Salesforce.com today will take the wraps off plans to significantly extend the capabilities of its AppExchange platform throughout 2007 to more closely resemble the online presence already established by companies such as Apple and eBay.
At an event due to take place Tuesday in San Francisco, the on-demand vendor will lift the curtain on work already underway at the company to turn AppExchange into a fully functioning online marketplace for hosted software.
The idea is to make it as easy for customers to buy on-demand software from AppExchange as it is to purchase songs from Apple's iTunes music store, according to Kendall Collins, senior vice president of product marketing at Salesforce.com.
Ever since Salesforce.com officially launched AppExchange in January, there's been a question mark as to how the company will generate significant revenue from the service, he said. The site showcases both Salesforce.com and third-party hosted applications.
To date, AppExchange has functioned mostly as a central place where users of Salesforce.com's hosted software can go to find and try related applications and tools provided by the company, independent software vendors (ISVs) and developers.
When a customer wants to buy a vendor's application, they have to individually contract with that company, meaning small development shops have had to provide the necessary infrastructure themselves to deal with selling, invoicing and deploying their products. Next year, Salesforce.com will make those capabilities available to any of its partners willing to pay for the services through an initiative the company's dubbed AppStore.
There are several planned AppStore components. The AppStore Standard Referral Program will be available in February 2007, followed in August by AppStore Premium Referral Program and then AppStore Checkout in December next year.
The Referral programs provide partners with access to Salesforce.com's marketing services, while the Checkout service will give them access to online ordering, billing, invoicing and collection services.
Partners using Checkout will pay Salesforce.com 20% of the first and subsequent years’ revenue they obtain from any sale they close through AppExchange. And the Referral services will work out at 10% of the first year's revenue of a sale for the standard version and 25% for the premium version, with nothing to pay in subsequent years.
Checkout is a very significant development project for Salesforce.com, Collins said, essentially committing the company to take all the services and infrastructure it uses to run its own business and making those capabilities available to any of its partners worldwide. The vendor is already testing a prototype of the service able to handle multiple currencies and languages along with local sales tax requirements with some of its partners and developers.
The prototype features single sign-on technology and includes an option for customers to purchase more Salesforce software licences as they're buying AppExchange applications. Customers can also renew and upgrade their AppExchange subscriptions as well as purchase add-on technologies.