When Salesforce launched the AppExchange in 2006, it quickly became a game-changer in so many ways – the first cloud platform, the introduction of platform as a service, the beginning of APIs – but what might be most impressive is that the AppExchange ushered in an entirely new model for partnerships.
Until then, no one in the tech industry had partnerships like we do now – they just didn’t make sense. But all of a sudden with the rise of the cloud, everything became interconnected. We discovered that working together made technology products much, much stronger and that symbiotic relationships could pave the way to new levels of success.
How tech’s first ecosystem came to be
It all started with forecasting. Back then, Salesforce offered basic forecasting tools, but companies also began to realize they could build their own forecasting apps and make them work with Salesforce. The resulting apps offered different functionality, integrated well, and made the product stronger. This was the aha that led to what’s now the AppExchange. CEO Marc Benioff had the brilliant idea to build a marketplace (originally called the AppStore!) and offer these products as add-ons so other companies could capitalize on them too.
Once launched, the AppExchange became the start of a new partnership model, an exciting and innovative way for companies to build powerful, lasting relationships. It also led to plenty of other benefits for Salesforce, like:
- Increased Product Value
A marketplace of partner apps would enhance the value of Salesforce and create multiple new revenue streams. Soon Salesforce customers had dozens of apps in every category to choose from, giving them a tremendous amount of value, not to mention a higher ROI on their purchase of CRM. Why would a customer buy another CRM when they could buy Salesforce and have all these other add-ons to choose from?
- Lower Attrition
Once the AppExchange marketplace was built and fortified, another advantage soon became clear: attrition numbers fell drastically (in our favor). With these powerful new options to enhance the product, the likelihood of customers attriting went down significantly with each successful install.
- Built-In Community
The AppExchange also gave Salesforce a huge new community of customers that came from our partners. The amazing thing was that they all wanted to share advice and best practices – with each other AND with Salesforce. Constructive ideas and feedback from the community really helped us refine and improve the both the AppExchange and the actual ecosystem.
Building a democracy inside a kingdom
I worked on the AppExchange for almost 10 years, overseeing its growth into the powerhouse it is today. The job was an education in itself and I’m grateful every single day for the experience. Looking back, I often think of what we did as building a democracy in the middle of a kingdom – We built an open marketplace that ran inside a company. This was unheard of at the time. The logistics of that were intense and overwhelming; this had never been done before, so we had no examples to follow and no one to turn to for help.
Now, years later, I’m immensely proud of what we accomplished and what the AppExchange has become. Our team relied on innovation, strategic thinking, and an amazing crew of technical gurus to take this idea from concept to creation to sustained success.
As a result, I’m constantly peppered with questions on how we did it, what made it successful, and what challenges we faced. So stay tuned as I lay out the most common questions I get about how to build a thriving ecosystem.