Gartner estimates that global revenue from app stores is expected to rise 62 per cent this year to $25 billion. This presents a huge opportunity for enterprise software producers and they must purposefully target this market to secure a slice of the pie.
While app stores are typically associated with mobile devices and the distribution of associated low-cost, high-volume consumer software, the benefit of app stores can extend to the deployment of traditional enterprise desktop and server software with a large enterprise. There are numerous benefits to enterprises that use an app store to deploy applications within an organisation, including:
· IT and purchase cost savings through streamlined procurement processes
· Software licence cost reduction through licence reclamation, a process to reallocate unused licences
· Increased employee productivity by enabling employees to more rapidly select and use the software needed to perform their jobs
· Higher likelihood that the organisation will remain compliant via reporting and tracking mechanisms available in app stores
The benefit of deploying applications via an app store for a software producer is part of a channel or go-to-market strategy to broaden deployments within companies by making it easier for enterprise clients to select, buy and use your software.
Enterprise applications are not App Store ready
However, most enterprise application producers today are not using app stores to deploy their software. There are several reasons for this.
First and foremost, their apps lack the capability to offer varied pricing and are unable to offer the B2B payment models that are de rigeur for app store marketplaces. This includes the ability to allow purchases through purchase orders and wire transfers. Also, the apps don’t incorporate a channel strategy that allows the product to be sold via partners or resellers.
Furthermore, businesses buy enterprise licences in bulk for groups of users. Most enterprise app producers don’t offer enterprise-style bulk purchasing capability within app store environments and lack the accompanying terms and conditions of how they can be used within the enterprise. Also, there is no mechanism, to allow organisations to purchase 200 copies of the app and then have it directly delivered to 200 unique users in the organisation.
In addition, most enterprise apps are based on the perpetual licensing model -- i.e. users have perpetual or unlimited use of the solution, they automatically receive all the newer versions of the app free of charge and do not have to purchase maintenance along with the product. With apps already being very competitively/even cheaply priced, there is no method by which the app can be monetised, customised or the distribution tailored to meet the varying needs of end users and enterprises.
App producers though now are recognising these issues and are actively exploring ways to rectify them in order to ensure their apps successfully can be distributed via app stores in B2B scenarios.
Imperatives to make applications app store-ready
With the 'Consumerisation of IT', users are increasingly expecting the same iTune-like experience for their enterprise software, even though the consumer environment is completely different to that of business. To make their applications app store-ready, there are a few approaches that you can adopt to increase your value to an app store deployment.
Flexible and targeted licensing and pricing models
In order to maximise revenue, software producers need to think of creative ways to package, price and licence software to make it easy for enterprise customers to consume (and pay for) more software. While Enterprise App Stores don’t have the price pressure of B2C app stores, there are still a few considerations to provide more flexible access to your software to increase adoption:
o Software producers need to make considerations for time-based or consumptive licence models that make it easy for an enterprise and their users to use just the software they need, when they need it. This may mean offering a subscription licence model for some software, or, allowing the harvesting and re-allocation of under-utilised software. With more flexible and affordable access to software, users can then begin to use software that they may not have previously considered using, and find creative ways to use this software in their business process flows to increase productivity. In some ways, an app store is the ideal Enterprise Licence Agreement -- it allows unencumbered access to a large portfolio of your software.
o Software should be re-partitioned from monolithic applications to more targeted applications to make the software easier to understand, install, and use. For example, if there was an “Excel for Accountants” vs an “Excel for Product Managers”. Neither edition may be full function, but it can be targeted and optimised for specific use.
Easy application installation
Similar to consumer app stores, users expect a click and play type installation function. Lengthy installation and start-up processes can be off-putting and even discourage purchase. Applications must be designed to “install and go” requiring minimal user interaction. In addition, licensing and licence tracking technology must be incorporated into the application’s installation and start-up process for ease of use.
To keep consumers loyal and to reduce the cost of deployment, app stores deploy facilities to effectively push out updates to their store customers, informing them when new updates are available and allowing the customer to download when convenient. It is seen as a valuable service by both app stores and their customers. Similarly, B2B application producers must make regular application updates a key offer – it also ensures that the product is regularly improved and remains competitive in the marketplace.
Leverage social media
Deploy applications so that you can easily take advantage of social media communities for users to share best practices and provide support. An app store is about empowering users, so connecting to a local or shared community (or a shared Facebook page), allows you to leverage the value of all of your customer’s experiences. Furthermore, you can gather valuable feedback on product performance and functionality to improve subsequent releases.
Currently, most enterprise app producers manage packaging, licensing and entitlement management manually -- or worse, they do not manage this process at all. This adds undue burden, complexity and inefficiency to building out and maintaining a family of enterprise apps, and greatly limits their ability to take advantage of the app store trend. App producers for the enterprise must build nimble product packaging, licensing and entitlement management systems into their products. Embedding and automating licensing and provisioning strategies into their applications from the outset will ensure that their software is app store ready.
Cris Wendt is principal consultant at Flexera Software.