Seeking to expand its partner base and bring more applications to its on-demand marketplace, Salesforce.com today outlined plans for a new online marketing and billing service.
The San Francisco-based Software as a Service (SaaS) company will offer marketing, distribution and access to its customer base of more than 27,000 to companies that develop on-demand applications that complement its core CRM product. Salesforce.com currently offers roughly 430 applications from 230 partners on the AppExchange, its online directory of applications. All of the applications are based on Salesforce.com's
It won't come cheap, however.
Dubbed AppStore, Salesforce.com will offer a referral program at two levels. The standard referral includes placement on searches and in AppExchange categories, marketing programs and inclusion in Salesforce.com events. That will begin in February, and companies will be charged a 10% referral fee on all closed transactions in the first year. The premium referral package also includes demand generation, seminars to educate Salesforce.com's customer facing employees, and premium listings. That will be available next August and requires a 25% referral fee.
Currently, partners pay a fee to be listed on the AppExchange and handle all billing and marketing on their own. Salesforce.com also plans to release AppStore Checkout, which will handle online billing, invoicing and collection services and will provide online self-service for customers making AppExchange applications purchases. That requires a 20% commission on all invoices on an ongoing basis. It is scheduled for release in December of 2007.
Part of the intention of today's announcement, according to Kelman, was to prove that the company is committed to the AppExchange.
"Obviously, there is a lot of development and a community that's grown very quickly," said Rebecca Wetteman, analyst with Wellesley, Mass.-based Nucleus Research. "Particularly, given as quickly as AppExchange developed, you've got a lot of great products there that haven't developed marketing, sales and billing to go with it. This gives smaller parties a turnkey infrastructure to do that and make it easier for first-time customers."
The move also creates a tiered partner structure that businesses have come to expect with larger on-premise software makers. Small, start-up companies that need Salesforce.com's marketing and billing support will likely make use of the new services while others, which can provide that on their own without the commission, may elect to maintain the status quo.
"This is a natural evolution of what they needed to do," Wetteman said. "It does give Salesforce a very clear understanding of partners' knowing the rules of engagement. This is the standard tiered partners we see in the software industry. It makes it clear if they're three men and a dog or large partners in the way they interact with customers and with Salesforce.com."