The license covers the complete AppExchange on-demand platform comprising: the user interface, and a single security and data-sharing model; the AppExchange API, AppExchange Database and AppExchange Builder for customization and integration; five custom tabs; 50 custom objects; and the Salesforce.com service delivery platform.
End users, the partners’ customers, are charged $25 per user, per month, which goes to Salesforce.com in the form of subscription fees. Partners set their own pricing levels and everything over $25 represents revenue for them.
The OEM edition is a blank canvas and does not include Salesforce.com’s own CRM applications, which means partners are free to build and offer any type of application, enabling them to take on-demand into new non-CRM directions. There are no restrictions regarding the data model, a freedom enabled by the development of the original AppExchange technology.
Now, applications built on the AppExchange platform can exist completely separate from CRM and can be distributed directly by Salesforce.com partners, further extending the reach, benefits and success of on-demand computing to new customers and new markets worldwide, said Salesforce.com CEO Marc Benioff.
By providing the hosting infrastructure, Salesforce.com is also addressing a little-addressed but critical on-demand issue, which is the quality and capacity of the back-end data center. With on-demand start-ups continually cropping up, prospective customers need to assess whether the vendor or its chosen hosting infrastructure provider has the resources and skills needed to provide the levels of availability, performance, and security an on-demand application requires.
Partners benefit from a proven, secure platform that is highly available, secure, and reliable. Furthermore, partners can focus on building robust and cutting-edge features tailored to their specific markets, rather than worrying about fundamental platform development issues, said Benioff.
Four partners, which also offer applications for the original Salesforce.com AppExchange, have signed up for AppExchange OEM: DreamFactory Software, newly launched MyLoanBiz, Rally Software Development, and Remend.
AppExchange OEM will provide a massive expansion of Salesforce.com’s addressable customer base, taking it beyond the CRM end user space to embrace potentially every software developer and consultant. It could also provide an entry point for start-ups with an application idea but no resources to deploy it, because it lowers the cost of entry to on-demand. Additionally, it will allow partners to build complete portfolios for micro-verticals that would not be catered for otherwise because it would be uneconomic.
Until today, ISVs could build applications on the AppExchange, but when they sold them they sold them to existing Salesforce.com accounts, or sold Salesforce.com licenses alongside their own licenses, because users of AppExchange had to be users of Salesforce.com, said Chris Boorman, VP of marketing for EMEA. Now they can sell solutions to any customer whether they are a Salesforce.com customer or not. It frees them [ISVs] from the customer/Salesforce.com relationship and gives them the opportunity to sell anywhere.
While the new revenue opportunities are good news for Salesforce.com because of its need for a constant stream of innovative ideas and customer hooks to drive new subscriptions, there are risks for customers.
Partners are responsible for the availability of their applications which means Salesforce.com takes no responsibility for the disruption of service if it is not infrastructure-related, such as if the OEM licensee goes out of business. We do as much due-diligence as we can but we cannot guarantee a company will be in business in six months or a year, said Boorman.
The risk is from companies that see a way to make a fast buck, but Boorman said the company does control AppExchange applications and rejects proposals. For example, he said some players have put forward applications that are no more than a front end to their web sites, which have been rejected.
