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Salesforce.com places top-down bets on AppExchange ISVs

More interventionist

Freeland recognizes the value of this strategy, but says Salesforce.com must also adopt a more interventionist approach. "We are going to have a ground-up approach similar to today's approach of '1,000 flowers blooming' where it's hard to predict where the innovation will come from," he said. "[But] we will also have some top down bets... that will prime the pump of bringing together the right vertical ISVs with the right charter companies... to build AppExchange."

The "charter company" strategy is an approach used by Freeland's previous employer, Accenture - where Freeland was managing partner for Accenture's CRM business. The "charter" approach sees an ISV build as a so-called solution for a specific end-user rather than pro-actively building software for sale off the shelf.

It is through this strategy, and during the courtship of enterprise ISVs, that Salesforce.com apparently plans to target its four chosen vertical sectors. "You will see us focus on some key industries," Freeland said.

Of course, AppExchange is a hosted service and ISVs will have questions about whether making their software available as a service means they must change their architecture from client/server. The answer seems to be a "maybe".

Freeland says ISVs that don't want to re-write code can "take a composite approach", of having a thin, web-enabled layer running in AppExchange with the rest of the data and application logic hosted on a back-end server. One option is to develop a hosted version of the existing suite, as Business Objects plans.

As for SAP, Oracle and Microsoft, Salesforce.com can expect resistance - or at least reticence - to joining AppExchange and integrating with Salesforce.com. Freeland believes that integrators, like current Salesforce.com partner Tata Consultancy Services, could help sidestep this by building plug-ins to the competitor's software for customers that would be made available through AppExchange.

"Customers' [demand] will ultimately drag ERP providers to the table," Freeland predicted.®

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