Enterprise Software: App Stores Revive Enterprise Apps

In another sign that consumer technology is influencing the direction of technology used in the enterprise, App Stores catering to the needs of the enterprise are beginning to popup.  Apple popularized the on-line self-service model for selling software and data with their  iTunes Store and then again with their App Store for the iPhone.  The mobile App Store concept has been an unqualified success — research by Canalys finds that sales of mobile apps is growing at an annual compound rate of about 50 percent.

Mobile software sales are expected to reach $14.1 billion in 2012 which is a 92 percent increase from $7.3 billion sales in 2011. Apple alone now reports that their App Store has more than 425,000 applications and has served up more than 15 billion downloads.  ABI Research estimates that the total number of downloads will reach 44 billion by 2016.  Apple is not alone in the world of mobile App Stores — other mobile App Stores now include Google’s Android Market, BlackBerry App World, Intel’s AppUp, Samsung Apps and Toshiba App Place.

Now the concept of the App Store is also moving into a totally new landscape — the enterprise.  First, there is simply cross-over business — as of January, 88 percent of businesses with iPhones are testing applications that they’ve had their employees download from Apple’s App Store.  But now there are also App Stores appearing the supplement the features available in standard enterprise software, like ERP applications.

A Forrester report written by China Martens and  Paul D. Hammerman reports on vendors like Salesforce.com that are now targeting the enterprise.  Salesforce’s AppExchange now has more thna 100 different applications.   NetSuite has set up a similar app store for software add-ons that complement NetSuite software.   Alok Goyal, COO, of SAP Indian subcontinent, said that SAP is “also considering the idea to an have an SAP store in the lines of App Store for business applications.”

The report finds that “Dedicated websites, dubbed “app stores” or “app marketplaces,” are emerging as an additional ERP app showcase and/or purchase channel option. Business-focused app stores are also set to serve as new kinds of internal and external engagement hubs between end user and vendor communities. Business process pros should use ERP vendor app stores as a model for internal app distribution as they look to better administer their employees’ consumption of apps.”

Martens says in the Forrester report that “Some ERP apps vendors are positioning their app store as a way to highlight their own platform-as-a-service (PaaS) — both the apps they develop on the PaaS and those developed by partners… Each app listing within the store will include user-generated ratings, reviews, and recommendations, as well as the potential to download, try out, and buy the app. Today, the click-to-buy link frequently puts the customer in direct touch with the seller — the ERP vendor or its partners — rather than having a transaction occur directly within the app store.”

The report also suggests potential users of ERP App Stores to use the following strategy:

• Do your homework.  Find out which applications are available and would possibly benefit or supplement your current application implementation and process.  Then perform a trial.
• Check out the vendor of the software.  It often will not be the vendor of the enterprise application that it supplements.  Check out the credentials of that vendor, their products, pricing, features and reputation.
• Check out your current enterprise application usage and monitor the usage of any additional applications to help factor in the usefulness of the application and software feature.  That information will help in determining what the benefits of the add-on application is and whether additional add-ons may be useful.