The Movement From Products to Platforms
As Software-as-a-Service (SaaS) rapidly gains mainstream interest and adoption, various SaaS providers are repositioning themselves to expand their sphere of influence in the market by morphing their core products into integration and development platforms.
Just as the SaaS movement has been spearheaded by Salesforce.com, the shift toward a platform orientation has been sparked by the broadbased acceptance of the company’s AppExchange within the SaaS industry and among user organizations.
For the unindoctrinated, AppExchange is Salesforce.com’s integration and development platform based on the tremendous success of its CRM and SFA applications. The AppExchange enables third-party software developers and independent software vendors (ISVs) to more easily build SaaS solutions, and integrate their applications and tools to Salesforce.com’s core applications and those of its vast partner network.
The AppExchange includes a set of application protocol interfaces (APIs), design specifications, service provisioning and support requirements, and co-branding and marketing expectations which participants must meet.
AppExchange certification not only permits interoperability with Salesforce.com and over 250 third-party applications, AppExchange participants also gain the validation and marketing muscle of the SaaS industry’s 800 pound guerilla.
By encouraging a wide array of ISVs to link their applications to the AppExchange, Salesforce.com helps itself and its partners overcome user concerns about the ease of integration between the burgeoning SaaS solutions. Salesforce.com also gains a stronger position in the market by positioning its application interface as a pivotal component of the on-demand ‘ecosystem’. The AppExchange also enables Salesforce.com to extend its reach and generate new revenue streams beyond its core application suite by becoming a key channel to market for a rapidly increasing assortment of third-party SaaS solutions.
With all these virtues in mind, a growing number of SaaS players are trying to emulate the AppExchange platform model in their own corners of the SaaS industry. Here are a few examples,
- NetSuite’s NetFlex
- Nsite’s 6.0 Application Center and The Nsite Application Builder
- Employease Extend
- Reardon Commerce
- Informatica
I expect to see more of these platform plays going forward as various SaaS providers attempt to gain a stronger position in the rapidly evolving market. And, beyond the platforms offered by specific SaaS providers will be broader enablement and distribution channel structures provided by the Internet powerhouses Google, Yahoo, and eBay.