
When multiple buyers and sellers engage in transactions within a marketplace, the aggregation of their distinct specializations in supply meets diverse customer demands, establishing efficiencies of scale.
In enterprise software marketplaces, each participating vendor brings essential specialized expertise, functionality, and scalability, crucial for crafting comprehensive solutions for end-users. This collaborative environment is considered more effective than relying on a single monolithic vendor to satisfy all customer requirements.
Prior to the advent of software marketplaces, end users typically purchased software designed for specific industry needs, like ‘healthcare clinic management’ or ‘point of sale terminal systems’, or they might have engaged consultants to develop customized solutions due to the lack of sufficient in-house development capabilities.
Consumer software marketplaces are prominently known, predominantly residing on our smartphones through platforms like the Apple App Store and Google Play, each serving their respective operating system users.
These closed economies impose a 30 percent commission on app developers for every transaction, including purchasing the app or acquiring in-app items like game tokens and add-ons. Developers unwilling to pay this fee are unable to have their apps listed on these platforms.
Publishers are clearly not fond of this setup. Epic Games vs. Apple remains an ongoing legal battle as Fortnite was removed from the App Store for integrating its own payment system. Meanwhile, European Union regulators are considering actions to dismantle such monopolies.
In the enterprise software market, collaboration with application partners is greatly valued, as isolated systems are ineffective. Fostering a developer ecosystem enhances the array of choices available to end customers looking to incorporate new functionalities into their existing systems.
Vendors benefit from exposure to the world’s largest cloud services market at relatively low costs, which can range from 1.5% to 3% based on average sales volume. Even if vendors on the AWS marketplace provide services that compete with AWS’s own offerings, it remains beneficial as AWS continues to dominate in selling more cloud infrastructure services.
Across the pond, the Atlassian Marketplace generated more than $500M in annual sales by 2022 for their partner developers. Because Atlassian didn’t impose an extreme tax, they were able to bring together a strong set of vendors building add-on software specifically customized for their suite of tools such as Jira, Confluence and Bitbucket.
Most enterprise software marketplaces started out as gadget collections. They are not well-planned, arising out of a necessity to provide adapters to the most likely external systems and core systems in play within the end user’s IT environment.
Back in the turn of the century, I designed B2B marketplaces, most of which failed alongside companies like Pets.com in the dot-bomb implosion. Enterprises with tight IT budgets started to expect vendors to include SDKs and integration modules so they could hook up their existing software packages for free.
Salesforce led the way with a marketplace of add-on services to its core CRM platform. Later, we saw the rise of major business process automation, analytics and low-code app design vendors all offering a gadget wall of partner integrations in their own marketplaces.
Even citizen developers began participating, using modular parts from vendors like LEGO, which easily snapped together for integration.
The rise of SaaS and cloud services shifted us towards an API-driven consumption framework, revolutionizing our approach. Now, rather than creating specific integration models for each service, vendors offer an API specification that developers use to build connecting services.
Custom integration widgets were soon replaced by API marketplaces, accompanied by a range of applications for devtest, management, identity, and orchestration to regulate their application.
Open source software also transformed, with communities downloading packages from npm and integrating APIs through tools like SwaggerHub and git repositories. Open source marketplaces emerged, letting developers share innovative solutions that advanced common development practices.
GenAI chatbots and image generators are all the rage today, but AI models are even better at speaking the language of API connections than mastering the complex subtleties of human conversation. AIs can act as integration platforms, allowing even non-technical workers to call on a vast array of services, including other AI models behind their own APIs, with natural language queries.
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