Salesforce Alters Financial Equation for App Partners
Salesforce is shifting the terms and conditions under which it shares revenue with third-party developers of applications, while at the same time raising the bar in terms of what's required to participate in its programs.
A revamp of the Salesforce AppExchange Partner Program reduces the percentage of revenue that Salesforce receives from third-party applications hosted on its platforms from 25 to 15 percent. At the same time, Salesforce is implementing new policies and procedures that reward partners based on customer reviews, security reviews, certifications, participation in charitable programs and the number of cloud services, as well as the total amount of revenue generated.
The goal is to increase the quality of the overall customer experience, while also making Force.com and the Heroku platform-as-a-service (PaaS) environments, which Salesforce makes available as cloud services, more appealing to third-party application developers from an overall profitability perspective, said Leslie Tom, vice president of AppExchange marketing and programs at Salesforce.
In addition, Tom said Salesforce has simplified the AppExchange onboarding process to make it easier for third-party developers to get their applications listed on the Salesforce application marketplace. He added that new applications are being added to the Salesforce marketplace at the rate of two a day. More importantly from a developer perspective, customer activity on the marketplace is a lot more robust than most other online marketplaces.
"We're seeing application downloads at a rate of one per minute," Tom said.
While the revamp of the Salesforce AppExchange platform offers some financial benefits to partners, Jeff Kaplan, managing director of consulting firm THINKstrategies, said partners need to weigh those benefits against the higher costs attached to, for example, achieving certifications and passing reviews. "It changes the formula for partnering with Salesforce," he said.
Of course, there's no shortage of online marketplaces that developers can use to bring their applications to market. The issue facing application developers is determining which of those marketplaces—including ones developers build on their own—winds up being the most cost-effective route to market.