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There has been a lot of fevered writing over the last few days about Salesforce.com increasing the price it charges to security review paid-for applications on its AppExchange. The fee will rise from $300 to $2700 with the company saying it will use the proceeds to speed up the process of delivering security reviews i.e. it is not using this as a revenue generation opportunity. The fee is on top of the 15% or 25% charged on net revenue for applications sold through the online store.
It is a major hike and may well deter some individual or small developers from developing for the AppExchange. Even some large ISV’s may be put off. We have anecdotes that some ISV’s already consider the AppExchange to be expensive. Meanwhile, revenue streams for suppliers selling enterprise applications through public app stores in general does not appear to be as large as was expected. As the market moves to the cloud, application stores will become a more important channel to market but at the moment they are still finding their feet.
Increasing the security review fee could change the mix of applications on the AppExchange, where currently around 40% of applications are free. If it results in more heavy-duty enterprise class applications, including applications for the large enterprise back office which will encourage growth in this under represented area, it could be actually be a positive move. As have said many times, SaaS needs to move seriously into the back office, and may need an unconventional push to do so.
