Opening a new front in the cloud platform wars, cash-to-quote automation vendor Apttus, which has built its suite of enterprise software as native Salesforce applications, today launches a new version of its applications which it has also ported to Microsoft’s Azure cloud platform.
Showcased today in the opening keynote of Envision, Microsoft’s premier event for its business application customers, the announcement is a big coup for Microsoft, marking its first serious challenge on Salesforce’s home turf as a cloud application platform.
Microsoft Azure has previously competed largely in the infrastructure-as-a-service (IaaS) market against Amazon Web Services (AWS) and Google Cloud Platform. As a cloud application development platform, it appeals largely to developers who already use Microsoft’s .NET environment. Apttus becomes the first major Salesforce-native ISV to port its apps to the Microsoft cloud.
The move is a unique exercise in co-opetition — the technology industry’s term for when vendors both compete and co-operate — since Apttus remains a leading light in the Salesforce ecosystem, sharing north of 500 enterprise customers with the cloud CRM giant, and has just renewed its Salesforce OEM agreement through 2023. Salesforce is also an investor in Apttus and has itself been building a close partnership with Microsoft, whose CEO Satya Nadella delivered a keynote session at last year’s Dreamforce conference.
Apttus will continue to partner closely with Salesforce, its CEO Kirk Krappe told me in a phone briefing on Friday, at the same time as now pursuing a new Microsoft customer base that Salesforce cannot reach:
There are many customers, especially in Europe, that have no Salesforce presence and that really need quote-to-cash.
It’s a marketplace that’s sitting there that’s unaddressed. For us it’s a different scenario [than the Salesforce market].
He said that having grown past $100 million in annual revenue, it no longer made sense for the company to be limited to a single cloud platform.
We are now at a scale where we need a multiplatform strategy.
Being tied to the Salesforce platform is also an issue that investors have been asking about as the company prepares for a public listing, he added.
We’re gettig ready to IPO and the question always comes up. No one’s being critical of it, but it comes up.
Rebuilt for Azure
The Microsoft launch means Apttus now operates two functionally identical versions of its application suite, one running on the Salesforce platform, the other on Azure. Krappe told me that Apttus has spent the past 18 months carefully rebuilding its application to run on Azure, using elements of Dynamics functionality — Microsoft’s business product that directly competes with the Salesforce Sales Cloud — as well as components from Azure.
Although it’s been a significant project, it has been much less work than it was to build the application the first time round, says Krappe:
It’s very easy to abstract the functionality and the data model and build it on another platform.
Although other Salesforce-native ISVs have built extensions to their products on non-Salesforce platforms, Apttus is the first to have ported its core product to run natively on a competing public cloud platform.
Krappe explained that Apttus initially started working with Microsoft because it wanted to tap Azure’s machine learning capabilities to power new intelligent functionality introduced in today’s release of its application.
The Salesforce platform — which is spectacular for traditional enterprise apps — when it comes to things like computation or algorithm-driven, it hasn’t been designed to do that historically. [That’s why Salesforce] acquired heroku, which is the beginning of having different types of apps.
Porting the full suite
The new ‘Intelligent Cloud’ functionality introduced today is powered by Azure Machine Learning in both the Salesforce and Microsoft platform versions, he added.
We’re not using Salesforce analytics because the level of sophistication we need is not afforded on that platform.
Apttus then took the decision to port its full application suite to Azure.
Subsequently we’ve ported over our CPQ [configure-price-quote], CLM [contract lifecycle management] and e-commerce apps, they run fully native on Azure.
On the Salesforce platform, Apttus is built using a mix of Force.com’s standard software objects along with its own customized objects that also run on the platform. Its user interface is created in AngularJS, which is supported by both Salesforce and Azure. Krappe gave a quick overview of what was involved in recreating its applications on the Microsoft platform.
You take the data model footprint — all the objects you’re using, custom or original — and you can take a software print of that and you can go over to services available on Azure and put that in Azure. Once it’s sitting in Azure you connect the objects.
We take our UI and our data model, we pop it on top of CRM Dynamics and we connect it to our objects.
We use elements of CRM Dynamics and elements of Azure. You do have to do a lot of your own build and a lot of services on Azure.
The new Azure version is an addition to rather than a replacement for the Salesforce version and Krappe said Apttus will continue to stay loyal to Salesforce, stepping away from deals that are directly competitive against its longstanding ally.
There are 44,000 Microsoft Dynamics customers. We just want to make sure we are accessing that revenue stream too. We want to make sure we are getting quote-to-cash revenue out of that.
If Salesforce are going after an account and they need Apttus functionality and they bring us in, they come number one. We are working hundreds of large joint deals with Salesforce.
The goal here is, Microsoft has many large customers that are not even contemplating Salesforce. I think we expand our marketplace tremendously. Where there’s a gray-area overlap, we will stand down where it affects Salesforce.
When in December Salesforce acquired Steelbrick, which offers the same product suite as Apttus but mostly to smaller businesses, one of the immediate questions was, what’s the impact on Apttus? Well, as we now know, Apttus already had an answer up its sleeve that no doubt saved its management a few sleepless nights.
Indeed, it is now clear that management at Salesforce is facing a few sleepless nights of their own.
Make no mistake, this is a seismic event in Salesforce’s partner ecosystem. The conventional wisdom has been that Salesforce-native ISVs are irrevocably locked into its platform. Apttus today has completely exploded that notion, demonstrating that it’s relatively straightforward to replicate a complex application suite from one cloud platform to another.
The move also raises interesting questions about the cloud model now that a pureplay cloud ISV has chosen to run on two different cloud platforms simultaneously. This means it now has to maintain two separate codelines in parallel, adding to its overheads.
Apttus is one of the largest, most successful ISV partners to have built its business natively on the Salesforce platform. Indeed, the way its CEO tells the story, Apttus came up with the idea of building natively on the platform as an ISV even before Salesforce itself did. I’ve never been able to verify that independently, but it’s certainly true it was among the first to do so.
Inevitably therefore today’s news raises the question of when (no longer whether) other leading Salesforce-native ISVs will likewise branch out to other cloud platforms. A prime candidate must be ServiceMax, which now finds itself with Salesforce as a direct competitor after last month’s launch of Field Service Lightning.
No doubt many more are actively considering their options — or if they had not been, they will now.
Image credit - Platform Wars feature image via David Crane; Kirk Krappe portrait via Apttus
Disclosure - Salesforce and ServiceMax are diginomica premier partners at the time of writing.