Salesforce.com Introduces New App Marketplace For ISVs

Salesforce.com has extended its on-demand computing platform with a new feature that gives ISVs another way to sell more of the services-oriented applications they develop.

The company has set up a new program, called AppExchange, that's modeled on eBay or the iTunes music store, providing a destination where Salesforce customers and developers can test, run and purchase new on-demand applications.

Salesforce.com CEO Marc Benioff unveiled AppExchange during his opening keynote address at the company's Dreamforce '05 conference, which began Monday in San Francisco. About 3,000 Salesforce.com customers and partners are attending the event, which features three days of seminars, demos and social gatherings.

Benioff opened with a mention of the two big business news items of the day: Oracle's planned purchase of Siebel Systems and eBay's intent to purchase Skype, both of which were announced on Monday. Benioff says the Oracle deal, in particular, bodes well for Salesforce.com.

"Consolidation in the client-server space is creating all kinds of new opportunities for on-demand computing," he says. "All over the world people are beginning to use on-demand; not just small and medium-sized companies, but very large companies as well."

He underlined this with Salesforce's most recent quarterly numbers --which show that the company now has almost 17,000 customers and more than 308,000 subscribers -- and with the guest presenters from his keynote address, all of whom were from large organizations.

Benioff welcomed Lew Tucker to the stage to help him demonstrate the new AppExchange, which is live now at www.salesforce.com/appexchange and will be formally released this winter. Tucker was a longtime Java developer at Sun Microsystems and now is a vice president of Salesforce's AppExchange division.

"This could be even bigger than Java because you can build such a wide range of applications and disseminate them across the industry," Tucker says. "I'm psyched as hell about this."

He showed the audience how AppExchange works much like e-commerce sites, such as the iTunes music store or Amazon.com, offering user reviews of each application and letting visitors "test drive" them, much like online shoppers can listen to song snippets before buying a CD. There currently are some 70 applications available for sale on the site, with many more to come. The ISVs who develop the applications will be able to sell them through the site, with Salesforce taking a small "platform fee."

"We will see a wide range of applications, all running in the Salesforce.com platform you already have," Benioff says. "It's a tremendous opportunity for ISVs to create a marketplace and an economy of on-demand applications, and 100 percent of the proceeds go to them."

Woody Driggs, managing partner for Accenture's systems-integration business, said his early assumptions about the potential of on-demand computing have been shattered by the performance of Salesforce and other providers.

"I was a skeptic a few years ago about whether our enterprise customers would take on the on-demand model, but I'll be the first to admit I was wrong," he says. "The best-of-breed business model is changing, and we have to change right along with it. We're in the process of deepening our skills around the deployment of Salesforce applications."

Dennis Lum, vice president of channel strategies and systems for Kaiser Permanente, a $28 billion not-for-profit health-care provider that serves 8.25 million members, says the key for large organizations making the move to on-demand applications is making the change as comprehensive as possible.

"You can't have the sales transformation from the top down; it has to happen across the organization," he says.