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May 17 2011

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AppDirect will sell your B2B apps, er, direct

The cost and complexity of creating a new business-to-business software-as-a-service (SaaS) application has reduced significantly over the past decade, but the challenge of getting that carefully developed new software more widely known and then getting revenues from end-user customers can defeat some developers. Launched in the US in July 2009 (and recently seed-funded to the tune of US$3.25m), California-based AppDirect aims to help B2B service providers sell SaaS-based tools to their customers and manage incoming subscriptions.

AppDirect has created a Marketplace-as-a-Service (MaaS) platform so that B2B service providers can offer cloud services to their existing customer base quickly and economically. Initial take-up has been driven by telecoms providers (in Canada, Bell Business Apps Store services a significant base of SMB clients) and financial services businesses, but AppDirect’s Max Rhodes told me there was ample scope for channel partners – publishers or trade associations, for example – to create their own white label marketplaces populated by vendors keen to sell SaaS to their readers or members.

AppDirect has an “intelligent recommendation engine” that guides users towards the most relevant applications for their business, and customers benefit from having a single place to subscribe to applications, provision access to their colleagues, and pay just one monthly bill for all of their app subscriptions.

Via AppDirect’s API, developers can easily distribute their applications through the marketplace network (integration typically takes less than a week). Their SaaS tools are then promoted online to relevant target markets, with user feedback helping guide new users towards tools that are recommended by existing customers and/or end-users. And once tools are selected, AppDirect takes responsibility for subscription management (taking a modest commission on sales, of course); “this frees up the software developer to focus on creating really good apps and on managing customer support”, said Max.

SaaS construction opportunities?

Over the past decade, the success (or otherwise) of existing construction SaaS vendors has often depended on how effectively they have marketed themselves, managed their existing customer base – limiting ‘churn’ through good quality of service – and kept their overheads low. Like conventional software houses, they have tended to use direct sales teams, but this can be expensive and solutions may require some manual intervention before they are deployed for customers/end-users. UK-based collaboration vendor Woobius, for example, has tried to expedite the process by going self-service (post), but there is currently no easy route to market for most of the applications in this sector. Rival provider Asite has also floated the idea of its platform being used to host other, complementary applications: so-called Platform-as-a-Service (post; AppDirect is also interested in this opportunity).

In the early 2000s, various marketing alliances were attempted. For example, BIW Technologies partnered with BT to offer the BIW collaboration platform to ‘BT Build Business’ customers – 2003 release; a ‘project extranets’ minisite was created on the Construction News website; and the NCCTP saw eight UK-based vendors join together to help grow the market (among other reasons) – but none of these ventures had a dramatic impact on the collaboration sector, though it was still very early days for SaaS.

However, time has moved on, and an AppDirect-type approach could be part of the answer, particularly as the flow of new Software-as-a-Service tools targeting the construction sector seems to be accelerating, creating a “long tail” of specialist tools all targeting the same vertical market and so complicating the AEC customer’s task of identifying suitable applications. Moreover, if AppDirect promotes consistency in use of a particular programming interface, then it may find itself in demand as a PaaS solution, and – through its end-user rating system – provide a service to developers looking to identify popular applications with good potential synergies.

Permanent link to this article: http://extranetevolution.com/2011/05/appdirect-will-sell-your-b2b-apps-er-direct/

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