Are Business App Stores Gaining Steam with Small Businesses?

I’ve been reviewing data from our latest survey, the 2011 SMB Routes to Market Study, which zeros in on how SMBs discover, learn about, evaluate and purchase software and service technology solutions.

This study was a refresh of our 2010 SMB Routes to Market Study. In both years, we asked customers, “Do you use/plan to use business app stores or marketplaces (e.g. Salesforce AppExchange, Intuit Workplace, etc.)?” As shown below (Figure 1), 28% of small businesses are using app stores. The good news is that this is up from 23% last year.

Figure 1: Small Business Use and Plans: Business App Stores and Marketplaces

This year, we also asked respondents how frequently they use app stores. As you can see, only 6% of small businesses use them on a regular basis–which pales in comparison to the 42% that use search engines regularly–and also falls far short compared to sources such as email newsletters; colleagues, friends and family; vendor web sites, and Facebook–among other things.

In this 2011 survey, 17% medium businesses (100-999 employees) indicated that they use app stores on a regular basis, which may mean that as businesses get larger, and their integration requirements increase, app stores provide more value.

Source: SMB Group 2011 (click to enlarge)

App stores focused on the needs of small and medium businesses (SMBs) have been proliferating quickly. Some of the SMB-focused app stores that have set up shop include:

  • Intuit’s Workplace App Center, which provides a central location where small businesses can locate and try business applications that work with QuickBooks and with each other.
  • Google Apps Marketplace, which offers Google users apps that integrate directly with Google Apps.
  • Zoho’s Marketplace, which provides applications that work with Zoho’s solutions.
  • Constant Contact Marketplace, which offers small businesses with applications that integrate with Constant Contact’s email and marketing tools.
  • GetApp.com, which, unlike most app marketplaces, isn’t organized around a core application or platform, but positions itself as a neutral, “meta-marketplace” that is application and platform agnostic.

There are also many business app stores that aren’t exclusively focused on SMBs, but feature plenty of apps relevant to SMB requirements, such Salesforce.com’s AppExchange and Sugar CRM’s SugarExchange

Theoretically, these sites should make it easier for users to find, try, evaluate and purchase applications. But our study analysis suggests that app stores will need to do more to live up to their promise of becoming a premier and potentially disruptive SMB information and purchase channel.

5 Responses

  1. As small businesses move more of their operations to the cloud, the need for a simplified experience for those businesses to find solutions that not only meet their needs, but work in an integrated fashion with their existing applications is paramount. It will be interesting to see how their evaluation process evolves. Dont forget about mobile, and how that plays into this..

    (Thanks for including us!)

    • Thanks for reading and your comment! Yes, I agree that they can play a big role in helping small businesses both navigate and integrate solutions over time, but the marketplaces will need to improve these and other services.

      • Do you believe that awareness is the main issue or do you think there are key pieces of functionality / CONTENT missing in the marketplaces?

      • Thanks for reading and your question. I think both issues are in play. Many small businesses are still unaware of business app marketplaces and/or don’t understand how they can provide value. Along with that, it seems that something is still missing for users that ARE aware and using these sites–but not as frequently as I would have expected. Why are they reverting to search engines–a great research question!

  2. [...] Salesforces New AppExchange Features Some Cool Tools for Field ServiceKey Themes from SAP TechEd 2011–How Do They Relate to SMBs [...]

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