Let’s take the License Management as example: today the most common business model for Partners in the Appexchange is charging a fee, per user, per month (something like charging 8$/user/month to every Organization who downloads your app). This is a great, flexible and scalable model that has been sponsored by Salesforce.com. I mean, if you’re a NTGO with just a couple of SFDC users in your Organization and you only need one of them to be using the application, you pay 8 bucks a month, great. In the other hand, let’s say you’re a 2000 agents’ call center in India, so you test the application and it indeed improves the way your 2000 agents use their time. Then you do your math, calculate your ROI and bang… you go for it, you contract 2000 users/month to this now happy Partner. Actually, everybody is happy because you are improving the time of 2000 agents and the ROI of the application is fabulous. Well, it should be that way, I mean we have a great model, right ? Unfortunately a great business model should rely in a properly implementation and into the tools that will support it, and this is precisely where Salesforce has fallen short so far.

Back to the License Management, so what is the License Management anyways? Salesforce.com provides a tool to manage the way their customers access the applications provided by their Partners, called “LMA” (License Management Application). This application is installed in both ends of the party, the Partner and the Customer and what it does is to help (just help, not resolve) dealing with the problem of restricting the access to the application to a certain number of users for a period of time. But the LMA just partially resolves the problem or, what is the same, just resolves the problem to a partial number of Partner’s applications, because it only works at the UI level. Therefore, only the applications that are entirely UI-based are actually able to restrict the access to their functionalities to the number of users contracted by an Organization. The remaining applications (and I must say the remaining are more than first ones) felt in the group of applications that extends the CRM functionalities and have backend functionality, that also needs to be restricted to a certain number of users, but they can’t do it using the standard tools provided by Salesforce.

In order to reach the reasonable goal of being able to charge the fair amount of money for their Products, the vendors for this latter group of applications needs to rely in one of the two following processes:

1. Implementing a custom access control application, within their applications and/or on an external system, that communicates with the original application: This could be a long and painful road. Implementing your own “LMA” could require an amount of additional effort that you didn’t have planned in the first place and which might put you to think how profitable the application will be, after adding such an overhead to the development time.

2. Using a manual-trust-based system: I think the title says it all. Needless to say that how bad it sounds, how bad it is… So, you invest some thousands of dollars in the development of a cutting edge application, hosted by a rock solid-state of the art platform (Salesforce is really that) and you are supposed to be happy with a manual process, which is based in the good faith of the Companies who buy your Product?

Then, the process of recollecting the payment deserves another article by itself … just a hitch: there is no such a process within SFDC, Salesforce just gives your clients your email and phone number, in order to you process the payment. Come on guys, really? Why don’t having a payment platform within Salesforce to process these payments instead?

I think Salesforce.com has proved to be the best CRM hosted solution out there and their investment in the Force.com platform has had amazing results up to this date, however they’ll need to support their vision about the Appexchange and the community around it, with some serious and well-thought tools.

Héctor Pappe
Teravision Technologies
Please send comments to hpappe@teravisiontech.com