Third-Party Power: The Rise of the B2B App Store

With cloud and mobile adoption growing by the day, users are accustomed to having the ability to adjust technology to their liking. Not surprisingly, those expectations have begun to carry over from people's personal lives and into their working lives.

Users have come to expect a certain amount of flexibility from their devices and applications, and CRM systems are no exception. Increasingly, people want the systems they log in to and live in for eight hours a day to fulfill their needs just as their consumer products do. This means that they'd like to get the tools they need at a moment's notice, without having to jump through too many hoops in the process. And if they can't get such tools straight out of the box, at the very least they expect to be able to easily readjust their core systems with the right functionality.

It's not just functionality that is in high demand. Having a broad selection is vital as well.

As more employees use their own portable devices for work, mobile apps are becoming an essential component. It's no secret by now that professionals often wish to work directly from their smartphones. Field sales reps, for example, are frequently miles away from their computers, closing deals in person, and marketers can't always anticipate when inspiration will hit regarding their latest creative campaign. These professionals need malleable tools at their disposal to aid these efforts—tools that they're comfortable using.

But it's almost impossible for a CRM vendor to provide every client with exactly what it's looking for. Many companies encounter problems getting a solution that addresses the particulars of their circumstances. A company's industry, size, and location are all factors that can determine its specific CRM needs, says Ray Wang, founder of Constellation Research.

"CRM itself is a transactional app," Wang says. "It allows companies to look at an opportunity, run a marketing campaign, or handle a customer service request." The tricky part, however, is doing more with those transactions. "A lot of vendors don't have the bandwidth, nor do they have the expertise to take that and expand upon it, or apply it to different verticals," Wang says.

That's where third-party apps come in.

Roughly 10 years ago, Salesforce.com introduced its AppExchange, a network of partners that design their applications specifically for Salesforce.com's platform. This model took the company’s traditional CRM platform, for which many independent software vendors (ISVs) were already making add-ons, and made it more accessible to developers and more convenient for ISVs to work with. These integrated third-party apps enabled users to supplement core CRM functionality with extra components that went beyond the out-of-package offerings.

The idea of building a third-party ecosystem has caught on, and many companies have followed suit with similar models. Now, many core vendors that cater to companies of all sizes have created their own partner networks for add-on applications. Infusionsoft, a CRM vendor that typically caters to smaller businesses with 100 or fewer employees, offers its own version of an app store. Netsuite, whose solutions are best suited for medium-size companies, calls its marketplace SuiteApp; it is equipped with a directory that gives customers the opportunity to browse reviews, test various solutions, and purchase apps that integrate with and bolster their configurations. And key players such as Salesforce.com, Oracle, SAP, SugarCRM, and Microsoft Dynamics CRM all feature add-on apps from partners as part of their standard offerings.

This is to say that many major CRM vendors have begun to incorporate third-party apps into their plans, and "those that haven't are going to have to in order to stay competitive," says Michael Fauscette, group vice president of software business solutions at IDC.

CLIENT BENEFITS

In the absence of a third-party ecosystem, it can be hard for ISVs to find an audience. An ISV could create the perfect app, but organizations might be reluctant to purchase it anyway, especially one built by a small, unknown software company. However, participating in a trusted vendor's partner network serves to legitimize these ISVs. According to Neeracha Taychakhoonavudh, senior vice president of partner programs at Salesforce.com, every app that makes it onto the AppExchange is vetted by Salesforce.com's trust organization. This is significant because it reassures client organizations that they are investing in products that are safe, reliable, and have been approved by experts who deemed them worthy of showcasing in an esteemed ecosystem.

The partnerships also help to ensure that third-party applications remain relevant to platform customers. Taychakhoonavudh says that Salesforce.com is vigilant about checking up on customer requests for upgrades. It seeks feedback from customers regularly and distribute the results to partner companies in the ecosystem. "We run a biannual customer survey and ask customers what kinds of tools they are looking for," Taychakhoonavudh says. "We share it with our partner base; it's an ongoing process."

Additionally, clients can be assured that a company that develops primarily on one platform is in a position to always stay up to date on that platform, and remain compatible with it. This way, the company knows how to design its product so that it integrates with the central technology most of its customers are using.

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