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What is Apex?

The Apex Platform from salesforce.com is a service that lets companies create, customize, integrate, and share on-demand applications over the Internet - all without needing to purchase or install software. The service is composed of two main parts: the AppExchange directory, an online marketplace for sharing on-demand applications, and the Apex platform on which those applications are developed. With Apex, companies can take advantage of a new, Internet-centric way of building applications that is dramatically simpler and more powerful than the approaches that have preceded it.

Benefits/Advantages 

• As projects are sized and implemented in a priority manner, there is greater flexibility and increased time-to-market as shown in Figure 1.
• Offloading of Infrastructure costs such as Hardware, Tools and other Software as applications can be developed and hosted on the Apex Platform provided by Salesforce.com
• Multi-Tenancy i.e. an application model in which all users and applications share a single, common infrastructure and code base
• Metadata-driven application development model (Apex Builder) that allows applications to be defined as declarative ‘blue prints’, with no code required
• Portability as in Web Services API that provides direct, low-level access to all data stored in the Apex Platform from virtually any programming language and platform
• Capability (Apex OS) to run multiple applications within a single Salesforce deployment that share a common data model, security model, and UI
• An on-demand programming language, Apex, that lets developers create new business logic and behaviors that run entirely on salesforce.com servers
• A directory (AppExchange Directory) where people can share, review, demo and install applications built on the Apex platform

Figure 1

Business Drivers for CRM on the Web

CRM Infrastructure 

• Standardization of a single Salesforce Automation application across all business units
• Adaptability to growing and changing businesses
• Reduce the learning curve of sales associates and professionals
• Leverage and cross-sharing of business unit and overall knowledge

• Improve client management
• Improve call, pipeline, and forecast management
• Improve “team collaboration” on client relationships
• Creation of institutional knowledge of client relationships
• Creation of competitor intelligence

• Consolidate on a single sales process and tool
• Improve Representative/Manager Productivity
• Improve Business Intelligence and reporting capabilities

Uses

Application Creation, Development, and Distribution:

The Apex platform can be used to create entire new on-demand applications, such as a new bug-tracking system or a recruiting management application. In addition, it provides a way for the new applications to be packaged, shared, and even sold via the AppExchange directory.

Integration:

Salesforce is typically used to manage customer-facing processes and information, so users frequently want to connect that customer, sales, and support data with back-office ERP and accounting systems. Meeting integration requirements of this type, such as taking closed opportunities in Salesforce and creating corresponding orders in an Oracle Financials system or sharing customer data between an SAP system and Salesforce, represents another common use of the Apex platform.

Customization:

The Apex platform provides features that make it easy to modify Salesforce applications, to meet unique business requirements. This can range from simple examples, such as adding a new field on a customer lead form to track interest in a specific product, to advanced customizations, such as tracking all of the assets owned by customers or the status of professional service projects.

Future Trends: Is Apex inline?

With budgets restraints and growing demands on IT personnel, many companies are choosing the course of ‘Software As A Service’ (SAAS) as an alternative to expensive software purchases.  Software As A Service (SAAS) is a model of software delivery where the software company provides maintenance, daily technical operation, and support for the software provided to their client. Since Apex is akin to SAAS, the following trends can be applicable to Apex as well: 

• IDC forecasts that worldwide spending on SAAS will reach $10.7 billion by 2009, a compound annual growth rate (CAGR) of 21%. (IDC, Worldwide and U.S. Software as a Service Forecast and Analysis: Adoption of the Alternative Delivery Model Continues #33120, by Amy Konary and Eric Traudt, March 2005).
• SAAS has already reached high levels of penetration in customer relationship management (CRM) software, accounting for 30 percent of the CRM share in the middle market and about 14 percent in the SMB space. (Sanjeev Aggarwal, The Yankee Group)
• Gartner, Inc. predicts that by 2008 more than 50 percent of software purchases will be obtained via SAAS.
• “SAAS empowers business units enabling them to buy, deploy, and run software without IT involvement," says Liz Herbert, an analyst with Forrester Research.
• "There is no doubt that software as a service has become a driving force within the software industry.  Indications are that customer adoption will continue over the next five years and spending will remain on the rise. The software industry must adopt a new frame of reference for value creation. Software as a service delivery is at the forefront of this trend, and adoption will grow as more customers experience software as a service and the offerings mature, becoming more readily accepted and available in the market" (Eric Traudt, Research Analyst, IDC).
• "Its lower risk and can deliver and faster return on investment," Herbert of IDC says. Thinkstrategies' Kaplan agrees: "Packaged applications are difficult to maintain. SAAS costs can be amortized over time as well."
• From the vendor perspective, selling licenses via subscriptions increases the predictability of software revenue and makes it easier to demonstrate future health (Amy Konary, Program Director of Software Pricing, Licensing & Delivery, IDC).
• Customers like the low up-front costs of the subscription model, as well as the enhanced ability to build an ongoing relationship with the software provider that they pay on an ongoing basis (Amy Konary, Program Director of Software Pricing, Licensing & Delivery, IDC).

 This clearly shows that Apex is clearly inline with the business trends.

Concerns: 

• SLA: “Software houses are increasingly offering their products as an on-demand service with full support rather than simply as boxed products. But the very different nature of the delivery of software has significant legal implications”, says the US-based Software & Information Industry Association (SSIA). Salesforce.com will need to come up with Service Level Agreements and set realistic expectations for their customers.
• Security: “With the tremendous development in application security over the past couple of years I have no problem putting my credit card information online, and I have no problem having my data stored in Salesforce", says Richard Gonzales, an executive with Pegasus Solutions in Dallas. But still, I personally think data security and IP related issues could be causes for concern in the minds of the customers.
• Infrastructure: It's interesting that customers had no hesitation with the concept of hosting their development environment on Salesforce.com's infrastructure, despite the well published downtime troubles Salesforce ran into in 2005. "They haven't had any problems since the system instability and really, out of sight out of mind. It may prove to be shortsighted —certainly there is an element of risk [hosting development with Salesforce] … With Apex we sort of have to accept that risk of performance and reliability. But what you get is an increased level of access to data and to logic", says John Caine, director of technology strategy at The Phoenix Companies in Hartford, Conn., who was a Salesforce customer during 2005 and has witnessed a spate of outages.
• Scalability: With a growing need for server space, and other on-demand usage of the Apex platform, Salesforce will need to invest a lot to be scalable to host and run applications.
• Maintenance: Ease of Customization, Upgradation, and Maintenance of applications developed on Apex is yet to be proved and a whole lot of future business would depend on these key aspects.
• Integration: Ease of integrating various applications, testing and running them parallely will also be of crucial importance to the success of Apex. 
• Versatility: The caveat in Apex is that Apex development will remain within the confines of the CRM realm, at least for now. SAAS competitor NetSuite Inc has had a clear advantage as the only vendor to support ERP transactions in an on-demand environment.

Wrap Up:

The Apex programming facility opens up new avenues for Salesforce.com. It adds a crucial component to the Salesforce.com infrastructure enabling it to be viewed more seriously as a platform into which different types of applications can be plugged. It also opens up the way for transactional applications and for vertical applications, most of which will be provided by partners. Salesforce CEO Marc Benioff is quoted as saying he wants the killer application on the Salesforce platform to come from outside the company. The underlying business model is simple: each time a customer buys into the expanding range of available applications, it also generates subscription revenue for Salesforce.com.

The new capabilities enabled through Apex programming are also designed to increase Salesforce.com's appeal to large enterprises even though the company says it has a lot of traction in the enterprise market today and has a business model based on an even split between SMEs and large enterprises.  

Time will tell just how successful this platform for on-demand application development model will be and many newcomers are to be expected as this market grows. Hence, from the business perspective, Apex is very much in the game and might very well be a hot-cake for and from Salesforce.com!!

I believe Apex could have an impact in attracting new customers and making existing customers more loyal. 

Most enterprises require on-demand pluggable solutions that offer incremental pricing models so that the business pays only when it needs the features. Salesforce AppExchange already serves this to a large degree.

Apex will not serve this to a more fine-grained level - by opening up on-demand triggers, and actions to play on the applications themselves, it allows for a greater degree of customization and flexibility.

One of the important areas where I would use this is in bridging salesforce with my inhouse systems, provided that Apex provides a web-services API as well.

I may not rely on hosted data management, so I might invest in a data backup system on my site, and write a  script to integrate my backup system with Salesforce.

I might like the basic CRM of salesforce, but may have a much better proposal management system in-house. Apex can let me control the integration to a fine degree.

However that said, the success or failure of this move is not because of the technology, but lies in the common challenges of implementing IT solutions. That is, you will need to find a solution for IT and Business alignment -- on the one hand you need highly technical people to be able to implement something on Apex, and on the other you need business analysts to describe how the system should behave. 

The cost of implementing a solution on Apex may be high as a result, and thus the justification may not exist to implement the small amount of extra customization.

The solution to this will depend on how to Apex community evolves.

Maybe a slew of add-ons or "on-demand functionality" will emerge in the communities, allowing business users to simply plug and play it into their systems

Perhaps a "business user interface" for building applications could emerge, such as the one offered by Yahoo! Pipes, or IBM's Mashup technology.

Conclusion

Whether or not Apex is a compelling offering will thus be determined by the total cost of implementing Apex additions, and that is something we will find out by the community's response.