Provoking: The blog of Filip Dousek

Three companies have caught my eye in the last few months thanks to their innovations in business models coupled with a focus on the developer community: Force.com, 3scale and CloudMade. I will use them as examples in this three-piece discussion of the good things that are lately happening to the developer. The trio are a diverse bunch, but I will write about them together to try and show from different angles that the refocus from the end customer to the developer is not trivial, and cannot be boxed simply as ‘infrastructure’.

Something else is emerging from the fog of clouds, platforms, APIs, business models and crowd-sourcing: A next layer of aggregation with prefabricated sets of infrastructure, services and customers, luring the developer. Think iPhone. Playgrounds, ecosystems, complex live platforms. They are now starting to provide a ready-made business environment, thus adding yet another layer of leverage to the already nicely leveraged and scalable method of problem-solving that is software.

The choice of platform defines the starting point of every project. If I want to win the marathon, I might consider starting on mile 2. Or mile 12. In business, this isn’t cheating. No one starts at mile 0, we all utilize platforms. For example, the electricity grid. Who would start their next big idea by producing electricity, soldering own laptop and hacking an operating system? We now consider these elementary platforms a given (without even feeling blessed). The real advantage is then made (or missed) by using convenient languages, ‘cross-platform’ platforms (Adobe Air/Flex, Google Gears), open-source building blocks, elementary cloud services (Google App Engine, Amazon Web Services) and recently complex platforms. I like the ones that come with a business model, so let’s look at one.

One Free Lunch, Please
Salesforce is a trailblazer. Some years ago, they have built Salesforce.com, a CRM software that has become the largest SaaS application on the market. It is the flagship experiment in SaaS, prominently discussed all over the web. A large part of the discussion revolves around costs to customers, due to the subscription pricing that has become synonymous with SaaS. But there are far more interesting innovations inside Salesforce.com than customer pricing.
Technically, Salesforce.com is more than CRM software. The underlying architecture has received a lot more thought than is needed to build CRM. It was developed with a strict multi-tenant approach (which is the proposed solution to a number of inefficiencies in traditional software delivery, and therefore of great interest to many developers). Both the database and the code have added layers of abstraction that allow deep individual customization within a shared system. For example, there is no Customer Account table, no Sales Event table. Instead, there is a set of meta tables such as Data, Objects, Fields, Indexes and Relationships. The same meta tables will hold both Customer Accounts and Sales Events. Cars. Mileage. Alien Sightings. The same tables will track Cars for one tenant, and Alien Sightings for another. Similar abstraction is applied to the code and UI. So architecturally, Salesforce.com is not a CRM system, it’s the largest running solution to multi-tenant platform software.

Salesforce then took the next step: They have turned the architecture of Salesforce.com into a service – a (relatively) blank platform that can be used to build applications very different from the original CRM. The Force.com platform offers the resolved, functioning approach as a development starting point to everyone. With zero upfront costs (except the cost of mind porting – learning the architecture, the Java-based Apex language and Force.com specifics and limitations), every developer can write a multi-tenant app on a proven platform and reap instant benefits:

• Fast deployment to first customer (the number of technical features, and development business process know-how that come with the platform)
• Fast deployment to further customers (scalability of hardware, software, deployment model, upgrades, customization)
• Instant customer base (55 000 customers accustomed to the technology, using the platform, used to paying for service, able to test drive and install the next application in a few clicks)
• Rapid innovation (fast deployment + crowd-sourced ideas from customers = evolution lab for good software. Salesforce claims that this is a key ingredient behind the success of Salesforce.com.)

Now Show Me The Money
OK, so having a multi-tenant platform for free is nice, but how do you make money with it? Ta da, on the AppExchange. Force.com with AppExchange is a similar combo to iPhone with App Store. Both are development platforms that come with an efficient marketplace. Yes, one is mobile and the other a web platform, which might sound like comparing Apples to oranges. But consider this: Many developers (companies, startups) don’t just choose a platform to suit their project; they are increasingly choosing a project to suit a good platform. iPhone app, Facebook app, Force app? In that moment, all platforms compete against each other for the developer. So what does AppExchange offer, compared to App Store?

• Customers: In place of several million consumers, here are 55 000 business customers prepared to try out the product.
• Pricing: Business customers are used to paying for a service, and these ones are accustomed to monthly or yearly service fee (per user). This creates a more sustainable long-term relationship than the essentially pyramid scheme of App Store.
• Distribution: Download and installation is almost as easy as on the AppStore. Trial period is automatically available and Salesforce customers seem happy to try new apps (280 000 trials recorded).
• Business: This does not mean only access to the marketplace. Marketing, customer support, technical support, communication, ongoing development, upgrades, and related business processes are common to all AppExchange suppliers, and the synergy is well supported by Salesforce. By this I don’t mean email support, I mean your own business process tools that come with Force.com. See an example of the depth of the platform here: Managing ideas.

The end result (or rather the starting point) is a prefabricated generic business. It is like coming to a shop and saying ‘Hello, I would like a business, about this size, no colour, please, and I want it with zero deposit. I’ll just pay you a commission if I make some money.’ And Salesforce goes – ‘Yea, here you go. Next please!”
Isn’t this called franchising? I see franchise platforms.

The developer can now start at mile 16, launch fast (fast enough to forget about funding!) and focus on his product. Faster development -> more apps -> more happy customers -> more money -> more developers. More Salesforce, more iPhone. More platforms with business models. And more fractals.

[to be continued]

Small print:
Force.com will not suit every project, and a good start for considering the specifics is to check the documentation and governing limits.
I am not connected to any of the companies mentioned.