Salesforce.com Announces AppStore Vision and Monetization Strategy for the AppExchange Marketplace

AppStore will give customers a single source for trying, buying and deploying AppExchange applications

AppStore will provide a complete package of commercial services for developers and partners to market, sell, invoice and deliver applications to customers directly via the AppExchange

AppStore will be the catalyst to unlock the value of Apex and the AppExchange, accelerating the vision for the creation, delivery, and success of any application on demand

SAN FRANCISCO — December 12, 2006 — Salesforce.com [NYSE: CRM], the technology and market leader in on-demand business services, today announced its AppStore vision and monetization strategy for the AppExchange marketplace. Customers will be able to use AppStore as a single source for trying, buying and deploying on-demand applications on the AppExchange. AppStore will provide a complete package of commercial services and revenue-sharing programs for developers and partners, who will be able to use AppStore as a global distribution network to market, sell, invoice and deliver the applications they have built using the Apex programming language and platform and made available on the AppExchange. AppStore will be the catalyst to unlock the value of Apex and the AppExchange, accelerating the vision for the creation, delivery, and success of any application on demand.

"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 Marc Benioff, chairman and CEO, salesforce.com. "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."

AppExchange, the world's first on-demand application marketplace, has been a resounding success in its first year. More than 20,000 applications installs by over 7,400 salesforce.com customers in 57 countries have taken place, demonstrating a high degree of adoption, momentum and excitement in extending the benefits of on-demand applications beyond CRM to recruiting, IT, human resources, legal and all areas of the enterprise.

More than 430 applications from over 230 partners are available today on the AppExchange. Built using the Apex on-demand platform, these partner applications are integrated by design with salesforce.com's suite of on-demand business applications and can be deployed with a few clicks. AppStore will help partners and customers further accelerate and streamline delivery and adoption of on-demand applications for businesses of any size.

Additionally, the global AppExchange incubators will help companies develop new products on the Apex platform, and will also help accelerate the success of existing AppExchange partners. Ten companies have already signed up for the AppExchange incubator program, including: Appirio, Avankia, Centive, Convenos, DomoDomain, InsideView, InvisibleCRM, Right90, VerticalResponse and Xactly.

Monetizing the AppExchange Marketplace
AppStore will be the catalyst to unlock the value of a virtuous cycle currently at work: a growing community of customers draws more developers and partners into the ecosystem; the development capabilities enabled by the Apex platform and language expand the range of applications available on the AppExchange; the growing diversity of applications inspires existing customers to expand their deployments and helps drive more subscriber growth.

AppStore accelerates salesforce.com's strategy to unlock the value of the AppExchange. First, by offering a broad variety of on-demand applications, salesforce.com has been able to expand its subscriber base through new users and departments across the enterprise. Second, as customers deploy more on-demand applications and customizations, they are upgrading to premium salesforce.com offerings and services such as Unlimited Edition. The AppStore Referral Program and AppStore Checkout represent the next two pieces of the AppExchange monetization strategy.

AppStore — A Complete Range of Programs and Services for Partner Success
AppStore will provide a complete set of commerce, marketing and referral services that enable developers and partners to offer a seamless experience to salesforce.com customers. AppStore will help partners further scale their existing success on the AppExchange by adding a zero-touch, self-service channel model that manages billing, invoicing and renewals across multiple currencies and languages. AppStore will also introduce a complete range of services and programs to drive partner success, including different revenue sharing models aligned with partner business goals.

Salesforce.com will provide AppStore services to partners for a revenue share percentage of closed deals that will vary depending on the level of services provided. AppStore services, including the AppStore Referral Program and AppStore Checkout, are currently scheduled to be offered in a phased approach throughout 2007.

"AppStore is a startup's dream," said Narinder Singh, Founder and CEO, Appirio. "Salesforce.com has removed key critical barriers to startup success. Providing a turnkey global distribution network will allow us to focus on coming up with innovative applications."

AppStore Referral Program
The AppStore Referral Program will provide access to marketing services intended to increase demand for partners' AppExchange solutions. The Referral Program will be offered at two levels:

Standard Referral:

  • Premium placement on searches and AppExchange categories
  • Marketing program and event eligibility and benefits
  • Incubator eligibility
  • Requires 10 percent referral fee on all closed transactions
  • Voluntary program is currently scheduled for Q1 of calendar 2007
Premium Referral:
  • All above benefits plus
  • Demand generation programs
  • Structured seminars to educate salesforce.com customer-facing employees
  • Premium listing on AppExchange
  • Must meet certain eligibility requirements to participate
  • Requires 25 percent referral fee on closed transactions
  • Program and service availability is currently scheduled for Q3 of calendar 2007
AppStore Checkout
AppStore Checkout will provide a comprehensive package of commercial services to enable developer and partner success. AppStore Checkout includes:
  • Online ordering, billing, invoicing and collection services
  • 20 percent commission on all amounts invoiced on an ongoing basis
  • AppStore Checkout will be offered separately from the AppStore Referral Program and commissions will be independent
  • Program and service availability is currently scheduled for Q4 of calendar 2007
For more information on the AppStore or how to join the AppStore Referral Program, please visit: http://www.appstore.com

AppStore — Accelerating Customer Success On-Demand in Every Part of the Enterprise
With AppStore, customers will be able to purchase partner applications directly on the AppExchange. Customers will benefit from integrated commerce, interacting with a single vendor and having a single invoice for both their salesforce.com and complementary partner subscription fees. Salesforce.com will process transactions for and distribute subscription fees to partners. Through AppStore, salesforce.com will help drive customer success with partner applications.

"AppStore will give customers a one-stop shop for on-demand applications," said Bruce Richardson, Chief Research Officer, AMR Research. "The AppStore will offer all the application choices that customers want, delivered with the simplicity of a single vendor."

Pricing and Availability
Salesforce.com will provide AppStore services to partners for a revenue share percentage of closed deals that will vary depending on the level of services provided. AppStore services are currently scheduled to be offered in a phased approach throughout 2007: Standard Referral in Q1 of calendar 2007, Premium Referral in Q3 of calendar 2007, and AppStore Checkout in Q4 of calendar 2007.

Customers who purchase salesforce.com applications should make their purchase decisions based upon features that are currently available.

Customers will not be charged additional fees for using AppStore services.

The Apex platform, formerly known as the AppExchange platform, is available today. As previously announced, the next release of the Apex platform is 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.

About salesforce.com

Salesforce.com is the world’s largest provider of customer relationship management (CRM) software. For more information about salesforce.com (NYSE: CRM), visit: www.salesforce.com.

Any unreleased services or features referenced in this or other press releases or public statements are not currently available and may not be delivered on time or at all. Customers who purchase salesforce.com applications should make their purchase decisions based upon features that are currently available. Salesforce.com has headquarters in San Francisco, with offices in Europe and Asia, and trades on the New York Stock Exchange under the ticker symbol “CRM.” For more information please visit http://salesforce.com, or call 1-800-NO-SOFTWARE.