IT|Redux

AppSpace Looks Great but Too Expensive

Tuesday, March 20th 2007 | Ismael Ghalimi

Yesterday, Salesforce.com launched its Spring ‘07 edition, and announced AppSpace, a platform allowing the development of customer-facing web based applications powered by the Salesforce.com application and the Apex language. AppSpace is currently scheduled to be available in April as a limited release, and looks very promising. Unfortunately, its current pricing will put it out of range for a broad category of existing or potential Salesforce.com customers.

According to Salesforce.com, AppSpace is built on the Apex platform, supports powerful capabilities like embedded mash-ups, custom tabs and objects, and workflow, enabling any company to quickly tailor its own unique customer experience.

I like the concept very much, and could see myself using it for developing a fairly advanced conference management application that I could use for the next edition of the Office 2.0 Conference. Unfortunately, AppSpace is currently priced at $995 per month, with a limit of 200 public users. I expect between 500 and 750 participants for the conference, which means that I would have to pay something in the range of $2,000 per month in order to use AppSpace. Between this and the free Event Wax, which also support payment (AppSpace does not at this point), the choice is all to easy: I will have to go for Event Wax, and wait for them to develop an API that would allow me to integrate it with Salesforce.com.

To be fair, I might not be representative of the Salesforce.com user base. With 29,800 customers and 646,000 subscribers, the average Salesforce.com customer has 22 users, while I’m the sole user of my personal Salesforce.com instance. Nevertheless, if we assume that most customers are using the team edition priced at $65 per user and per month, their monthly bill is $1,430. Adding the AppSpace option means that their bill will go up 70%. I must believe that such a sticker shock will convince most potential users to look for alternatives, and that’s too bad.

As mentioned in this past article, Salesforce.com is trying to build a platform, and as such must lower any possible barrier to adoption, especially when trying to get developers on board. Apex and AppSpace are directly targeted at developers, yet the pricing defined for AppSpace makes it look like its actually targeted at the business user who selected Salesforce.com at first place — a Vice President of Sales usually. This might work for Salesforce.com’s larger customers, but for smaller users like myself, it just does not. Note to Marc: please revise your pricing.

Entry filed under: Office 2.0, SaaS

One Comment - Add a comment

1. Dennis Howlett  |  March 24th, 2007 at 10:23 pm

I don’t necessarily agree, but then it depends on how pricing has been worked out.

A 5-person team taking this on at full price, assuming they take access to most of the applications in AppExchange, would maybe shell out $30K tops in a year. Assuming this allows them to give access to (say) 200 customers to whatever information they’d like to self-serve, plus the potential to provide real functionality… The economics stack the other way very quickly when compared to human costs.

I’m not saying it is that simple, because there’s enough doubt in what access really means in Salesforce.com license terms to leave a significant potential query on my numbers. Either way, I agree that Salesforce.com pricing needs to be more coherent. I rather suspect Salesforce.com won’t be the only vendor under the pricing spotlight as the SaaS model rolls out.

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