App stores offer business benefits

By Dave Bailey
04 Jun 2009 View Comments
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Man at desk using iPhone
Small and medium-sized businesses are likely to be keen on app stores such as Apple's

Apple’s iPhone App Store is a masterpiece of simplicity, and is proving such a success in the mobile world that rival Nokia launched its competing Ovi App Store last week.

BlackBerry has also followed the trend, and Sun Microsystems recently promised to launch an application store for Java-based content next month.

Browse to the App Store on an iPhone and you can buy, download, and install applications there and then –­ so, given the appeal of that service for consumer mobiles, could a similar concept succeed for broader business applications?

“Looking at the business model, I see no reason why a company couldn’t take this and deliver it as a business-to-business (B2B) service,” said Stephen Prentice, Gartner vice president.

IBM has already advanced along the road of the B2B app store concept, announcing the Smart Cube application server last year.

Although currently available only in the US, Smart Cube can be configured with applications available from IBM’s Smart Market application store, described by the technology giant as “a web-enabled, one-stop marketplace that clients can use to browse, rate and find solutions from independent software vendors. Simple, wizard-like queries guide clients and vendors through available options.”

Combined with the rise of service-oriented architecture; the development of standards-based, componentised software; plus the growth of open source, the question arises as to whether there might be a gap in the market for an online business application store that offers both free and paid-for applications.

If there is such an opportunity, the concept can be taken a step further, with a web site hosted by application providers touting their wares and targeting firms with diverse platforms with a “pay and download” business model.

Gartner’s Prentice said the challenge for application stores targeting businesses would be the range of different platforms.

“The big plus with Apple’s App Store, as opposed to targeting a more generic platform, is the issue of compatibility,” he said.

“You know that everything from the App Store will work – ­ or should do ­ – whereas targeting multiple platforms means there are different operating systems to consider, and maybe even what sort of processor the customer uses.”

Any potential B2B application store would have a number of variables to consider when providing certified business applications.

“When you start getting down to lots of configurations, the model does not break down, but it becomes a little more challenging,” said Prentice.

Thomas Husson, senior analyst at Forrester Research, said small and medium-sized enterprises (SMEs) might be particularly keen on the business app store idea.

“Application stores are a new way to distribute content and services, and because of the blurring of business and consumer offerings, I see no reason why you could not apply this to SMEs,” he said.

Prentice believes it would make even more sense for small firms than for large corporates.

“SMEs do not have the same hang-ups that large businesses have about using consumer-grade technology ­ – although that is changing. But they are likely to be using consumer-type applications, and not likely to be looking at buying a site licence for SAP at a million dollars,” he said.

“It is not that a B2B application store cannot handle big purchases, but if you were going to spend hundreds of thousand of pounds, you would want a name, and a bit of hand-holding as well –­ you would probably want to negotiate a price reduction too.”

According to Prentice, one issue about which potential B2B application store providers need to be clear is that the iPhone App Store is not a huge revenue earner.

“Apple takes its 30 per cent, but the store does not earn it billions of dollars. But even if Apple is not making money out of the distribution channel, its presence is critical to the overall success of the ecosystem,” he said.

But even an ecosystem such as Apple’s, comprising as it does iPhone, iPod, iTunes and App Store, is not mature yet, so there would be much to learn in the business software world.

“Getting that sort of involvement and buzz could be a little more difficult in the drier and less-emotional atmosphere of B2B,” said Prentice.

The business app store – how it might work

Imagine a web site offering firms a range of applications that make up a complete business suite, such as accounting, HR, ERP and CRM. Such a set of tools could be paid for, downloaded, and configurable online, and address multiple hardware platforms and operating systems.

The benefit to IT managers would be that such a suite could be up and running in a fraction of the time normally associated with deploying business-critical applications, and at a lower cost.

Many business software suites are already available in modules, but not currently through an online, downloadable service.

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