Salesforce.com is taking another step in its quest to become a dominant platform for enterprise applications with the announcement of Apex, which opens up its multi-tenant, on demand infrastructure and an enhanced programming language to any developer. The announcement takes place tomorrow at the company's Dreamforce conference, with live testimonials from Michael Dell, Maynard Web (CTO eBay), Bob Suh (CTO of Accenture), and other industry executives.
“We have a vision for millions of applications on demand,” said Kendall Collins, senior vice president of product marketing at salesforce.com. “Apex will give people unburdened freedom to develop an entire universe of applications never seen before. We are popping the top off of our platform, and with the advanced logic and the capability of our programming language, developers can write inventory management, ERP and transactional applications like ecommerce.” Application developers can also sell their wares via salesforce.com’s AppExchange marketplace.
Salesforce has a long way to go to reach a million applications on its platform. AppExchange has about 400 products, which have hooks into salesforce.com’s on demand CRM solution. CEO Marc Benioff and company hope to create a community of developers that will customize, package and share their code on Salesforce infrastructure. “The eBay analogy is more relevant than ever,” Collins told me. “As eBay added more products, more consumers and buyers showed up and then new sellers. It’s viral growth.”
Enlarged image of Apex development enivronment
Collins asserted that salesforce.com’s platform, which is proprietary, is a much better model than open source. “Open source doesn’t provide the components of the user interface, and our model opens the community to more innovation and dramatically reduces the cost and complexity associated with developing and running an application,” he said. Collins is right about the benefits of using an on demand platform, treating hosting like a utility service, but to claim that salesforce.com’s allowance of “unlimited” customization to its proprietary software is equivalent to the free and open source software and community development model is off target.
Like a commercial open source company, Salesforce makes it money on subscription fees. The difference is that the software developers create requires a Salesforce subscription. You can’t take your code, as in open source, to another hosting provider or host it yourself. If Salesforce is able to deliver sufficient innovation, quality of service at marketing leading prices, the lack of portability and open source code won’t be much of an issue for those who don’t have a purist view.
As part of its community development, Salesforce is launching IdeaExchange, which Collins said would provide a transparent roadmap of the company’s development pipeline as well as customer demand for new applications and components. In addition, the company is funding an AppExchange Central incubator to accelerate demand for Apex code. Developers will be able to lease a cube, ironically starting at the old Siebel headquarters in San Mateo, CA, for $20,000 per year, including access to Salesforce technical and business resources to help bring products to market. Incubators are also planned for Tokyo, London and Bangalore. The evangelism and incubation centers will also provide a funnel of applications that Salesforce can cherry pick solutions for acquisition. According to Collins, salesforce.com's developer community numbers 20,000.
Salesforce.com is also banking that its Apex programming language, which it uses to build its own software, will not be a hurdle to developers. According to Collins, Apex code syntax is Java-like and also incorporates SQL (Salesforce runs on Oracle’s database) elements. “Every Java developer can easily program for Apex,” Collins said. “This is not [Microsoft] SQL Server or [Oracle] PLSQL. It is SQL as a application service, an on-demand operating system. It is a transformation in developing, administrating, running and using applications as a service.”
As I wrote about last week, Salesforce.com has added significant new capabilities to its APIs with version 8.0 and the programming language. Developers will be able to create stored procedures, with up to five-level database joins in a statement, across entities hosted in the salesforce.com environment without the need to call external Web services. For example, clicking on button or link could execute logic that checks sales opportunities, looking for the biggest potential deals and those that haven't been addressed for a specific period, and then schedule appointments and send out the appropriate emails. In addition, workflow, real-time messaging, improved integration hooks, an AJAX Toolkit are part of the new development platform.
The Apex platform is slated for availability with Salesforce Winter ’07 release, due before the end of this year, but the Apex language won't be ready until the first half of next year. The developer edition of the platform will be free, and making Apex applications accessible to users will require a Salesforce subscription. Pricing has not been set, Collins said.
Betting that on demand will vanquish the old guard, Salesforce is employing a well funded guerilla divide and conquer strategy against the gorillas who have dominated the enterprise applications. On the divide side, an education campaign to convince enterprises who persist in the client/server world that they will be at a competitive disadvantage within the next decade if they don't move to a multi-tenant on demand platform. On the conquer side, relentlessly going after market share and market expansion.
So far, salesforce.com can tout its 500,000 subscribers and 400 applications. It's certainly ahead of others trying to crack the on demand egg, but it is early in the game. Apex signals the much grander ambitions for Benioff and team. “Now that anything can be built on demand, no corner of enterprise software is safe,” Benioff proclaimed in the press release.
Getting to a million subscribers and $1 billion in revenue is reasonable within the next few years, even without Apex. Becoming an application service provider for enterprises is a much more Sisyphean task, with issues such as infrastructure scaling to meet demand and keeping the wheels on the tracks as the software platform is stressed by tens of thousands of developers creating custom code. And, it's such a good idea, Apex will have many well endowed competitors, such as Microsoft, IBM, Oracle, and SAP if they can get their acts together. It's just the kind of challenge that Benioff seems to thrive on.