The march of the app stores continues, but this time for the enterprise, not the smartphone.  Earlier this week Google launched their Apps Marketplace to much fanfare with about 50 apps including Intuit, Concur, TripIt and Zoho and reportedly bigger players like Netsuite are on the way.  The App Marketplace provides very tight coupling with their Google applications like Gmail, Calendar and Docs and With OpenID integration, Google Apps users can access the other applications without signing in separately to each.  Certainly a benefit for ease of use, but I wouldn’t be surprised to find that many CIOs and IT professionals don’t feel too good about entrusting a part of their security to Google.

I’ve read in a few areas that Google’s move is mean to bolster Google’s position against Microsoft’s cash cow, the Office suite of productivity apps which sells for $400 – and hasn’t really changed in 10 years other than the introduction of the ‘ribbon’ UI – versus Google’s productivity offering which is free or you can purchase the “business” version for a mere $50/year.

Clearly this is the thrust of the announcement at this point in time, with Google VP, Engineering Vic Gundotra stating: “The Applications Marketplace makes it easy for domain administrators to discover and install new software and have it integrated into Google Apps.”

But I’m not sure that this is the real target.  Dennis Howlett questions whether the Google Apps Marketplace is ready for primetime, but notes that surprisingly Salesforce.com was conspicuously missing from the announcement.  I was not particularly surprised and it leads me to my primary question: “What is SFDC CEO Marc Benioff thinking about Google’s little announcement?”

This to me is more likely another gambit to try to strengthen Google’s position in the Cloud/PaaS market than it is to try to destroy Microsoft’s in the productivity app space…although I don’t doubt it’s an objective.  I think that the Google App Marketplace is in direct challenge to SFDC’s AppExchange and SFDC’s attempt to become a Cloud platform company with Force.com.  Now I suppose there could be technical coexistence, but as each is trying to build their own app portal and become a PaaS play (Force.com v. AppEngine), there seems to be too many competitive obstacles for me to see them playing together.

For sure SFDC has a huge lead in terms of apps available on AppExchange (~1,000) versus Google also has several advantages in this battle (if it’s indeed taking place):

• Openness: It’s true that to connect with either the Apps Marketplace or AppExchange you don’t need to leverage their PaaS platforms, but that’s clearly the direction both Google and SFDC would like you to go.  Google by far has a more open PaaS platform where you have much more flexibility in the code choices that you use.  Force.com on the otherhand requires you to use their proprietary APEX code which is much more painful to migrate to and, while similar to Java and doesn’t have a terribly steep learning curve, requires your developers to learn a new language and development environment.  And there’s a bit of “Hotel California” feel to the platform because as difficult as it would be to move to APEX, it would be equally as difficult to leave it.
• Rabid Developer Base: You can’t swing a dead cat without hitting someone who wants to develop on Google these days.  As Don Dodge notes in his post about the Apps Marketplace “Building a vibrant ecosystem on a business platform is all about developers. Giving developers an easy way to sell their products to millions of customers is a big plus.”  And there is no question that Google is committed to growing it’s developer base.  Don’s presence at Google is testament to that (and I’m still flummoxed as to why Microsoft ever let him go; but that’s another story).
• Larger User Base: There’s no question that Salesforce is an giant in the CRM industry with over a billion dollars in revenue and surpassing the million user mark and about 72,500 customers.  Compare that with Google’s Apps user base: 25 million people are using Google Apps in more than two million businesses. It recently said that only hundreds of thousands of those users were paying customers. But those are still huge numbers and doesn’t include the 150M users of GMail or takes into account the fact that SFDC has had well over a decade to build to those numbers while Google Apps is a relatively new service.
• Search: Oh yeah, that’s right.  Google does search too.  Now I’m not saying that somehow Google will automatically bump up Marketplace participants in their search results. But the fact of the matter is that a lot of people start their day in Google and that can’t hurt.  I can also see opportunities in the future where companies can enhance the functionality of their products by integrating Google’s search technology directly into their products and that can’t be bad.

Anyway, if I’m Benioff I’m concerned.  But so far it looks like everyone’s playing nice or at least deflecting any discussion.  Gundotra only focused on Google’s apps and recently Benioff has been talking about why enterprise software companies aren’t more like Facebook (who Google also seems to have in their sites, although Buzz and Wave have been less than inspiring so far).  So I’m not sayin’, I’m just sayin’.

What do you think? Should Salesforce be worried?  What do YOU think Benioff is thinking? Let me know.

According to a recent post by SD Times’ David Worthington, the Azure team is projecting that 50,000 applications will reside in its cloud within three years.  Did anyone expect something different?

Everything at Microsoft is big, and if it can’t be big, it can’t be at Microsoft.  The company has over 10 products that have annual sales over a billion dollars.  And with a large installed base of applications already written on the .NET framework, it’s logical to think that many companies will develop their next generation applications on the next generation of Microsoft technology, especially as Microsoft is trying to make the upgrade path smooth.  But the operative word is “trying”.  Even according to their own website, many of the new .NET Services are still in the works, although I don’t doubt that they’ll get it done eventually.  But the question is when. Time is ticking along.  Force.com has over 100,000 applications already and AWS and AppEngine are picking up steam.

And that’s why the introduction of the concept of Azure was more important to the actual set of services and technology. Part of the strategy is a stall.  Don’t develop on AWS or Force.com or Google’s AppEngine, wait for Azure.  It will make life easy, it will feel good.  Even the name evokes visions of sitting on a beach looking at beautiful blue waters under crystal clear skies.  But at the end of the day they’re going to have a deliver a platform that performs very well (as a comparison, Salesforce.com runs its’ entire business on about 1,000 servers — that’s extremely efficient) and provides a reasonably clear and easy upgrade path to existing Microsoft shops.  And more importantly, it’s going to have to deliver a strong business proposition.  Worthington states that “…[Microsoft] is pitching Azure more on its merits as a business model than as a technology,” and they’ll have to.  How they structure the platform pricing and cost of the different software components will be key.  But the guys at Microsoft are no dummies, so we’ll see what they come up with in a month or two.  But otherwise, there are a lot of technology options and interesting business models that ISVs and Enterprises alike will have to choose from.