Salesforce.com puts Microsoft in its sights with AppStore

Angus Kidman
Friday, 15 December 2006 02:11

Your IT - Home IT

Online CRM vendor Salesforce.com has an immodest ambition for its new AppStore initiative: knocking off Microsoft as a major enterprise development platform.

AppStore, announced earlier this week, allows developers to create applications which integrate with Salesforce.com's existing CRM and sales management platforms, and then sell them directly to the company's existing customer base. Salesforce.com takes a commission from the monthly access fee for each application.

"There are some really large and really entrenched platforms out there, and their magic has been building out communities of developers over time," Doug Farber, vice-president of operations for Salesforce.com, told IT Wire, identifying Microsoft as an obvious example. "This is the same model, only for the on-demand space."

From a customer point of view, the main advantage of the AppStore model, especially compared to its earlier incarnation as AppExchange, would be a reduction of the number of partners they need to deal with. "People really wanted single invoices," Farber said.

However, that benefit will be some time in coming. Checkout, the integrated payment system for AppStore applications, won't be rolled out until the end of 2007. "We're still working that mechanism out," Farber said.

Central to the model is Apex, the Java-like development language which will allow IT shops to build their own applications on top of Salesforce.com's existing hosting infrastructure. Apex was launched at Salesforce.com's Dreamforce conference in October and is currently in beta.

Customers have been generally enthusiastic about the model. US health care organisation Kaiser Permanente already has a dedicated team working on Salesforce.com customisations.

"They are going to take [Apex] and run like hell with it," project director Bernie Sims said during the Dreamforce launch. "We may well be able to do some levels of integration that wouldn't be possible otherwise."

However, Sims noted that a degree of caution would be required. "You need to make sure you're not jeopardising the quality of your data," he said.

Cliff Bell, CIO for Phoenix Technologies, is also keen. Having rolled out Salesforce.com to around 250 users after several other CRM ventures within the Phoenix failed, he now wants to shift other business applications such as financial management onto a software-as-a-service (SAAS) model, and sees Apex as a useful adjunct for integrating those different systems.

The AppStore program has attracted some criticism for its commissions structure, which range from 10% to 25% per month. Farber said the scheme was designed after extensive focus groups.

"We're not out to gouge our partners or our customers," Farber said. "We just want more subscriptions."

The current three-tiered program is likely to be expanded over time. "We'll probably create more tiers as we grow," Farber said.