Salesforce.com makes platform move with AppExchange

Salesforce.com plans to accelerate its push to become a hosted applications platform by launching AppExchange, a Web site intended as a bazaar of on-demand software. The unveiling is expected on Monday at Salesforce.com's Dreamforce user conference in San Francisco.

AppExchange is essentially a rebranding of Multiforce, the hosted applications environment Salesforce.com launched in June to encourage third-party development around its software platform.

The name change was so sudden that several partners participating in the launch were caught unaware, according to a spokesman for a Salesforce.com partner, who asked not to be identified for fear of reprisals from Salesforce.com. He learned of AppExchange when Salesforce.com sent back his client's draft press releases this week with all references to Multiforce replaced with the name AppExchange.

Six-year-old Salesforce.com has become a dominant player in the hosted or "on demand" applications market, with more than 300,000 subscribers now using its CRM (customer relationship management) system. Sales software is Salesforce.com's focus; to extend its functionality, the company has an extensive partner network of ISVs (independent software vendors) offering add-ons and complementary applications.

Salesforce.com entered the platform market two years ago with Sforce, which it touted as a platform that outside developers could use to build any kind of hosted application. In reality, it's being used by partners to tailor their applications to Salesforce.com and to attract Salesforce.com customers looking for extended functionality.

One long-time Salesforce.com partner participating in Monday's AppExchange launch, Got Chief Executive Officer Eric Melka, said AppExchange will offer partners a new level of integration. Previously, Got's marketing management software was a separate module that could integrate with Salesforce.com; now, it will appear to users as seamless extension of Salesforce.com's software. Customers can essentially "activate" the software and treat it as they would any other built-in functionality.

"Something that's part of the software is always better," Melka said. "Would you use additional fonts that came with [Microsoft] Word, or would you use fonts you have to buy and load?"

Salesforce.com isn't the only company that sees opportunity in becoming the backbone for "software as a service" deployments. IBM announced plans three years ago to develop a network of ISVs offering hosted applications through IBM's infrastructure. It has since amassed more than 40 partners, whose wares it advertises in a "Software as Services Showcase" on its Web site.

Actually pulling together those components together into a unified offering has proved tricky. "IBM has yet to deliver a replicable platform or tools for SaaS [software as a service] developers to leverage," Summit Strategies analyst Tom Kucharvy wrote in a July research report. "Nor has it yet launched an integrated SaaS solutions marketing program needed to create customer proof points, market awareness or a proven, leveragable 'hook' around which third-party applications and add-on vendors can position their own offerings."