AppExchange is so 1998

Salesforce.com's AppExchange is neither new nor revolutionary, while the debut of AppForce is no more than a rebranding exercise.
Written by Phil Wainewright, Contributor

Now that the dust has settled and I've had a chance to take a closer look, it's evident that Marc Benioff's claims to have launched "the eBay of enterprise applications" this week fall far short of the mark.

Salesforce.com's AppExchange is neither new nor revolutionary, while the debut of AppForce is no more than a rebranding exercise. I take my hat off to the showmanship, but I'm disappointed by the substance.

The biggest disappointment is the AppExchange. To even liken this to eBay is a joke. It has no transaction capability whatever. I'll get excited when someone comes along with a platform that not only acts as a shop window but actually takes care of metering and billing on-demand application usage from a variety of vendors. AppExchange does none of that. AMR Research accurately categorizes it, but with more enthusiasm than it merits: "AppExchange looks like the blueprint for a large virtual software mall." Puh-lease. We all know what happened to online shopping malls. Why on earth would online application malls be any more successful? The idea is so 1998. Meanwhile, look out for eBay or Amazon to steal Salesforce.com's thunder with a much more convincing execution of a proper on-demand marketplace, coming soon to a web browser near you.

At least Salesforce has taken my advice of a few weeks ago and tidied up its earlier hodgepodge of brands. This has been a great marketing success, with the company able to relaunch as new something that in reality is just a warmed-up rehash of existing offerings. AppForce is nothing other than the new name for sForce and MultiForce, while the AppExchange is the new name for what used to be known as the sForce Partner Portal. Every partner that was previously "sForce Certified" yesterday got the opportunity to relaunch their application as a new AppExchange offering, while Salesforce itself relaunched a whole load of free sForce and MultiForce offerings, yielding a superficially impressive total of 70 "new" applications—most of which in fact have already seen the light of day in earlier guises.

Once you know that AppExchange isn't some new innovation but instead merely a rehash of something that was already announced at last year's Dreamforce conference, a lot of the gloss rapidly tarnishes. You might wonder, for example, how the 60 sForce-based solutions announced at last year's Dreamforce has grown to just 70 AppExchange offerings a year later, with Salesforce.com itself obliged to contribute fully half of that number.

Part of the explanation comes from the appearance of OpSource as a Salesforce-recommended hosting partner for wannabe AppForce partners. It turns out that most ISVs really haven't got a clue how difficult it is to offer on-demand applications. One of the big stumbling blocks Salesforce encountered with its earlier program was that a majority of would-be partners simply weren't capable of meeting the high standards set by Salesforce itself. Certification, for example, meant answering 400 questions in a security audit. Most partners flunked the test at every attempt.

OpSource offers a service delivery infrastructure that takes care of security, scalability and all the other usual pitfalls of offering software services, and which therefore shortcuts the path to certification for would-be AppForce partners. Eight of the 35 announcing today are hosting with OpSource.

Talking today to Nick Blozan, Opsource's VP of sales and marketing, I was reminded of one of the main reasons why the first generation of ASPs failed. It's not any of the commonly accepted reasons. It was simply naivety about the sheer unmanageability of conventional application software. OpSource is very careful in its due diligence before taking on a new ISV client to investigate how the application scales. "Most of these companies have never really had to run their own product in production," he told me. "They don't know what their customers go through in terms of running the product." That, of course, sums up in a nutshell what's wrong with the conventional ISV model, and why on-demand has such a clear advantage.

Although I'm disappointed with the gaps in this week's announcements from Salesforce.com, I still feel positive about the model. My reservations revolve around any implication that Appforce and AppExchange have just opened the floodgates for innovation in on-demand applications. The majority of ISVs still have a lot to learn about architecting for on-demand delivery. It's not as easy as they think, and it'll take a while for them to get up to speed.

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