Salesforce has reached a significant company milestone, celebrating the 10th birthday of its AppExchange marketplace. To say the least, the AppExchange has been both successful and influential, helping drive Salesforce's massive growth and ecosystem, while prompting many other application vendors to launch their own marketplaces. In this post, I'll take a look back at some of the most important points in the AppExchange's evolution.
2006: The AppExchange becomes generally available, with 150 applications available to start from both Salesforce and partners, including Business Objects, Skype, Eloqua and BigMachines. Some 1,500 application installations occurred in the first week of availability, according to Salesforce. As is his wont, Salesforce CEO Marc Benioff unveiled a new slogan, heralding AppExchange as the arrival of "the Business Web."
In March, Salesforce joined the Eclipse Foundation and released an Eclipse toolkit for building, testing and debugging applications for the AppExchange.
In May, foreshadowing the 2007 launch of Force.com, Salesforce announced AppExchange OEM Edition.
2007: Salesforce rolls out its monetization program for AppExchange, which at the time was dubbed AppStore. (Benioff later "donated" the name to Apple and Steve Jobs.) In exchange for revenue share on closed deals, Salesforce would provide a set of e-commerce, marketing, billing and renewal services to partners selling products on the AppExchange. Under the arrangement, Salesforce customers who buy partner applications would receive a single invoice, with Salesforce distributing the payments to partners.
The program led to grumbling from partners, who felt some of the fees Salesforce planned to charge were too high, as CRN reported at the time. But the pushback didn't end up stalling the AppExchange's momentum, which was already mounting rapidly. As the CRN article noted, Salesforce offered partners something highly valuable:
With more than 30,000 customers and almost 650,000 paying subscribers (as of Jan. 31), the company controls a large pipeline of SaaS-savvy customers that ISVs covet.
2011: This year provided ample evidence the AppExchange had reached a major symbolic milestone with 1 million application installs. Also in 2011, the amount of venture capital raised by ISVs on the AppExchange topped $1 billion, although it's perhaps difficult to make a direct correlation.
2012: Salesforce announced plans for AppExchange Checkout, a service aimed at developers of lighter-weight applications that customers can purchase with their credit cards. Checkout, for which Salesforce partnered with payments processor Stripe, provides turnkey billing and renewals. The move reflected Salesforce's desire to attract individual developers or very small shops to AppExchange, rather than full-blown software vendors and systems integrators.
2013: In October, Salesforce rolled out Private AppExchange, which gave customers the ability to create private enterprise app stores their employees can use to download software needed for their jobs. In launching the product, Salesforce took a shot at competing enterprise app store products from the likes of BMC, Citrix and Embarcadero.
At Dreamforce 2013, Salesforce announced AppExchange Accelerate, a new partner program that uses a "pay-as-you-sell" model, meaning partners that use Salesforce's platform to build products don't incur ramp-up costs.
The same year, a survey conducted by consulting firm Bluewolf in conjunction with MIT's Sloan School of Management determined that 91 percent of Salesforce's customer base had installed at least one AppExchange app. In addition, the AppExchange reached 2 million application installs.
2014: In December, Salesforce launched AppExchange Store Builder, which is aimed at companies that have built public-facing applications but are unsatisfied with distribution through consumer app stores because of the lack of customization possible. Store Builder gives companies the ability to create multiple branded app stores with centralized management through the Salesforce back end.
2015: In April, Salesforce said the AppExchange had reached 3 million installs, a 50 percent increase in just two years.
Finally, in June, Salesforce overhauled its AppExchange partner program, with changes included a standardized revenue-share model, as CRN reported.
Today: There are currently 2,932 applications in the AppExchange, with 56 percent paid and 44 percent free of charge. Forty-one percent of the applications are oriented around sales. That figure underscores what Salesforce's core value proposition remains for customers, despite its multiple forays beyond CRM, even after 10 years of life for the AppExchange.
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