AppExchange ISV 1st Call Pitch

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AppExchange Partner Program Terms Overview

May 22, 2007
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Safe Harbor Statement
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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,
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or upgraded services or technology developments,
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Developing The Next Generation Of Salesforce.coms
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The Circle of On-Demand Success
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Growing the AppExchange in 2007Platform
Go-to-Market Breakthroughs
2006
AppExchange 1.0 CRM-centric Apps Early US SMB
Adopters Smaller ISV Partners Ad-hoc Partnerships
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Fueling Partner Success in 2007Fully Integrating
Partners to the Ecosystem
29,000 Customers
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Different Ways to Achieve Same Goal Join the
Ecosystem to Leverage Economies of Scale
DIY
AppExchange
?
Immediate Access to Largest Global Market of
On-Demand Customers
?
Leverage Proven Marketing Methods
What would be your cost?
?
Faster Sales Cycles
?
Level Playing field based on Customer Success
?
Immediate On-Demand Credibility (Customers, VC,
etc.)
?
Low-cost/High Quality Lead Generation
?
Ongoing Technology Guidance Support
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What a Difference a Year MakesUnique programs to
drive demand to your apps
This Year
Last Year
?
N/A
Dedicated Category Leader
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N/A
Sales Education Roadshows
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N/A
Top Partner Matrix eligibility for SFDC Sales
teams
?
Targeted Email Marketing Webinars to SFDC
Customer base
N/A
?
N/A
Access to Pre-Release Apps
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N/A
Success Story Participation
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Partner Program Levels EligibilityDemocratizing
ISV Success
AppExchange Basic AppExchange Standard AppExchange Premium1
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 ELIGIBILITY ELIGIBILITY ELIGIBILITY
Customer Deployments 0 0 100 Corporate or 10 Field
Customer Ratings 0 0 3.8 of 5 (Min 20 ratings)
Customer Interviews 0 0 3

1. Scheduled availability in Q3 CY07

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Partner Program Benefits Programs Tools for
Developer/ISV Success
BASIC STANDARD PREMIUM
BUSINESS TECHNICAL SUPPORT BUSINESS TECHNICAL SUPPORT BUSINESS TECHNICAL SUPPORT BUSINESS TECHNICAL SUPPORT
Business Planning Acct Mgt Initial Review by PSM Annual Review by PSM Quarterly Review by PSM or Category Leader
Developer Edition API Access ? ? ?
Application Design ADN Review TAC Named TAC PM
GO-TO-MARKET PROGRAMS GO-TO-MARKET PROGRAMS GO-TO-MARKET PROGRAMS GO-TO-MARKET PROGRAMS
AppExchange.com leads ? ? ?
Event marketing eligibility ? ? ?
Sponsored category listing ? ?
Preferred directory placement ? ?
Incubator eligibility ? ?
Joint PR activities ? ?
Targeted demand generation ? ?
Salesforce.com Awareness ? ?
Salesforce.com Engagement ?
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Partner Program Requirements Aligned for Partner
Success
BASIC STANDARD PREMIUM
Partner Referral Fee1 0 10 252
Annual Application Certification Required Required Required
AppLabs Training Seats 0 1 2
Developer Support Packs Required Required
Annual Min MDF Commitment3 0 20K 50K
Salesforce.com Lead Referrals per Year 0 3 Corporate or 1 Field 6 Corporate or 2 Field

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
   salesforce.com events and sponsorship activities
   per calendar year

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Complete Set of Programs for ISV
SuccessPay-for-Performance Referral Fee Model
Partner Program Level First-Year Revenue1 First-Year Ongoing Revenue
Basic 0
Standard (Available Now) 10
Premium2 (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.

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

• Only Standard Partners apply
• Must meet unique Category Leader criteria by
  segment

EXAMPLE ONLY
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Marketing Opportunities for Standard Partners

• Preferred AppExchange.com placement for standard
  partner applications
• Targeted email 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
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WHAT deals do I pay Referral Fees on?Standard
Partner Program began 2/1/2007
Includes any deals referred pre-agreement date
Pay on any referred deals closing after Effective
Date
Agreement Effective Date
REFERRAL
REFERRAL FEE

• Any deal(s) or prospects originated from
  Salesforce.com via the AppExchange, campaign,
  event, sales referral or any employee. Referrals
  effective for 12 months.

of Annual Contract Value of any referred
opportunity for 12 months beginning with 1st
customer purchase.
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WHAT ISNT a Referral?No referral if oppty is
already in your pipeline within past 60 days
Partner cold calls customer contact establishes
pipeline oppty
Customer visits AppExchange.com and submits lead
info
Customer makes purchase
NO REFERRAL FEE
April 1
March 1
April 25
Customer contact attends partner webinar. No
oppty.
Customer makes purchase
Customer visits AppExchange.com submits lead
info
TRIGGERS REFERRAL FEE
June 15
March 1
July 1
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HOW long are Referrals active?Referrals can
become live opportunities for 12 months
February 1, 2006
January 31, 2007
Referral is LIVE for 12 months
If customer purchases on.
REFERRAL
January 15, 2007 FEE APPLIES

• Any deal(s) or prospects passed from
  Salesforce.com via the AppExchange, campaign,
  event, sales referral or any employee. Referrals
  effective for 12 months.

February 15, 2007 NO FEE
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HOW do Referrals become Customers?
1ST Customer Purchase from referral triggers
live Opportunity
Date of 1st Referred Customer Purchase
Referral with past 12 months
Customer Opportunity is now live for 12 months
Referral fee applies during this period
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Scenario 1Customer signs to one year contract

• 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
Customer Signs Contract for 1 year and pays you
120
Pay 12 to SFDC (Net 45)
End of Quarter
Feb 1
March 31
May 15
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Scenario 2Customer signs to one Year contract
w/ Monthly payments

• 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
Customer Signs Contract for 1 year and pays you
10 (for Feb)
Pay 12 to SFDC (Net 45) for total ACV
Customer pays you 10
Customer pays you 10
Customer pays you 10
Feb 1
March 31
April 30
May 15
May 31
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Scenario 3Customer signs to one Quarter
contract w/ Quarterly Payments

• 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.

Customer Signs new contract for One year starting
Q3 and pays you 120
Customer Signs new contract for Q2 and pays you
30
Customer Signs contract for Q1 and pays you 30
Pay 3 to SFDC (Net 45) for total Q1 ACV
Pay 3 to SFDC (Net 45) for total Q2 ACV
Pay 6 to SFDC (Net 45) for total Q3 ACV
Q1
Q2
Q1 45
Q2 45
Q3
Q3 45
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Scenario 4Pay as you go

• The application uses a pay as you go model for
  example an email marketing application where you
  pay per email 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

Pay 7 to SFDC (Net 45) for total Q3 ACV
Pay 3 to SFDC (Net 45) for total Q1 ACV
Pay 5 to SFDC (Net 45) for total Q2 ACV
Customer pays you 30 for application
Customer pays you 70 for Application
Customer pays you 50 for Application
Q2 45
Q2
Q2 45
Q3
Q3 45
Q1
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WHAT about renewals within 1st 12 months?Pay
referral fee up until 12 months for new customer
renewals
REFERRAL FEES APPLY DURING 12 MON PERIOD
New Deal
Renewal
Renewal Deal
February 1, 2006
January 31, 2007
Opportunity is LIVE for 12 months from 1st
purchase
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WHAT about add-on deals for new referred
customers?Only on NEW and ADD-ON business during
12 month period
REFERRAL FEES APPLY DURING 12 MON PERIOD
Add-on Deal (Up-sell/Cross-sell)
New Deal
Prof Svc Deal
Renewal Deal
February 1, 2006
January 31, 2007
Opportunity is LIVE for 12 months from 1st
purchase
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WHAT about referred add-on at existing
customers?Only on business sourced by
salesforce.com
Sign Partner Agreement
Add-on Deal (Salesforce.com Sourced)
Existing Customer
Add-on Deal (You Source)
Add-on Deal (You Source)
Feb 1, 1995
Mar 31 , 2008
Apr 1, 2007
REFERRAL FEES APPLY DURING 12 MON PERIOD
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WHAT if I OEM/Resell another product?Pay only on
your gross margin for OEM products
1,000
Total Revenue from Customer
600
OEM Royalty Cost
400
Gross Margin on OEM
Pay Referral Fee on this
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Do I pay fees on multi-year contracts?Pay only
on 1st Year Contract Value
Pay Referral Fee only on 1st Year Revenue
2-year Contract
March 1, 2008
March 1, 2006
March 1, 2007
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WHEN do I pay referral fees?Pay only on deals
closed during the quarter
Referral fees due (Net 45)
End of Quarter
Referred Deal X closes 3/1
Referred Deal Y closes 3/15
March 15
Feb 15
May 15
March 31
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What if a Customer cancels?Credit back pro-rated
fee against future fee payments
Customer X contract expires 12/31
1-Year Referred Deal X closes 1/1
Customer X cancels 6/30
June 30
Dec 31
Jan 1
Credit Referral Fee for post-cancellation period
against other fee payments in future quarters
Pay Referral Fee for pre-cancellation period
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WHEN do I pay Referral Fees?Self-generated
Quarterly reports Payments
Calendar Quarter Customer Purchase Date Payment Due Date to Salesforce.com
Q1 February 1 March 31 May 15, 2007
Q2 April 1 June 30 August 14, 2007
Q3 July 1 September 30 November 14, 2007
Q4 October 1 December 31 February 14, 2008
Send referral report (download report off the
AppExchange) with payment to AppExchange_Operation
s_at_salesforce.com. Report and payment is due 45
days after the calendar quarter end.
Payment Methods accepted Credit Card or Wire
Transfer
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COMPARING EBAY APPEXCHANGE 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