Enterprise App Store – the new ISV strategy

The old model of building and selling software has ruled far too long in the Enterprise Software industry. Let us instead look at the enterprise App Store. The new way to build, sell and buy enterprise software.
Customers expect their enterprise software to be delivered in a way that is agile, fast and flexible. They want to be able to find all of the features they need in one place, and be able to add, buy and deploy them without any complicated and costly integrations. Just like they do as consumers. Today, the software vendor (ISV) with the best App Store can become that “go-to-place”.

How it works

The Enterprise App Store is a marketplace where customers can “pick-and-choose” best–of-breed applications. Applications that are domain focused, serve different needs, and allow customers to compose flexible and cost-effective solutions. It is very similar to both Google Play and Apple App Store, but for enterprises. Three important reasons to have an Enterprise App Store:
  1. As an entrepreneur and owner, you want to be in control. It is of strategic importance to own the relationship with your customers.
  2. Applications and App Stores is an efficient way to deliver value to your customer. Your customer can buy and deploy customized enterprise solutions with high resemblance of how they buy software as consumers.
  3. You, as the App Store owner, can broaden your offer to your customers, by offering fitting third party products in the App Store.
To achieve the above, an ISV needs to own the platform. If you own your platform and the platform is open, you can easily add third party products from an ecosystem to your own platform. Without risking ownership of data, your competitive advantage and your clients.

Almost every company will benefit

All vendors with enterprise software in a specific domain will benefit from an App Store strategy. If you only produce a very nished middleware with already established channels, there are probably less benefits to deliver your software through an App Store.

If you have your business in the defense industry, or another very secret business, you will probably go for an App Store approach, but a closed one with only your own software. Thus not being able to benefit from the ecosystem that normally comes with the open App Store strategy.

Apple managed to change the mobile phone market by launching a technically inferior product, with a better user experience and an App Store where the choice of hundreds of apps where perceived, by the users, as much better than Nokias pre-loaded carefully selected apps. Salesforce set the market standard on how to deliver business software from an ecosystem almost two decades ago. Anaplan is a newer and a more modern alternative than Salesforce. By using a modern, flexible and fast business model based on an ecosystem, they are taking market shares within financial apps, from big companies such as Oracle and SAP. Odoo created an App Store successfully in the ERP software industry, where their marketplace is fed with both in-house made and 3rd party apps and modules.

Be your own master

Joining an already successful App Store, will by definition mean that you are stuck as a lower level contributor in an ecosystem that someone else control. Owning your own App Store is a completely different thing.

You as the ISV, own and control the relationship with your customers. As an example, this is not how it works with Salesforce. If you become really successful in a Salesforce model, you can rest assured that someone else will try to launch their own product trying to take over.

The greatest challenge

The greatest challenge in building an App Store is the “Empty App Store Syndrome”. If you have no customers in your store, why should anyone invest in developing software there? And vice versa, why should any customer go to your store if there are no solutions there?

The challenge of attracting developers to build applications in your App Store is directly correlated to the cost of porting applications or integrating applications with a new platform. In the enterprise App Store, all applications need to work together. The applications need to seamlessly share data and screen to create the right user experience and sophisticated enterprise solution.

The solution: high incentive and no barriers

The higher the cost for adding applications, the higher the incentive needs to be. The incentive is always based on how much profit it will generate for the company developing on your App Store. An example, if you have many customers on your platform, then that alone is a great incentive when considering your App Store. If you don’t have many customers, it can still be attractive to develop applications in your store if the cost for doing so is close to zero.

Integration is the key in the Enterprise App Store

In a consumer App Store, all applications are isolated with no or very limited integration. With Enterprise Software, it is another story. Applications need to support complex business processes and be able to share data and screen – in real time. Applications need to be highly integrated and at the same time, easy to compose.

Until recently, the need for tight integration and a “easy-to-compose” ability has proven to be an impossible combination. Which is the explanation to why the old generation of enterprise App Stores need to have a master (platform owner) and slave (module/application developer) relationship between the parties.

A new generation of technology is now supporting integration, enabling a new generation of platforms and App Store. Taking the consumer-like experience to the complex world of enterprise software.

Time to market and more customers

By using software applications from other vendors and third party software complimentary to your core product, you deliver more benefits faster to your customers and increasing your revenue streams.

By making your software components and applications available for other ISVs in the ecosystem, you can reach new markets and geographies, creating new revenue streams.

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