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Enterprise App Store Difference

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Posted May 15, 2015 By Paul Rubens     Feedback

With enterprise app stores like Salesforce's AppExchange, it's all about the ecosystem.

Online app stores have exploded onto the technology scene over the last half a dozen years. More recently enterprise app stores have become a thing. As a result, millions of people download and install applications onto their mobile devices, laptops and desktop computers every day.

Apple's App Store is the largest and highest profile app store, but it wasn't the first major online app store when it launched back in 2008. That title belongs to AppExchange, a business app store launched in 2006.

It's worth taking a closer look at Salesforce's AppExchange. While it's similar in concept to Apple's App Store, with a catalog of different types of apps that can be installed and run almost instantly, there are a number of notable differences.

Salesforce and Apple: Different App Store Approaches

No upfront purchase necessary. Unlike the App Store - and indeed almost any other commercial app store - you don't have to buy anything before you can start using Salesforce's AppExchange. In contrast, Apple's App Store is only for existing Apple hardware customers and you can only use Microsoft's Phone Store if you already have a Windows phone.

But the AppExchange contains standalone apps that anyone can use without ever being a customer of Salesforce's CRM, marketing or other products. An example of this is a very specialized app targeted at owners of scuba stores, which runs on Salesforce's platform and makes use of its infrastructure. Scuba store owners could use this instead of - not in addition to - Salesforce's CRM and other business products.

Built around core offerings. Many apps the store offers are ones that are designed to be used by Salesforce's existing customers, however, adding features or functionality to the company's core offerings. Two of AppExchange's most popular apps fall into this category. One is called DocuSign, an application which allows users to sign documents on any device. The other is Conga Composer, which generates proposals, contracts and other documents.

This shows the diversity of AppExchange users, ranging from small companies looking for a single specialist app to run their business to large multinational corporations that use the Salesforce suite of SaaS applications in industry verticals including retail and healthcare.

Sold on a subscription basis. Another key differentiator: AppExchange is not really a store at all, given that no applications are actually for sale. Consistent with Salesforce's software-as-a-service (SaaS) philosophy, all apps in the store are available via a monthly subscription basis and are accessed from the cloud rather than downloaded to a device.

AppExchange also operates as a directory, with consulting partners, developers and jobs on offer as well as apps.

So what exactly is the purpose of enterprise app stores in general, and the Salesforce AppExchange in particular? Are they designed simply to be money-making ventures for the companies that run them?

Enterprise App Store All about the Ecosystem

"Salesforce is a platform company, and to be a viable and dominant platform we have to have a robust ecosystem," explained Jim Sinai, senior director of AppExchange and platform marketing at Salesforce. "We realized this, and that's why we launched AppExchange. At the time it was the first enterprise cloud market place and today it's the largest."

While Salesforce's app store is the largest enterprise cloud marketplace, what's striking is the extent to which it is dwarfed by Apple's consumer-oriented App Store. To put it in to context, AppExchange will shortly celebrate its three millionth app install and now boasts over 2,700 apps in its catalog. By contrast, about 8 million apps are downloaded from the AppStore every day, and Apple's store celebrated its 50 billionth download in 2013.

The two app stores target completely different markets with very different products, Sinai said. "Apple's customers are buying games for their commute. AppExchange customers are making investments in their companies."

Enterprise App Store Pricing and Security

Due to its enterprise focus it's essential that apps offered on AppExchange are secure. If appropriate security measures aren't taken, there's a risk of malicious apps being offered - as has happened on Google Play and other consumer app stores.

Sinai said an internal security team vets every app on the AppExchange. "So when you install an app you can be sure it has been vetted by Salesforce using a combination of humans and technology," he said.

When it comes to pricing, there is a surprising lack of transparency with AppExchange. While most app stores make it easy to make a purchasing decision, many of the apps on AppExchange are advertised with pricing available on request. It's interesting to note that while 75 percent of App Store apps are free, only 44 percent of apps on Salesforce's AppExchange are zero cost.

In terms of the cut that Salesforce takes from its vendors for listing apps on its store, things are far less clear than the straight 30 percent that Apple takes. "We have a pay-as-you-sell model so there are no upfront costs for developers," Sinai said. "We have a revenue share figure that we pre-arrange with each developer; there's no set amount."

The AppExchange ecosystem has generated over $1 billion for and its AppExchange developers since its inception, Sinai said.

Other Enterprise App Stores

Other companies have adopted the Salesforce AppExchange's enterprise app store model. Here are a few:

  • IBM's Cloud Marketplace includes some 140 software-as-a-service applications, as well as cloud platform and infrastructure services for developers
  • Oracle Cloud Marketplace, offering partner apps for Oracle's Sales Cloud, Marketing Cloud, Service Cloud, Talent Management Cloud and more
  • SAP Store, which the software giant introduced earlier this month and which includes apps for SAP's HANA cloud platform, the SAP Learning Hub and SuccessFactors Perform & Reward, among others
  • ServiceNow App Store, which features more than 80 certified apps and integrations created by technology partners, solution providers, systems integrators and service providers
  • CDW App Marketplace, which includes about 160 apps from CDW partners like Lextech Global Services, ArcTouch, and also development platforms, toolkits and services for those who prefer to develop their own apps

In addition, some companies opt to create their own app stores, essentially portals that allow employees to download tested and trusted applications. Many mobile device management providers include app store capabilities as part of their product offering. Vendors providing enterprise app store services include Apperian, Tangoe and Good Technology.

Paul Rubens has been covering enterprise technology for over 20 years. In that time he has written for leading UK and international publications including The Economist, The Times, Financial Times, the BBC, Computing and ServerWatch.

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