Salesforce CEO's vision for 'business Web'

The company officially launched AppExchange, first discussed in September, here on Tuesday at a media and customer gathering. The software marketplace, now generally available, is designed to allow Salesforce.com customers and partners to distribute their applications via Salesforce's hosted-computing platform.

Salesforce Chief Executive Marc Benioff hailed the move as a key development in the company's push to recast the World Wide Web as the "business Web," bringing many of the consumer-oriented innovations of the Internet, such as "mash-ups" and self-publishing, to business users.

"The consumer Web gave rise to business Web," Benioff said during a keynote speech. "The consumer Web is really where the action has been. It's how we entertain ourselves. It's how we shop. How do we do that for our business users as well?"

Benioff spent the next hour and a half onstage attempting to sell AppExchange as the answer to that question. The service includes software development tools and programming interfaces that allow developers to create mash-ups--or special hybrid applications--that combine sales data from the Salesforce system with, for example, Google Maps.

Benioff showed off AppExchange's capabilities with a demonstration of Territory Management, a new mash-up the company developed using Google Maps. The program grabs customer records from Salesforce's hosted database and renders each customer account on a map of the U.S. as a small, color-coded "balloon." He showed how to retrieve more information about accounts by scrolling over balloons, and the whole program retained the same look and feel as other Salesforce's applications.

"I love the mash-up capability because it's a great example of the business Web that we never saw in the previous generation" of enterprise software, Benioff said.

The company also demonstrated a new partnership with Skype Technologies, a free Internet-based phone service. Via AppExchange, Salesforce customers can link Skype with customer records stored by Salesforce to initiate free conference calls over the Web. A similar agreement with Adobe Systems lets customers put business documents into Web-friendly PDF (Portable Document Format) files from their Salesforce environment.

Adobe Systems and Skype Technologies are among Salesforce's initial partners participating in AppExchange, which together offer more than 160 on-demand business applications through the marketplace. More than 1,800 customers have already downloaded programs through AppExchange and another 80,000 have tested them, Benioff said.

Video: Benioff hatches software ecosystem
"The iPod is to the iTunes Music Store what AppExchange is to the Salesforce.com platform."

In addition to downloading and purchasing applications, companies can create and distribute them via AppExchange. Developers can give their programs away or charge for them. Salesforce will also host the programs on its computing infrastructure for free, though Salesforce will charge some developers a small certification fee to cover its quality control process.

Benioff likened the service to a blog for software code, giving developers the tools to promote and distribute their creations. Salesforce also plans to incorporate RSS (Really Simple Syndication) technology, allowing customers to subscribe to virtual software catalogs and monitor them for new programs, he said.

"Creating applications should be as easy as producing and publishing blogs," he said onstage.

Benioff blasted rivals SAP, Oracle and Microsoft, claiming they've missed the boat on the "business Web."

"A lot of companies aren't here," he said, pointing to a slide listing the three rivals' names. "They're still designing monolithic applications. Their technology is so big, it can't fit on CDs. They have to ship DVDs."

Salesforce, which hosts its software for customers at its own data centers, doesn't ship any CDs or DVDs. This is one of the company's big selling points--a feature that removes the hassle of loading, updating and monitoring complex business systems, Salesforce says. Nearly 19,000 companies have signed up for the subscription service, including ADP, Cisco Systems, Merrill Lynch, Sprint and Symantec.

The company hopes AppExchange will encourage its customers to buy more licenses and therefore boost revenue. To use any AppExchange applications, including those developed by partners, customers must buy Salesforce licenses or "seats" for every user. But customers can test any of the applications for free.

"The ultimate end goal (for Salesforce) is to proliferate their seat count," said Brent Thill, an analyst at Prudential Securities.

In addition to AppExchange, Salesforce introduced a new version of its customer relationship management software, called Winter '06, and a set of software development and testing tools called Sandbox. Winter '06 features a new user interface and applications, including territory management and customizable forecasting.

Sandbox, announced last month, provides a replicated version of customers' Salesforce systems for testing and training purposes. It's available for either $18 or $25 a month per user, depending on the version.