Appstore as an ISV strategy

The old model has ruled far to long in the enterprise software industry. It is time for something new, the appstore.

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 add, buy and implement them without any complicated integrations. Like they do in their consumer life.

The ISV with the best appstore can become the “go-to-place” where all customers go to find solutions to their digitalization needs.

The enterprise appstore is a marketplace that allows businesses to “pick-and-choose” applications. Apps are domain focused, serve different needs, and allow customers to compose flexible and cost-effective solutions. It very similar to Google Play and Apples appstore, but for enterprises.

Why should the ISV have an appstore?

  1. As an entrepreneur and owner, you want to be at the top of your own food chain. It is of strategic importance to own the relationship with your customers.
  2. Apps and appstores is an efficient way to deliver value to your customer. Your customer can, in an easy way, buy customized solutions.
  3. You, as the appstore owner, can broaden your offer to your customers, by offering fitting third party products in the store (sell more, earn more and be more competitive).

To achieve the above, the ISV needs to own their own platform. If you own your platform and the platform is open, you can add third party products from an ecosystem to your own platform, like it was your own ecosystem.

The appstore is not for all ISVs, but most…

All Vendors with business systems in a specific domain will benefit from an appstore strategy and will be able to increase existing revenue streams and create new ones.

If you only produce a very nished middleware with already established channels, there are probably less benefits to deliver your software through an appstore.

If you have your business in the defense industry, or another very secret business, you will probably go for an appstore 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 appstore strategy.

The successful appstores to date

Apple managed to change the mobile phone market by launching a technically inferior product, with a better user experience and an appstore 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 a 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 a ecosystem, they are taking market shares within financing apps, from big companies such as Oracle and SAP.Odoo created an appstore successfully in the ERP software industry, where their marketplace is feed with both in-house made and 3rd party apps and modules.

Be your own master or be a slave to someone else

Joining any of the already successful appstores, will by definition mean that you are stuck as a lower level contributor in their ecosystem. Owning your own appstore is a completely different thing.

You as the ISV, own and control the customer relationship. If you become really successful in a Salesforce model, you can rest assured that the platform owner will, in a more unlikely positive scenario, want to acquire your product or company. Or in a more common negative scenario, launch their own directly competing product and position it better than yours.

The greatest challenge in building an appstore

The greatest challenge in building an appstore is the “Empty appstore syndrome”. If you have no customers in your store,hy should anyone invest in putting an app there? And why should any customer go to your store if there are no apps there?

The challenge of getting apps into your appstore is so great, because of the cost of porting apps or integrating apps with a new infrastructure. In the enterprise appstore, all apps need to work together. The apps need to seamlessly share data and screen to create the right user experience.

So the billion rupee question is; How do you overcome this catch 22?

The solution is two pruned

There needs to be a high incentive and no barriers for others to add apps to your appstore. The higher the cost for adding apps, the higher the incentive needs to be. So the solution is two pronged.

The incentive is always based on how much profit it will generate for the company posting on your appstore. If you have a huge customer base accessing the appstore, then that alone is a great incentive when considering  your appstore.

If you don’t have a customer base, it can still be attractive to put apps in your store if the cost for doing so is close to zero.

As most don’t have a huge customer base, the solution is to bring the barrier down to nothing.

The consumer appstore vs the enterprise software appstore

In a consumer appstore, all apps are isolated with no or very limited integration.

In an enterprise appstore, apps supporting complex business processes apps need to be able to share data in real time and share screen. Apps need to be highly integrated and at the same time, easily composable, like lego bricks.

Until recently, the need for tight integration and a lego-like ability has proven to be an impossible combination and the explanation to why the old generation of enterprise appstores needed to have a master (platform owner)  and slave (module/app builders) relationship between the parties.

A new generation of  technology is now supporting integration and composability, enabling a new generation of platforms and appstores. Taking the consumer-like experience to the complex world of enterprises.

Getting faster to market and win more customers

By using software components 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.

To be able to keep your existing customers and win new ones, you need to deliver fast, agile and highly flexible. By making your software components and apps available for other ISVs in the ecosystem, you can reach new markets and geographies, creating new revenue streams.