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How Customers Use Enterprise Cloud Marketplaces

Learn how customer use enterprise cloud marketplaces to respond to new business conditions

May 2023 ©Copyright 2023 S&P Global. All Rights Reserved. Commissioned by How Customers Use Enterprise Cloud Marketplaces To Respond to New Business Conditions Discovery Report

How Customers Use Enterprise Cloud Marketplaces To Respond to New Business Conditions | 2 spglobal.com Introduction Cloud computing has transformed the way organizations manage and deploy business applications. However, the conversion has also created challenges. One of the largest of these is responding to new business conditions promptly. The business climate is constantly changing, and organizations must keep their processes current to remain competitive. Another challenge is protecting the institution’s existing investment in technology. Many organizations invested heavily in their legacy applications over the years and cannot afford to abandon them, so they must find ways to integrate new applications into existing systems without compromising security or disrupting operations. Identifying secure and valuable apps is another challenge facing many organizations. Thousands of cloud-based applications are available, and it can be overwhelming for businesses to determine which are secure, reliable and useful for their industry-specific needs. Finally, identifying certified partners is crucial when deploying applications in the cloud. Organizations must choose partners that can demonstrate a track record of delivering projects on time and within budget. Cloud computing addresses these new challenges through the use of an enterprise cloud marketplace, also sometimes called an app marketplace. An app marketplace is an online platform that allows users to discover, try and purchase various software applications. These marketplaces provide users with a wide range of solutions they can quickly and easily access and start using. In addition to apps, these marketplaces offer access to experts who can provide support and consultation services. Examples of marketplaces are AppExchange by Salesforce, which offers apps and services for businesses to extend their Salesforce experience; Azure Marketplace by Microsoft, which offers various cloud-based apps; and Google Play, which provides a wide range of Android apps for mobile devices. With the help of enterprise cloud marketplace platforms, users can find and install the apps they need without having to search the web or visit multiple websites. This saves customers time and effort in searching for and evaluating options. Additionally, it connects them with vetted experts and consultants who can provide support and guidance in implementing and using specific applications. Our data shows that while most respondents get at least some value from these marketplaces, digital transformation leaders report better results than digital transformation laggards. This finding suggests that customers that are further along in their digital transformation journey will most likely derive value from these marketplaces. In addition, our survey results reflect significant collaboration and communication between partners and customers on enterprise cloud marketplaces. Partners provide customers with technical support, training and consulting services, but they also recommend which apps to buy. Customers provide partners with feedback and suggestions for improving their applications.

How Customers Use Enterprise Cloud Marketplaces To Respond to New Business Conditions | 3 spglobal.com Key benefits Figure 1: Business benefits of using enterprise cloud marketplace Q. Which of the following efficiencies does your organization expect to achieve using the AppExchange? Q. Which of the following statements about the benefits of the AppExchange to customers and employees do you agree or disagree with? Base: All respondents (n=400). Source: S&P Global Market Intelligence and Salesforce custom survey, November 2022. Using enterprise cloud marketplaces, such as the Salesforce AppExchange or the Microsoft AppSource, can offer numerous benefits to businesses looking to improve their operations, grow revenue, reduce expenses, make better decisions and increase customer trust. These enterprise cloud marketplaces offer a variety of pre-built, third-party applications that integrate with existing business software and tools. By leveraging these applications, businesses can add new functionality to their operations more efficiently than through custom development. These enhancements can increase efficiency, improve productivity and reduce costs. Additionally, the availability of data analytics and business intelligence tools in enterprise cloud marketplaces can help businesses make more informed decisions and optimize their operations. Further, the availability of trusted applications in enterprise cloud marketplaces can increase trust and improve customer satisfaction, leading to increased revenue and a better overall customer experience. Improved operations (54%) Increased revenue (48%) Decreased expenses (32%) + – Benefits that businesses expect to achieve Management has more information for decision-making (63%) Greater trust in the apps and consultant (58%) Percentage of those in agreement regarding stated benefits to customers and employees

How Customers Use Enterprise Cloud Marketplaces To Respond to New Business Conditions | 4 spglobal.com Choosing the right offering Our survey found that all respondents want to expand the footprint of their systems to some extent to respond to new business conditions. Among the common reasons are improving the quality of their services, building trust, simplifying their business processes, responding to new customer demands for a better experience and protecting their current investment. However, digital leaders report more reasons for expanding their systems than digital laggards, suggesting that experience plays a significant role in purchases. One example of the difference is in the security reviews provided by marketplaces. Security reviews build trust by authenticating access, checking for malware and validating that an app works as intended. As a result, buyers can purchase new apps with the assurance that they have received third-party vetting. In our survey, 68% of digital leaders say that security reviews offered by app and consulting solution marketplaces are an essential factor in their decision-making process, compared to only 35% of the digitally delayed. Figure 2: Reasons for wanting to add to current systems Q. On a scale of 1 to 10, how important are the reasons that you decided to use the AppExchange? Where 0 = not important and 10 = crucially important. Base: All respondents. Source: S&P Global Market Intelligence and Salesforce custom survey, November 2022. 69% 67% 64% 63% 63% 63% 61% 61% 58% 57% 82% 81% 80% 78% 76% 81% 78% 79% 78% 75% 57% 55% 49% 50% 52% 50% 49% 44% 43% 46% Improving the quality of our services Trust Simplify our business processes Needing to bring to market new products and services more quickly Our decision was driven by the organization’s business needs Respond to new customer demands for better experience Extend our current app investment We have standardized on Salesforce and want to extend it into new areas Time to market Respond quickly to an emergency Total (n=400) Digitally driven (n=102) Digitally delayed (n=151)

How Customers Use Enterprise Cloud Marketplaces To Respond to New Business Conditions | 5 spglobal.com Another reason cited by digital leaders is that it is easier to make a choice when given fewer alternatives. Interestingly, digital leaders are more likely to see the advantage of having other users vet the apps first than the digitally delayed, with 18% of the leaders citing this reason compared to only 15% of the delayed. This finding suggests that digital leaders are more likely to value peer feedback and reviews in their decision-making process. Surprisingly, one reason chosen by more digitally delayed respondents than digital leaders has to do with cost. Just over a third (34%) of the digitally delayed believe that using app and consulting solution marketplaces is cheaper than a custom build, compared to only 26% of digital leaders. This finding highlights the importance of cost for organizations that are just starting their digital transformation journey. According to our survey, digital leaders have more reasons for using app and consulting solution marketplaces than the digitally delayed. Digital leaders prioritize security reviews, prefer fewer alternatives to streamline their decision-making process, and value peer feedback and reviews. Figure 3: Reasons for using app and consulting solution marketplaces Q. What are the reasons you use marketplaces in general? Base: All respondents. Source: S&P Global Market Intelligence and Salesforce custom survey, November 2022. Extending the application architecture is an essential aspect of software development, but it also challenges enterprises and vendors. For enterprises, one of the biggest problems in extending the tech stack is the need for industry-specific business processes. Meanwhile, vendors may find it costly to make enhancements that only a few customers will use, and they often lack industry-specific expertise. However, enterprise cloud marketplaces can provide industry-specific solutions. Examples of industry-specific add-ons across different enterprise cloud marketplaces in financial services include solutions for new account management, portfolio management, account data aggregation, document management, back-office support and client onboarding that are distinct to this industry. In healthcare, common examples include patient management, patient billing, medical practice operations, hospital operations, vendor and supplier contracts, and human resources data management. 54% 49% 43% 34% 33% 32% 17% 56% 68% 51% 44% 26% 31% 18% 49% 35% 41% 28% 34% 33% 15% Easier to research between choices Security checks and trust provided by marketplace Easier to make a choice when given fewer alternatives Recommended by implementation partner Cheaper than custom build Recommended by a peer Other users have vetted the apps first Total (n=400) Digitally driven (n=102) Digitally delayed (n=151)

How Customers Use Enterprise Cloud Marketplaces To Respond to New Business Conditions | 6 spglobal.com Similarly, in manufacturing, marketplaces provide solutions for product management, inventory management, supply chain, order management and partner management. In retail, they provide solutions for store and employee operations, personalized marketing experiences, in-store customer data access, content engagement and post-purchase experience. Moreover, digitally driven organizations use industry-specific apps more than the survey total and more than digitally delayed organizations. Figure 4: Relative use of apps in different industry segments Q. What apps for these financial services business processes have you found on the AppExchange? Q. What apps for these healthcare and life sciences business processes have you found on the AppExchange? Q. What apps for these manufacturing business processes have you found on the AppExchange? Q. What apps for these retail business processes have you found on the AppExchange? Base: All respondents. Source: S&P Global Market Intelligence and Salesforce custom survey, November 2022. Financial services (account data aggregation) (n=55) Healthcare (patient management) (n=42) Manufacturing (supply chain) (n=52) Retail (content engagement) (n=75) Total Digitally driven Digitally delayed 5 1 % 5 7 % 6 5 % 4 7 % 7 0 % 6 0 % 6 8 % 7 3 % 1 9 % 5 5 % 5 0 % 3 9 %

How Customers Use Enterprise Cloud Marketplaces To Respond to New Business Conditions | 7 spglobal.com Respondents report several benefits from using enterprise cloud marketplaces, including improved operations (54%), fewer wasted resources (43%) and better management decision- making (63%). These benefits are likely due to the ease of finding and implementing industry- specific solutions offered by these marketplaces, in addition to reducing the cost and delivery time of custom development. Furthermore, by leveraging the marketplace’s solutions, organizations can respond to new business conditions in a timely manner by gaining immediate access to industry best practices. Figure 5: Number of apps installed Q. How many apps do you/did you have installed from the AppExchange? Base: All respondents (n=400); digitally driven (n=102); digitally delayed (n=151). Source: S&P Global Market Intelligence and Salesforce custom survey, November 2022. 3% 0% 3% 4% 5% 2% 3% 6% 1% 10% 9% 2% 6% 7% 57% 50% 63% 51% 52% 50% 60% 28% 32% 24% 29% 31% 33% 25% 7% 17% 1% 7% 10% 10% 5% Total Digitally driven Digitally delayed Financial services Healthcare & life sciences Manufacturing Retail/commerce Unknown 1 2 – 4 5 – 9 10+

How Customers Use Enterprise Cloud Marketplaces To Respond to New Business Conditions | 8 spglobal.com Finding the right consulting partner Finding the right consulting partner can be daunting for any enterprise and requires significant trust. The challenges associated with finding the right partner are manifold. To begin with, enterprises find it hard to identify qualified and reliable consultants. Additionally, unreliable partners can delay or even kill projects, leading to significant losses for the business. Vendors also face challenges in working with the right partners because they need to maintain a healthy business ecosystem while rewarding their partners’ expertise and helping them expand their business. To overcome these challenges, enterprise cloud marketplaces facilitate customer- partner interaction, allowing customers to find consultants on the exchange while enabling consultants to recommend apps and tools. This process helps build trust between the two parties and ensures the enterprise can find the right consulting partner for its specific needs. Overall, finding the right consulting partner is essential for the success of any enterprise, and leveraging marketplaces can help simplify the process and increase the chances of success. Figure 6: How consultants and customers work together on marketplaces Q. Have you ever looked for an expert, consultant or consulting company on the AppExchange, and if so, how many did you find? Q. Did you buy Salesforce on the recommendation of an AppExchange partner? Q. What are the reasons you use marketplaces in general? Base: All respondents (n=400). Source: S&P Global Market Intelligence and Salesforce custom survey, November 2022. According to the survey, respondents say that the benefits of acquiring apps and finding experts through enterprise cloud marketplaces include saving time for teams, making it more manageable for staff members to do their jobs, and enhancing trust in apps and consultants. Specifically, 54% of respondents say that their teams saved time, 63% report that resorting to marketplaces made it more manageable for staff members to do their jobs, and 58% state that their trust in apps and consultants was enhanced. These benefits can lead to increased productivity and efficiency within organizations and improved relationships with customers and partners. Hiring consultants Consultant recommends applications Finding consultants Consultant recommends marketplace 87% of digitally driven enterprises have hired consultants they found on the AppExchange 61% bought Salesforce based on a partner recommendation Over 9% of digitally driven organizations found more than 10 different consultants to work with on the AppExchange 44% of the digitally driven used the application marketplace after it was recommended to them by a consultant

How Customers Use Enterprise Cloud Marketplaces To Respond to New Business Conditions | 9 spglobal.com Conclusions Deploying applications in the cloud can be a complex process that requires careful planning, execution and ongoing management. By addressing the challenges of responding to new business conditions in a timely fashion, protecting their existing investment, identifying secure and valuable apps, identifying reliable partners and extending existing applications, organizations can successfully deploy applications in the cloud while realizing the benefits of greater flexibility, scalability and cost-efficiency. In addition, by leveraging a range of applications and services, companies can expand their customer base and generate additional revenue streams. Moreover, customers benefit from accessing a wide range of applications and services from a single location, as well as the support and guidance of experts and consultants. Collaboration and communication between partners and customers also highlight the importance of building strong relationships and fostering a culture of innovation and continuous improvement. Methodology The findings presented in this report draw on a custom survey of 400 respondents fielded in US and Canada in November and December 2022. To better understand the value of application marketplaces, we surveyed various customer personas, including decision-makers, developers, admins, architects, end users, operations specialists and consultants. All survey respondents were screened for their involvement in the decision-making process of purchasing at least one application on an application marketplace. Additionally, we wanted to understand how partners and customers interact with these marketplaces. The survey covered various industries, including high tech, financial services, healthcare, manufacturing, retail and eight other industry categories, and respondents were drawn from a wide variety of organization sizes. AppExchange is the leading enterprise cloud marketplace to help you find the right partner apps and experts for your business challenges. With more than 8,000 solutions and 11M installs to date on AppExchange, you can embark on a powerful discovery journey with AI-powered recommendations based on who you are, technical requirements and expert specializations. To make the best decisions for your business, explore curated collections by industry, product, or use-case and use informative listings to test and evaluate solutions. Get started with AppExchange and visit our sponsoring partners: OwnBackup , Ta s k Ray , and W ithSecure .

How Customers Use Enterprise Cloud Marketplaces To Respond to New Business Conditions | 10 spglobal.com spglobal.com Sheryl Kingstone Research Director, Customer Experience & Commerce Sheryl Kingstone leads coverage for Customer Experience & Commerce at S&P Global Market Intelligence, focusing on the many aspects of how customer experience is a catalyst for digital transformation. She oversees the company’s coverage of a variety of customer experience software markets spanning ad tech, marketing, sales, commerce and service. Bruce Daley Senior Research Analyst, Customer Experience & Commerce Bruce Daley follows business-to-business (B2B) revenue growth companies in the Customer Experience & Commerce practice at S&P Global Market Intelligence. Key themes for his research include B2B Data, Campaign Management, Account- Based Marketing (ABM), Customer Relationship Management and Salesforce Automation, Sales Enablement, Customer Success and Conversational Revenue. About the authors About S&P Global Market Intelligence S&P Global Market Intelligence’s Technology, Media and Telecommunications (TMT) Research provides essential insight into the pace and extent of digital transformation across the global TMT landscape. Through the 451 Research and Kagan products, TMT Research offers differentiated insight and data on adoption, innovation and disruption across the telecom, media and technology markets, backed by a global team of industry experts, and delivered via a range of syndicated research, consulting and go-to-market services, and live events. About this report A Discovery report is a study based on primary research survey data that assesses the market dynamics of a key enterprise technology segment through the lens of the “on the ground” experience and opinions of real practitioners — what they are doing, and why they are doing it.

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