The Future of the App is inside the Store

2012 was the year of the enterprise app stores. All of a sudden partner solution catalogs morphed into enterprise app stores. IBM recently launched its PureSystems Centre, SAP recently demonstrated its latest enhancements of the SAP Store at Sapphire Madrid.

So what’s the big deal? For a long time partners have been able to publish and promote their solutions on the sites of ecosystem leaders. Will an enterprise app store help partner solution catalogs morph from static partner marketing tools to a vibrant, transactional e-commerce system?

Actually, we think yes. Consumer buying behaviour is shifting, and the customer buying experience is becoming increasingly important. There is a whole new consumer ecosystem out there. CIO’s no longer control what comes in and what goes out, they are increasingly pushed by employees’ BYOD and BYOapp into the enterprise.

The vendors mentioned before recognize the consumer evolution in the buying process. SAPPhire 2012 Madrid was all about the customer experience. A thread which was followed by all SAP business units, and the SAP store made no exception. So, let’s take the SAP store as an example. The SAP Store segments its users into three tiers:

  • Super User – CIO, with full access, control and authorization.
  • Enterprise User – limited authorization, full access
  • User – access and trials, no buying authorization.

This user segmentation allows for three levels of authorization. First it allows users to test drive apps and download apps in a controlled environment, offering flexibility yet limited security or intrusion breaches. The enterprise user  (business unit managers) gain insight into what kind of apps are used most or work best for his or her team, making it easier to make recommendations to the CIO on actual business usage. The CIO with full blown access and authorization remains in control, has the overview, streamlined license management etc. This actually creates a tighter link between business usage and technology requirements.

But to operate a successful App Store there needs to be more than just user segmentation. We see the following 4 requirements to move from static to dynamic.

  1. Volume & Value in the store – this means gaining traction in the ISV and developer community. Make sure that you have an attractive development platform. Cost and reward fees have to be considered. Some numbers from SAP:  SAP has 1700 sap and partner solution live in its store, 6.358 transactions and 700.000 online visitors. IBM has 250 apps live in its store – but started later than SAP.  It also means keeping track of what is listed in the store. Ensure certification processes are in order and that regular integration and compatibility checks are in place.
  2. Ease of Use – the SAP store look and feel is very much like the Apple’s appstore, with paid and free apps, possibility to rate apps, most popular, most recent, a recommendation engine etc.  Creating multiple buyer roles (which could also be tiered to enterprise hierarchy, enterprise roles, business units, or user groups) gives each group its own instant purchase and download authority. This easy to use interface will drive customer acceptance and usage.
  3. Flexibility of apps – the  ability to use and deploy apps everywhere, on demand, scale up and down, move from on premise to the cloud, will be crucial for adoption. Being able to use apps on any device (mobile, desktop etc) and any browser type (HTML 5).
  4. Manageability of apps – By having an enterprise appstore CIOs have a one point access and overview of their license agreements. It will be easy to look at volume purchase and distribution agreements, and to apply for corporate discounts, once you get to a certain volume.

In addition to the enterprise appstore, SAP also allows its customers to create their own, company branded corporate app stores, managed either by SAP, or the company itself. Following the thread of the enhanced customer experience, this makes it easier for the customer to engage its own customers, employees and supplier ecosystem.

So, who´s selling it?

SAP and IBM are not the only ones building an app store. Microsoft is developing its Office Store and Apps, though this is still in beta. The current Microsoft PinPoint partner catalog is still a very static partner solution catalog.  Google has its Google Apps Marketplace, a well developed enterprise community with many apps (70 apps alone in finance and accounting for example).  Oracle has not communicated anything that comes near these solutions to the analyst community. They may have it, but it is a well kept secret. Besides the app vendors there are specific appstore vendors like Partnerpedia or Boxtone. We do expect many more appstores to originate, on specific horizontal or vertical solutions. And in a few years this market will consolidate, and it is questionable how many appstores will eventually survive. In the exponentially growing app marketplace, users will be more likely to have a bias towards a particular vendor than to work with several, let alone a myriad of appstores. Though consumer oriented appstores will have higher usage rates, the transaction value resides in the more business oriented ones. The vendor that finds its way to the transaction value through consumer usage holds the Holy Grail.

Are you buying it? Let us know!


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About Simone de Bruin