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May 22, 2007 AppExchange Partner Program Terms Overview.

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Presentation on theme: "May 22, 2007 AppExchange Partner Program Terms Overview."— Presentation transcript:

1 May 22, 2007 AppExchange Partner Program Terms Overview

2 2 Safe Harbor Statement Safe harbor statement under the Private Securities Litigation Reform Act of 1995: This presentation and the oral remarks that accompany it contain forward-looking statements the achievement of which involves risks, uncertainties and assumptions. If any such risks or uncertainties materialize or if any of the assumptions proves incorrect, our results could differ materially from the results expressed or implied by the forward-looking statements we make. All statements other than statements of historical fact could be deemed forward-looking, including any statements concerning new, planned or upgraded services or technology developments, any projections of subscriber growth, earnings, revenues or other financial items and any statements regarding strategies or plans of management for future operations, statements of belief and statements about future customer contracts or future customer use of our services. The risks and uncertainties referred to above include - but are not limited to - interruptions or delays in our service or our Web hosting; our ability to complete and successfully release new and improved versions of our on-demand platform and development environment; our new business model; problems integrating, launching or operating services based on newly acquired businesses or technologies, breach of our security measures; possible fluctuations in our operating results and rate of growth; the emerging market in which we operate; our relatively limited operating history; our ability to hire, retain and motivate our employees and manage our growth; competition; our ability to continue to release and gain customer acceptance of new and improved versions of our CRM service; unanticipated changes in our effective tax rate; fluctuations in the number of shares outstanding; the price of such shares; foreign currency exchange rates and interest rates. Further information on these and other factors that could affect our financial results is included in the reports on Forms 10-K, 10-Q and 8-K and in other filings we make with the Securities and Exchange Commission from time to time, including our Form 10-Q for the fiscal quarter ended April 30, These documents are available on the SEC Filings section of the Investor Information section of our website at Any unreleased services or features referenced in this or other press releases or public statements are not currently available and may not be delivered on time or at all. Customers who purchase our services should make purchase decisions based upon features that are currently available., inc. assumes no obligation and does not intend to update these forward-looking statements, except as required by law.

3 3 Developing The Next Generation Of Salesforce.coms

4 4 4 The Circle of On-Demand Success

5 5 Growing the AppExchange in 2007 Platform & Go-to-Market Breakthroughs 2006 AppExchange 1.0 CRM-centric Apps Early US SMB Adopters Smaller ISV Partners Ad-hoc Partnerships Apex & AppStore Verticals & Beyond CRM Apps Global Enterprise Adoption Full ISV Spectrum Formal Partner Programs 2007

6 6 Fueling Partner Success in 2007 Fully Integrating Partners to the Ecosystem Awareness & Education Joint Sales & Go-to-Market Partners Targeted Demand Generation General Marketing 29,000+ Customers

7 7 Different Ways to Achieve Same Goal Join the Ecosystem to Leverage Economies of Scale Immediate Access to Largest Global Market of On-Demand Customers Ongoing Technology Guidance & Support Level Playing field based on Customer Success Leverage Proven Marketing Methods Low-cost/High Quality Lead Generation AppExchange DIY Faster Sales Cycles What would be your cost? Immediate On-Demand Credibility (Customers, VC, etc.)

8 8 What a Difference a Year Makes Unique programs to drive demand to your apps Dedicated Category Leader Success Story Participation Targeted Marketing & Webinars to SFDC Customer base Sales Education Roadshows Top Partner Matrix eligibility for SFDC Sales teams Access to Pre-Release Apps This YearLast Year N/A

9 9 AppExchange Basic AppExchange Standard AppExchange Premium 1 Basic set of services to get started on the AppExchange Enhanced services to grow your business on the AppExchange Full suite of programs and tools to support an on-demand business on the AppExchange ELIGIBILITY Customer Deployments Corporate or 10 Field Customer Ratings of 5 (Min 20 ratings) Customer Interviews003 Partner Program Levels & Eligibility Democratizing ISV Success 1.Scheduled availability in Q3 CY07

10 10 BASICSTANDARDPREMIUM BUSINESS & TECHNICAL SUPPORT Business Planning & Acct MgtInitial Review by PSMAnnual Review by PSM Quarterly Review by PSM or Category Leader Developer Edition & API Access Application DesignADN + ReviewTACNamed TAC + PM GO-TO-MARKET PROGRAMS leads Event marketing eligibility Sponsored category listing Preferred directory placement Incubator eligibility Joint PR activities Targeted demand generation Awareness Engagement Partner Program Benefits Programs & Tools for Developer/ISV Success

11 11 BASICSTANDARDPREMIUM Partner Referral Fee 1 0%10%25% 2 Annual Application CertificationRequired AppLabs Training Seats012 Developer Support Packs$Required Annual Min MDF Commitment 3 $0$20K$50K Lead Referrals per Year 03 Corporate or 1 Field6 Corporate or 2 Field Partner Program Requirements Aligned for Partner Success 1)Referral fee % applies to annual committed net revenue for all transactions that occur within 12 months of customer acquisition. 2)Premium Partners must meet certain eligibility requirements including but not limited to minimum number of successful customer deployments. 3)Annual Market Development Funds (MDF) consist of events and sponsorship activities per calendar year

12 12 Complete Set of Programs for ISV Success Pay-for-Performance Referral Fee Model Partner Program Level % First-Year Revenue 1 % First-Year & Ongoing Revenue Basic0% Standard (Available Now) 10% Premium 2 (Scheduled availability in Q3 CY07) 25% Optional Add-On Services AppStore Checkout (Scheduled availability in Q4 CY07) Orders, Renewals, Invoicing, Collection, Analysis 20% 1)Referral fee % applies to annual contract value for all transactions that occur within 12 months of customer acquisition. 2)Premium Partners must meet certain eligibility requirements including but not limited to minimum number of successful customer deployments.

13 13 Introducing AppExchange Category Leaders Connecting customers and employees with the right app & partner Judy Loehr Sales & Marketing Matt Panning SSS & PSA Darren Cunningham Analytics & Data Management Jeff Yoshimura Financial Svcs & Verticals Steve White GEM Accts & Field Raghu Gnanasekaran Beyond CRM

14 14 Introducing the AppExchange Partner Matrix Only Standard Partners apply Must meet unique Category Leader criteria by segment EXAMPLE ONLY

15 15 Marketing Opportunities for Standard Partners* Preferred placement for standard partner applications Targeted marketing campaigns and webinars –6 partner-focused webinars planned for Q2 Main stage participation at Salesforce events –Of course, it must be a great app! * Timing and scope still being determined

16 16 WHAT deals do I pay Referral Fees on? Standard Partner Program began 2/1/2007 Any deal(s) or prospects originated from via the AppExchange, campaign, event, sales referral or any employee. Referrals effective for 12 months. Agreement Effective Date Includes any deals referred pre-agreement date % of Annual Contract Value of any referred opportunity for 12 months beginning with 1 st customer purchase. Pay on any referred deals closing after Effective Date REFERRAL REFERRAL FEE

17 17 WHAT ISNT a Referral? No referral if oppty is already in your pipeline within past 60 days March 1 Partner cold calls customer contact & establishes pipeline oppty April 1 Customer visits and submits lead info April 25 Customer makes purchase March 1 Customer contact attends partner webinar. No oppty. June 15 Customer visits & submits lead info July 1 Customer makes purchase TRIGGERS REFERRAL FEE NO REFERRAL FEE

18 18 HOW long are Referrals active? Referrals can become live opportunities for 12 months Any deal(s) or prospects passed from via the AppExchange, campaign, event, sales referral or any employee. Referrals effective for 12 months. REFERRAL If customer purchases on…. January 15, 2007 – FEE APPLIES February 15, 2007 – NO FEE February 1, 2006January 31, 2007 Referral is LIVE for 12 months

19 19 HOW do Referrals become Customers? Date of 1 st Referred Customer Purchase 1 ST Customer Purchase from referral triggers live Opportunity Referral with past 12 months Customer Opportunity is now live for 12 months – Referral fee applies during this period

20 20 Scenario 1: Customer signs to one year contract Feb 1 Customer Signs Contract for 1 year and pays you $120 March 31May 15 Pay $12 to SFDC (Net 45) End of Quarter In this example the Customer signs a one year contract and you are paid up front for the entire year- a total of $120 You are responsible only for one $12 payment to SFDC for the quarter the contract was signed $120 paid up front * 10% referral= $12

21 21 Scenario 2: Customer signs to one Year contract w/ Monthly payments Feb 1 Customer Signs Contract for 1 year and pays you $10 (for Feb) March 31April 30 Pay $12 to SFDC (Net 45) for total ACV Customer pays you $10 Your customer signs a ONE YEAR Contract and agrees to pay you on a monthly basis The contract is still for a one year term and you will pay SFDC only one payment of $12 for the Quarter the deal was closed $10 per month= $120 * 10% = $12 May 15 Customer pays you $10 May 31

22 22 Scenario 3: Customer signs to one Quarter contract w/ Quarterly Payments Q1 Customer Signs contract for Q1 and pays you $30 Q2 Customer Signs new contract for One year starting Q3 and pays you $120 Pay $3 to SFDC (Net 45) for total Q1 ACV The customer initially signs a contract for a term of one quarter. They then extend your service for another quarter and finally renew for an entire year. The opportunity is alive for one year after signing the initial contract. This means that any renewal contracts are paid in the quarter they are renewed. The payment is always attributed to the quarter the contract is signed. In this example, the contract is renewed for one year but the opportunity is only alive for 6 more months. You would pay SFDC only half of the contract value for the six months remaining in the live opportunity. Q Customer Signs new contract for Q2 and pays you $30 Pay $3 to SFDC (Net 45) for total Q2 ACV Q2 + 45Q3Q Pay $6 to SFDC (Net 45) for total Q3 ACV

23 23 Scenario 4: Pay as you go Q The application uses a pay as you go model for example an marketing application where you pay per sent The customer pays you X per quarter and you pay SFDC 10% of X for that quarter Payments will always be made a quarterly basis for all customers who paid you during that quarter Q2Q2 + 45Q3Q Pay $7 to SFDC (Net 45) for total Q3 ACV Q1 Customer pays you $30 for application Pay $3 to SFDC (Net 45) for total Q1 ACV Customer pays you $50 for Application Pay $5 to SFDC (Net 45) for total Q2 ACV Customer pays you $70 for Application

24 24 WHAT about renewals within 1 st 12 months? Pay referral fee up until 12 months for new customer renewals February 1, 2006 New Deal Renewal Renewal Deal January 31, 2007 Opportunity is LIVE for 12 months from 1 st purchase REFERRAL FEES APPLY DURING 12 MON PERIOD

25 25 WHAT about add-on deals for new referred customers? Only on NEW and ADD-ON business during 12 month period February 1, 2006 New Deal Add-on Deal (Up-sell/Cross-sell) Prof Svc Deal Renewal Deal January 31, 2007 Opportunity is LIVE for 12 months from 1 st purchase REFERRAL FEES APPLY DURING 12 MON PERIOD

26 26 WHAT about referred add-on at existing customers? Only on business sourced by Feb 1, 1995 Existing Customer Add-on Deal ( Sourced) Add-on Deal (You Source) Mar 31, 2008 REFERRAL FEES APPLY DURING 12 MON PERIOD Apr 1, 2007 Sign Partner Agreement Add-on Deal (You Source)

27 27 WHAT if I OEM/Resell another product? Pay only on your gross margin for OEM products $1,000 OEM Royalty Cost $600 Total Revenue from Customer $400 Gross Margin on OEM Pay Referral Fee on this

28 28 Do I pay fees on multi-year contracts? Pay only on 1 st Year Contract Value March 1, 2006March 1, 2007 March 1, 2008 Pay Referral Fee only on 1st Year Revenue 2-year Contract

29 29 WHEN do I pay referral fees? Pay only on deals closed during the quarter Feb 15 Referred Deal X closes 3/1 March 15 May 15 Referral fees due (Net 45) Referred Deal Y closes 3/15 March 31 End of Quarter

30 30 What if a Customer cancels? Credit back pro-rated fee against future fee payments Jan 1 1-Year Referred Deal X closes 1/1 June 30 Customer X cancels 6/30 Pay Referral Fee for pre-cancellation period Dec 31 Customer X contract expires 12/31 Credit Referral Fee for post- cancellation period against other fee payments in future quarters

31 31 WHEN do I pay Referral Fees? Self-generated Quarterly reports & Payments Calendar Quarter Customer Purchase Date Payment Due Date to Q1 February 1 – March 31May 15, 2007 Q2 April 1 – June 30August 14, 2007 Q3 July 1 – September 30November 14, 2007 Q4 October 1 – December 31February 14, 2008 Send referral report (download report off the AppExchange) with payment to Report and payment is due 45 days after the calendar quarter end. Payment Methods accepted: Credit Card or Wire Transfer

32 32 COMPARING EBAY & APPEXCHANGE eBay AppExchange Initial Listing Fee Certification Fee Transaction Fee Upon Close Referral Fee Upon Close Ad Format Fees Sponsoring Marketing Events SEM/Affiliate Advertising Fees Sponsoring Sales Awareness/Education Listing Upgrade Fees AppExchange Sponsored Listing Picture Services Fees Premium Listing Seller Tools monthly Fees Developer Support Packs eBay Store monthly fee Premium Partner Tier (25% referral) eBay University Incubator

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