Last week, the MD of a well known UK software house and I (we agreed it is better to keep his identity anonymous for this purpose and it’s not Sage) were discussing the salesforce.com/AppExchange model. He made a comment I parked to revisit:
Salesforce.com’s model is not really new. Most software houses have provided add-on capability for years.
During my discussion with Paul Stobart, he pointed to the many add-ons there are for Sage products. All this is perfectly true but I believe my correspondent fails to recognise one of the central questions the Irregulars discussed: is it a clever marketing ploy or a smart technology play? We concluded it was both without determining the weight people might apply to these alternative thoughts.
The key business differentiators for me:
- SF.com allows any developer free access to its ‘stuff’ subject to jumping through validation hoops.
- It makes no charge to ISVs for the pleasure, making it attractive to very small companies who might otherwise baulk at being taxed for access to an API yet who have great ideas. As Ismael points out, Charlie Wood over at Spanning Partners has benefited from this and it is a model that could be readily extended to other vendors. Most traditional software houses make a variety of charges both to the ISV and customer for add-ons.
- Add-ons appear as extra tabs to the SF.com service so for all perceptual intents and purposes, there is no integration issue to consider. Ismael will, I’m sure talk to the business process issues but that’s a different story.
- In making API access open and free, SF.com is saying to customers: ‘We know there’s no one-size fits all and we’re not going to pretend that’s the case. But what we will do is make it as easy as possible for you to decide what you need and deliver the means to quickly assemble your functional requirements. As those requirements change, we’ll also allow you to plug in AND out.’
- No guessing required – it’s all neatly wrapped up and presented as part of the customer>ISV ecosystem.
If all of that is clever marketing that effectively puts out a sprat to catch a mackerel, then fine. Why not? It’s certainly smart use of technology to deliver to customer requirements. And it’s pretty generous of SF.com to effectively allow ISVs free use of its marketing machine while making it plain to customers ‘We’re on your side.’ It’s up to customers to decide whether the total cost is worth the benefits they derive.
As an SMB, I only see upside.
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