Trendspotting: Platform Ecosystems

For big enterprise services companies, the hot new trend is having a cloud-hosted platform for third-party applications. These platforms give app developers the resources they need to build, launch, promote, and integrate their apps with other businesses. This not only creates a bundle of exceptional business tools but it also creates a hotbed of savvy entrepreneurs with working solutions looking for partners.

Two of the largest cloud-hosted platforms are Salesforce.com’s AppExchange and the Google Marketplace. These two platforms-as-a-service are prime examples of environments that provide developers the cloud space and necessary tools to build and release their apps rapidly. In turn customers—whether other entrepreneurs, or small or large businesses—can integrate these apps into their own operations simply through the cloud with no downloads required.

In 2007, I met Kirk Krappe, CEO of a small startup called Apttus. Kirk and his two cofounders, Neehar Giri and Nathan Krishnan, had earlier done a venture-funded startup called Nextance. Nextance was an enterprise software company providing contract management software. It raised $60 million in venture capital, and eventually failed. The team then decided to take their domain knowledge and start Apttus as a cloud-based contract management software company.

This time round, they decided to take no venture capital. They chose to build the company on Salesforce.com’s Force.com platform, which kept development costs low. The team was able to bootstrap the company, and within a couple of years, shot to $5 million in revenue.

A cloud-based contract management SaaS, Apttus has launched a thorough “quote-to-cash” offering on the AppExchange. It consists of numerous apps that work together such as Configure Price Quote, Contract Management and Revenue Management to name a few. Users can pick and choose.

Apttus’ CPQ, for example, allows users to complete the entire quote to order phase of their sales process within Salesforce.com. Starting with selecting products, then configuring and pricing them, leveraging up sell and cross sell opportunities, and ending with the generation of a contract that can be approved, negotiated, finalized and signed—it all takes place within the platform.

With over 130 employees, $50 million in revenue and customers such as Google and Delta Airlines, Apttus is now a leader in the quote-to-cash management market.

Another company that has successfully utilized Salesforce.com’s AppExchange to its full potential is San Francisco-based Mansa Systems, founded by Siva Devaki.

Mansa has launched numerous enterprise solutions within Salesforce, ranging from business data management to marketing to sales. Mansa has already reached over $2 million in revenue.

One of their apps, Cloud Drop, expands file storage space and size limits and enables folder hierarchies to better manage storage on Salesforce.com. The big players in the Cloud Storage space are Box and Dropbox and both have Salesforce.com integrations. Other storage apps within the Salesforce.com AppExchange include S-Drive and Appirio Cloud Storage. Mansa’s Cloud Drop differentiates with its unlimited file size capability and its substantially lower price point.

It is a native Salesforce app that leverages Rackspace Cloud Files to store content. With zero limitations, a user can upload a file of any size. Box’s file limit is 5GB and Dropbox’s limit is only 300MB. And whereas Appirio costs over $1,000 a year for 5GB of storage and S-Drive charges $600 yearly for the same capacity, with Cloud Drop that amount of storage would only cost around six bucks.

Cloud Drop also has other features that aren’t available to users of other AppExchange storage options. For example, it provides auto push e-mail attachments: the ability to

maintain file versions and send multiple attachments within Cloud Drop via email through Salesforce e-mail templates.

But the Salesforce.com AppExchange, while the first, isn’t the only successful cloud platform ecosystem on the market. Google has its own cloud-based Marketplace, as well, and the Google Apps Marketplace has its own fair share of success stories in areas like workflow management.

Cloud-based workflow management in the Apps Marketplace is split between three different core capabilities and of course they overlap in some areas. First, there are social task management workflow products that perform ad-hoc task/workflow management where end users can collaborate. Podio, the category leader, was recently acquired by Citrix for $53M. Podio is free for the first five users and there after it costs $19/user/month.

Second, there is integration-centric workflow that allows IT teams to create workflows that integrate with enterprise systems and cloud applications. While these apps support human centric workflow capabilities like UI forms etc, they are designed mainly to connect various enterprise and cloud based systems. RunMyProcess leads this category. RunMyProcess was also acquired recently by Fujitsu for $21M. RunMyProcess does not have a free option, but it does offer a free trial for 30 days for 20 users. The paid version costs $40/user/year.

Finally, there is cloud-based structured human-centric workflow. This allows business process owners in finance, human resources, and other departments to create well-defined business workflows that require collaboration among employees.

SMBs are generally under-served, with the workflow management vendors generally chasing large enterprises. In the pre-cloud era, such solutions would cost anywhere from $100K to multi-million dollars.

Kissflow, a Google App Marketplace product, is addressing this gap.

Kissflow positions itself as a self-service workflow creation and management tool for small and medium business users. Kissflow is specialized for Google Apps users and is deeply integrated with various Google Apps products like Google Docs, Google Open ID, etc. It is also hosted on Google’s cloud. The Standard Edition of Kissflow is offered at a very attractive price of $3/user/month.

Kissflow is a new product from OrangeScape, a small company itself with just over $1M in revenue.

The beauty of this model is that Salesforce.com and Google have made available cloud platforms-as-a-service upon which entrepreneurs can rapidly and cost-effectively build businesses. Platform vendors take a percentage of the revenues for products built on their platform, and the ecosystem works well.

The same phenomenon is evident all through the technology ecosystem—cloud, mobile, social—and all over the world.

Looking to Get More Hands-On Advice?

I receive many emails from entrepreneurs who want to discuss their specific businesses. I’m very happy to discuss your situation during my free online 1M/1M Roundtables, held almost every Thursday. During each roundtable, up to five entrepreneurs can pitch their businesses and receive my immediate and straightforward feedback.

To give entrepreneurs all over the world access to Silicon Valley’s knowledge, methodology, and network, I founded the One Million by One Million (1M/1M) global virtual incubator. 1M/1M aims to nurture a million entrepreneurs to reach a million dollars each in annual revenue and beyond, thereby creating a trillion dollars in global GDP and ten million jobs.

For those still testing the waters of entrepreneurship, I’ve written my Entrepreneur Journeys book series to inform and inspire.

If you are interested in entrepreneurship topics and my writings, you can follow me here. I hope to publish two articles on LinkedIn every week.

Photo: CC (BY) flickr photo by incredible guy