Independent Software Vendors (ISVs) and the proliferation of B2B application marketplaces
Part 2: The ISV Application Marketplace
Note from the author: This is the second article in a series of three articles that aim to provide an overview of what ISVs are in the context of a business user. In case you missed the first article, here’s where you can find it. This second article provides a primer on what ISV application marketplaces are.
A brief history of application marketplaces
Think of a store where you can buy applications, and the one that would likely have come to most people’s minds in the first half of the last decade is the Apple App Store.
Launched in 2008, Apple’s App Store popularised the application marketplace model and promoted independent app development further. The Google Play Store (formerly Android Market) followed suit soon after, further enhancing a trend that’s common in the ISV marketplace models today — application developers can build the same app to work with different platforms and marketplaces, to reach more users and retain them when they switch from one platform to another (in this example, from iOS to Android or vice versa).
Although the credit to popularising the marketplace model may go to Apple, the laurel for introducing the first ever application marketplace would likely have to go to Salesforce. A company that had its roots in making customer relationship management software, Salesforce launched its B2B application marketplace — called the AppExchange — in 2006.
Trivia: As story has it, Marc Benioff — the founder of Salesforce — gifted the App Store trademark and domain to Steve Jobs — the founder of Apple. He was whom Marc got the idea from to launch an application marketplace in the first instance.
How app marketplaces work for the end customer
Most ISV application marketplaces work in a similar fashion. There’s a primary ISV application/ platform that a customer decides to use for their particular need — based on their industry of operation or main workflow that they want software to help aid — on top of or into which other application vendors have built their applications to work with.
These applications are listed for sale on the marketplace hosted by the primary ISV. In the earlier B2B application marketplace example, Salesforce is the primary ISV and they host their marketplace where other ISVs can list their products and services for purchase.
Once a business chooses a primary ISV application, they can shop around on the marketplace and decide which additional ISV applications they would like, to bolster the capabilities afforded by the primary ISV. The available products and services are often quite wide ranging, accommodating for a variety of business needs.
Bringing this back to the context of the business user, let’s take an e-commerce retailer as an example. Let’s assume they have decided to use BigCommerce, an ecommerce platform, as their primary platform of choice. They can go to BigCommerce’s application marketplace and purchase other applications that are built to work or integrate seamlessly with BigCommerce. For instance, let’s say they want all the sales data from their e-commerce site to be reflected in their company accounts. They could connect an accounting platform, like Xero, and have that information flow seamlessly between both systems.
The applications listed on an ISVs marketplace are often technically integrated with the primary ISV who hosts the marketplace, BigCommerce in this example, allowing them to share the relevant data between each other. Which leads us onto the next trend or characteristic about many of the marketplace models today.
ISVs that host marketplaces are available on other ISV marketplaces
To rephrase that
ISV applications are often available on multiple ISV marketplaces
What does this imply? That choosing the ‘primary’ platform or ISV may not necessarily tie you into a set of solutions and applications for the long run.
Revisiting the case of choosing a phone for personal use. Once you decide which platform and phone works best for your needs, you would often go about downloading applications that you would like to use. What happens to your applications if you change your mind and decide you want to switch over to a different phone and platform, moving from iOS to Android perhaps?
Let’s take the example of the rather ubiquitous WhatsApp:
- You download the application, create an account, and message acquaintances to your heart’s content
- Should you decide to switch from an iPhone to an Android device or vice versa, that doesn’t pose a problem at all. The application vendor — WhatsApp — has developed applications that work on both platforms
- All you have to do is download the relevant application for your new platform and phone, and activate or link your account again
- Once you do that, your account information and settings will transfer over to your new phone
How is this possible?
An application often has a centralised location or database where details about the user are stored, and from where the ISV can control what services and products have been enabled for that user. These are then accessed by the user through an interface, sometimes specific to a particular platform. To highlight the steps in brief:
- When a user signs up and creates an account, regardless of the platform or device, the application creates a record centrally on it’s database
- Based on what the user has signed up for, let’s say the free or trial version of an application, the corresponding settings are stored against that user’s account
- The user can then login to the application from any other platform or device and the applications first checks against it’s records whether the user account exists
- The ISV then checks what permissions, products or services the user has signed up for and the user can continue using the application as they did
So, in the earlier example, if the business decided to switch their ecommerce platform from BigCommerce to another provider — let’s say Shopify — yet continue using Xero as their accounting platform, they could certainly do so. They will have their commercial agreements, accounting templates and company settings related to their account with Xero still intact. They can sign up with Shopify, link their accounts and settings from Xero and, hey presto, they’re ready to go again.
Disclaimer: With some ISVs and applications, the linking and configuration can be a bit complex, and competition in the industry is constantly encouraging ISVs to innovate and make these end user experiences simpler. The underlying principles of interoperability are largely the same though.
This level of flexibility and interchangeability afforded by software vendors and their applications, coupled with the proliferation of B2B app marketplaces, makes the proposition for using ISV applications even stronger for many. Carry on to the final article in this series to see an example of ISV applications in use to run the operations of a business.
