“The new AppExchange Partner Program empowers the next generation of Salesforce ISVs with a single destination for everything they need to succeed—the training to create solutions on cutting-edge Salesforce technology and the programs to turn them into businesses with global reach.”
– Leyla Seka, EVP AppExchange, Salesforce.
There was a big buzz this week as Salesforce announced their new partnership program. The new partner program will be focused on the AppExchange (AppEx), and will replace the current ISV* model that has served the ecosystem well for many years. A fresh scoring model, onboarding process and developer tools hope to boost the quantity and quality of applications, as well as a new capital fund set aside for the most cutting-edge of those.
(*Independent Software Vendor)
How will the new framework shape the AppEx marketplace? And what are Salesforce’s motivations for introducing a new partner program?
The AppExchange is the largest enterprise application ‘store’ and has been running successfully for 12 years. Since being the first of its kind on the B2B scene, it has racked up an impressive set of accolades and numbers, currently sitting at 4 mil+ installs of the 3000+ solutions available, plus an install base that includes 88% of the Fortune 500!
It’s conception back all those years ago has meant Salesforce customers can easily jump onto the AppExchange and autonomously shop around for a solution that fits their need and budget. As many of the applications are ‘plug-in’ by nature, customers can pretty much get their desired solution on demand – a key reason for AppEx’s long-standing popularity.
The Important Changes
Now that the reasons are out of the way, here are the 4 main changes that will transform the partner ecosystem..
1. New Partner Scoring
Your position as a partner previously revolved around the ‘Partner Value Score’, colloquially known as PVS. Now we welcome the ‘AppExchange Trailblazer Score’.
In the same way PVS did, the Trailblazer score will make comparable the multitude of partners in the ecosystem in a clear and fair way.
But, what components will make up the Trailblazer Score? Raising the score will require attention to a combination of these 4 elements:
– Customer Success: otherwise known as CSAT, this is calculated based on AppEx ratings (5 stars) and the number of reviews too.
– Product Success: innovation and security. Innovation will be credited here, encouraging developers to work with Salesforce’s newest pieces of development kit. Security assessment results will impact score additionally.
– Team Readiness: certifications have long been the secret to racking up credibility as a partner, but now Trailhead modules will count towards the score too! Trailhead is going to prove itself as a seriously effective and engaging way to disperse Partner Enablement.
– Giving back: NEW! With Salesforce’s philanthropic efforts at its founding core (and recently smashing their own sustainability targets), many partners have been encouraged to adopt the Pledge 1% model, but never incentivised to do so….until now. Now charitable donation of 1% of technology, profit and employee time will be looked at seriously as part of the partner status.
Percentage net revenue (PNR) is the amount that the partner has to pay to Salesforce whenever their solution is sold via AppEx. You could compare it to renting advertising space. The PNR is reducing from 25% to 15%, opening up the platform to more embryonic businesses that get dizzy at the thought of 25% PNR. With higher profits on offer, this will pique the interest of one-man-bands and large corporations alike. New joiners will have the new baseline PNR applied, and existing partners will take advantage of the reduction upon contract renewal.
2. Removing Onboarding Obstacles
As Salesforce continues to scale exponentially, the AppEx team identified with the need for a streamlined onboarding process and engaging, ongoing communication. There are 3 main areas they have targeted to remove all possible bottlenecks for win-win.
– Onboarding wizard: reducing time-to-market with a guided setup to ensure everyone has everything successfully in place pre-launch.
– Payment tools: API access to Salesforce’s own ‘Channel Order App’ to automate and connect the order submission process.
– Dashboard: delivers the key business related stats to partners, allowing for ongoing communication on their progress, in real-time.
3. Developer Enablement
Unfortunately, the Salesforce platform hasn’t exactly won over the hearts of developers in the past few years, with one survey reporting 70% slated Salesforce, crowning it the ‘most dreaded’ development platform. Regardless of these results being based on opinion, Salesforce have endeavoured to make the platform more desirable – and here are two ways they are giving the developer community some love:
– Salesforce DX (tagline: ‘App Cloud for Developers’): enabling source-driven development, including the ‘scratch org’, a new type of environment. (more)
– Heruko Access: free access to this PaaS means developers will be able to build Salesforce applications in their preferred language.
4. The Salesforce Platform Fund: Capital up for grabs!
Perhaps the most exciting impact of all: the Salesforce Platform Fund. The fund, a branch of the hyperactive Salesforce Ventures, will be allocating $100million to AppEx vendors. The investors are intending to target the most forward-thinking developers, those with the cutting-edge applications and components that showcase the best of Salesforce’s innovation.
Speculating on the ‘Why’
There are motivations behind the change, some obvious and others more speculative – I’ll aim to give a flavour of both. Firstly, it is a widely accepted concept that if you cast the net wider (open up your 3rd-party network) to more innovators, you are more likely to gain a greater rate of innovation in return. By tearing down barriers to entry, Salesforce hopes will accelerate innovation, providing an arena for a greater quantity and quality of solutions. Secondly, it coincides nicely to encourage the cream of the AI-development crop to come and build solutions “beyond the app” that leverage the technology and datasets that Salesforce Einstein and Thunder have opened up. Thirdly, simply the more applications, the more installs, the more revenue for Salesforce. As mentioned previously, a fourth reason could stem from Salesforce trying to defend their platform from the negative patter it had been receiving for not being developer-friendly. Finally, I think this is next focal point for Salesforce’s growth in order to continue catapulting forward as leaders in the CRM space – if 2016 was the year of growth via acquisitions, then now could be growth via the AppEx Ecosystem.
Eyes are on Salesforce to continue their relentless expansion, particularly following the IDC’s projected growth figures of the ‘Salesforce Economy’. IDC stirred a storm last year because they were sneak peek at the phenomenal potential – and it’s clear the partner ecosystem will be imperative to making these projections reality. Will AppEx continue to rake in the money? Certainly, Salesforce have recognised a solid development platform in combination with streamlining the business management side is the secret sauce for continued growth. By taking these steps to empower their partners, Salesforce are making an investment in their continued CRM domination.