow, Siebel, and Microsoft offer multiple deployment options, salesforce.com stands steadfastly by its decision to exclusively sell through the SaaS model."

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By novius
20th Jan 2006 16:02

As a salesforce partner, I'd have to say that AppExchange looks like a winner. Customers can preview and then install Clicktools very easily. Whilst the integration is a challenge, for true on demand apps it's not too complicated.

This thing has real potential.

Dave Jackson
www.clicktools.com

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