IDC Whitepaper
"The Salesforce AppExchange, launched in 2006, continues to be, in IDC's opinion, one of the leading marketplaces for enterprise applications in the software industry. Other marketplaces — both vendor/platform specific and independent — exist, but AppExchange, like Apple's App Store, remains the industry standard against which they are measured."
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The Enterprise App Economy: How App Marketplaces are Changing the Way Vendors Market and Customers Shop by IDC
1. WHITE PAPER
The Enterprise App Economy: How App Marketplaces are
Changing the Way Vendors Market and Customers Shop
Sponsored by: salesforce.com
Christine Dover
November 2013
IDC OPINION
The consumerization of IT is dramatically changing the way software vendors market and business
users buy applications. Just as consumers have become accustomed to using Web sites, ratings,
reviews, and social networks to research what they are thinking about purchasing and then buying that
product or service through an app store, business users are going through a similar transition when
looking for enterprise applications. Independent software vendors (ISVs) that are not listing their
products or engaging in the customer activity that is occurring on application marketplaces are missing
out on sales opportunities. Prospective customers, who are familiar with salesforce.com and generally
prefer cloud-based applications, are starting their search for new applications on enterprise application
marketplaces such as the Salesforce AppExchange.
Key findings of this research include:
C-level and IT executives are demanding cloud applications as they look long term to source
their IT needs.
More than 50% of business application purchases now start with online research and perusal
of ratings and reviews from other users.
The AppExchange economy is booming. It took about five years, from the launch in 2006 to
September 2011, for AppExchange to reach the 1 million installs milestone and only another
two years to more than double that number. Potential customers are installing, on average,
over 2,000 apps per day; 46,250 apps per month; and 520,000 apps per year.
Many ISVs on AppExchange report conversion rates for installs to qualified opportunities in the
double digits, ranging from 17% to 71%. The conversion rates for qualified opportunities to
closed deals are also in the double digits, ranging from 10% to 25%.
AppExchange partners have generated over $1 billion in revenue for their own businesses to date.
METHODOLOGY
This white paper was developed through a series of telephone interviews conducted with more than 10
salesforce.com partners. The partners develop both horizontal applications (e.g., financials, human
resources, calendaring, and data integration) and vertical applications (e.g., professional services, high
technology). The partners range in size from small companies (e.g., fewer than 10 employees) to
November 2013, IDC #244254
8. About IDC
International Data Corporation (IDC) is the premier global provider of market intelligence, advisory
services, and events for the information technology, telecommunications and consumer technology
markets. IDC helps IT professionals, business executives, and the investment community make factbased decisions on technology purchases and business strategy. More than 1000 IDC analysts
provide global, regional, and local expertise on technology and industry opportunities and trends in
over 110 countries worldwide. For more than 48 years, IDC has provided strategic insights to help our
clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading
technology media, research, and events company.
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