Jacob Rouser
Nov 19, 2019

This year marks the third year of our State of AppExchange Partners Report. Following up from last year’s report, we are showcasing why the AppExchange has reached “Prime Time.” Our report explores how partners are leveraging the AppExchange to achieve their growth goals, and we reveal the results of our survey to examine partner strategies, platform investments, and industry performance.

As a special feature for this year’s report, we’ve partnered with Crunchbase to provide a deep dive into investments and funding of the global SaaS industry and AppExchange partners.

[Download the Report]

Here is a sample from our Executive Summary that sets up the theme for this year’s report and answers what it means now that the AppExchange has reached the Prime stage.

Prime Time

Last year’s report supported the theme with evidence that the network effects of the AppExchange had fully kicked in, with over 160,000 business accounts on one side and over 4,000 products on the other side. Salesforce’s AppExchange Partner keynote at last year’s Dreamforce further backed our report, with their research showing the same effects.

This year’s theme of Prime Time is based upon Ichak Adizes’ Corporate Lifecycle Model, which enables the diagnosis of organizational systems and challenges, including normal and abnormal problems that the organization faces. By all measures, the AppExchange ecosystem is squarely in the Prime stage, with the business enjoying consistent, above-average growth, goals being set and exceeded, and intra- and inter-organizational integration and alignment.

The survey and research this year continue to highlight accelerated growth, and goals are being set and achieved, if not exceeded. Over 95% of respondents forecast that revenue growth will increase, with 39% stating growth will significantly increase.

Since the launch of Health Cloud and Financial Services Cloud three years ago, Salesforce began transforming from horizontal platforms like Sales and Service Cloud to industry-specific platforms. The go-to-market strategy includes data models and functionality that specifically support individual industries with strategic ISVs filling whitespace and providing sales assistance. This year’s survey verifies that the focus on industries has a causal effect on ISV recruitment: 27% of respondents sell to only a single sector. The ecosystem has begun the transformation from general-purpose business applications like document generation, workflow, and electronic signature to industry-specific applications like banking, healthcare providers, and pharmaceuticals. Unsurprisingly, Financial Services, and Healthcare and Life Sciences are the two leading industries given the time they have been in market.

The core thesis in the lifecycle framework is that the organization must continue to invest and innovate to remain in Prime stage. Salesforce is unrelenting in investing in innovation for the AppExchange, with:

  • New clouds and market segments

  • New license types (Connector made up 27% of respondents this year)

  • New partner benefits to be launched at Dreamforce 2019

  • New technologies like Lightning Web Components (LWC) and App Analytics

[Download the Report]

Some key findings from this year’s report:

  • 65% of respondents state their participation in the Salesforce ISV program increased their Company’s revenue

  • 48% of respondents leads came from the Salesforce channel 

  • 50% of respondents in high-growth companies (those who said their revenues were significantly increasing) predicted growth in all 3 areas: sales personnel, developer personnel, and R&D (both internal and external)

  • AppExchange ISVs represent roughly 7% of global SaaS companies while receiving roughly 19% of global SaaS funding. AppExchange ISVs represent a greater share of investment dollars proportionately.

We also answer explore how partners are leveraging new distribution strategies to bring their product to the Salesforce platform, the top 3 challenges partners face in the coming year, and how Salesforce’s investments into industries is paying off for industry-specific ISVs as well as more traditional general business applications.

[Download the Report]

If you’re attending Dreamforce this year, CodeScience CEO, Brian Walsh, is hosting a panel with Heather Lavoie, President of Geneia, Meghan Nesbit, Director, Twilio.org at Twilio, and Brian Rash, Director, Strategic Partnerships & Pricing of Sparta Systems to discuss our findings and to hear first-hand experiences of these leading ISVs of how their strategies are paying off.

[Save Your Spot Here]

If you’re interested in all the ways you can connect with CodeScience at DF19, check out our events page here: https://dreamforce2019.codescience.com/ — there you can find all the sessions we’re participating in, how to book some time to meet with us, and request an invite to our annual party.

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