On 9 March 2010, Google opened Google Apps Marketplace (http://www.google.com/enterprise/marketplace/home ), a venue for third-party developers to sell business applications. Google will handle billing, offer single sign-on via OpenID and provide data access via OAuth. In return it will take a 20% cut of ongoing revenue from its partners. Developers will sell applications that function independently, or integrate with, Google Apps services such as e-mail and calendar. About 50 vendors have announced their participation in the program, offering applications in areas such as project management, accounting, CRM and e-discovery.

Google's efforts to build a partner ecosystem for Google Apps follows an increasingly popular model that has proven successful for Apple's iPhone, salesforce.com and Google's own Android mobile operating system. In these cases, the third-party marketplace has increased customer utility and therefore created barriers to exit for the customer.

The marketplace gives Google a head start over Microsoft, IBM, Cisco, SAP and Oracle in the race to build out a third-party ecosystem for cloud business applications. Google's large installed base of Google App users will help it attract partners. Google will also get a revenue share from the third-party add-ins. This will help subsidize the free version of Google Apps, which Google says supports 25 million users and 2 million businesses. A much smaller number — between 1 million and 2 million users — pay to access the Premier Edition of Google Apps.

We believe Google Apps Marketplace will impact only small businesses for the first year. The dozen or so enterprises with over 10,000 seats that rely on Google Apps are likely to restrict users' access to the market to prevent application proliferation. Google will enable administrators to lock down use of the new applications. But in the long term, successful cloud computing platforms will make heavy use of third-party application ecosystems. Enterprises must develop policies that govern the evaluation, deployment and management of add-in applications.

Enterprise customers of cloud applications:

• Create a common process for evaluating, using and maintaining third-party cloud applications.
• Review the range of Google Apps Marketplace applications to get a sense of how third-party add-ons will enhance cloud services.
• Investigate the authentication and data-transfer models of cloud marketplaces, and understand how vendors will provide support and billing, prior to deployment.

• "Vendor Focus: Google's GAPE Is Improving but Still Not Ready for High Growth"— Google still needs to answer enterprise questions about governance and security. By Tom Austin and others
• "Use the SaaS Readiness Assessment Checklist Before Deploying Your SaaS Solution"— Enterprises need to prepare thoroughly before switching to a SaaS offering like Google Apps. By Robert Desisto

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