Whither Application Marketplaces?

Everywhere you turn in ERP-land these days, up pops another app marketplace. The roster of ERP players large and small with online showcases includes Lawson, Microsoft, NetSuite, Openbravo, SAP (with EcoHub and its upcoming SAP Store), and xTuple.

Today’s ERP app marketplaces have a stronger focus on window-shopping than trying to be a software equivalent to Apple’s iTunes store. Vendors are using their marketplace websites to draw attention to an increasing variety of their own and third-party ERP app extensions as well as complementary products and services, segmented by industry, line of business, and product type.

What do you think is driving the move by ERP apps vendors to open marketplaces and what might those sites may evolve into? Here’s some of my current thinking on both topics:

Why have an app marketplace?

  • Reflected glory. By the scale and breadth of its offerings, an app marketplace can give customers a sense of a thriving ecosystem growing up around the vendor’s ERP software. At the same time, overstuffed marketplaces with limited ratings and segmentation can be confusing places for customers and partners alike.
  • Future M&A. ERP vendors can mine their app marketplace to gain insight into the extensions and apps of particular interest to their customers. The vendors can use that knowledge as a basis for future investment, either taking a stake in or buying outright the most popular third-party software.
  • Expansion of app usage and customer retention. ERP vendors are working to make their apps more usable and opening up the data they hold to a wider set of users. App marketplaces can help flag ERP-related extensions and apps suitable to non-traditional ERP users.
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