Salesforce shows money, reveals plans

“Show,” they said, “me the money.”

And Salesforce.com did yesterday, releasing revenue numbers for the third quarter of its fiscal year 2008. The big on-demand kids also talked a lot of AppStore, a story that filled headlines all over industry news outlets with comparisons to iTunes methodology.

Salesforce.com chairman/CEO Marc Benioff held the media event in San Francisco, Calif. yesterday, talking firstly of money. Salesforce announced an increase in its revenue outlook for its full fiscal year 2008. The company now expects revenue to be in the range of $710 million to $720 million for the fiscal year ending January 31, 2008. Salesforce.com had forecasted fiscal year 2008’s revenue to be between $700 million and $710 million.

And on Benioff et al went to the exciting bit about AppStore, revealing the AppStore vision and monetization strategy for the AppExchange marketplace. “From the moment we started talking about our vision of a marketplace of on-demand applications, the market has been asking ‘What is salesforce.com’s strategy to monetize the AppExchange?’ AppStore is the answer.”

AppStore will represent a single source for trying, buying and deploying on-demand applications on the AppExchange. AppStore promises a complete package of commercial services and revenue-sharing programs for developers and partners. Said developers and partners would who use AppStore as a global distribution network to market, sell, invoice and deliver the applications built using the Apex programming language and platform.

Global AppExchange incubators are also in place, which “will assist companies in developing new products on the Apex platform, and will also help accelerate the success of existing AppExchange partners.” Ten companies will act as incubators for the gestating little solutions: Appirio, Avankia, Centive, Convenos, DomoDomain, InsideView, InvisibleCRM, Right90, VerticalResponse and Xactly.

“AppStore will be the catalyst to unlock the value of Apex and the AppExchange,” promises the Salesforce brain trust, “accelerating the vision for the creation, delivery, and success of any application on demand.”

Nor were media comparisons to iTunes accidental: “For customers, AppStore will make purchasing on-demand applications as easy as buying music on iTunes, and for partners, AppStore will remove the burden and expense of building out a sales and distribution channel,” said Benioff in the presentation.

Strategically speaking, AppStore accelerates salesforce.com exploitation of the vlue of AppExchange. Salesforce.com reports the firm has been able to expand its subscriber base through new users and departments across the enterprise via its broad variety of on-demand applications; Salesforce also sees customers upgrading to premium salesforce.com offerings and services with the deployment of more on-demand applications and customizations.

The AppStore Referral Program and AppStore Checkout represent the next two steps in the AppExchange monetization strategy. These are currently scheduled to be offered in quarter one and quarter three of 2007, respectively, as part of a phased approach throughout the year.

Salesforce.com will provide AppStore services to partners for a revenue share percentage of closed deals, and customers will not be charged additional fees for using AppStore services.

Apex (or the platform formerly known as the AppExchange platform) will see its next release currently scheduled to be available in conjunction with the release of Winter 07, and the Apex programming language is currently scheduled to be available during the first half of 2007.