Navigating the Salesforce OEM Partnership: A Deep Dive into Success on AppExchange
Key Takeaways
Salesforce OEM partnerships allow app entrepreneurs to resell specialized versions of Salesforce software embedded in other solutions, supporting growth through access to AppExchange and Salesforce's platform features.
Eligibility for a Salesforce OEM partnership requires an independent application that doesn't rely on core CRM functionalities. Partners must ensure the licensing and revenue-sharing model is financially viable and aligns with their business goals.
Listing an app on the AppExchange involves a security review and careful preparation of app marketing materials; successful partnerships prioritize customer engagement, adaptability, and a deep understanding of the Salesforce ecosystem.
Who are Open Equipment Manufacturers (OEMs)?
OEM (also known as Open Equipment Manufacturers) is a company that embeds software or part of the hardware/software in another company's hardware/software/platform/app. The third-party company later markets and sells the product under its branding.
To understand OEM, think of companies that produce refrigerators, washing machines, and other household appliances. They often use OEM components like motors, control panels, and sensors supplied by different manufacturers.
Who are Salesforce OEM Partners?
Salesforce OEM partners are companies that develop specialized software/apps/solutions embedded into the Salesforce platform and sold under the reseller's name.
As a Salesforce OEM partner, you're a reseller offering a specialized version of the Salesforce platform + with a tailored OEM app.
Salesforce OEMs take the Salesforce platform as a foundation and build specialized industry-focused solutions.
Apps seeking an OEM partnership with Salesforce must offer industry-specific solutions rather than functional overlap with Salesforce's standard CRM capabilities.
Imagine the iPhone as a Salesforce platform. As an OEM, you would sell iPhones locked to your specialized app, such as a custom app for Sales productivity.
Salesforce OEM and Its Key Advantages
Salesforce's Reputation and Market Presence: Aligning with Salesforce's esteemed market reputation for a leading PAAS platform can elevate OEM's brand's credibility, driving sales and expanding market share.
Rapid and Cost-effective Development: Salesforce's infrastructure and tooling are famous for their rapid application development model. Using Salesforce, an OEM can go live at least 10x faster.
Advanced Development and AI Tools: Salesforce is innovating in AI, Web/HTML, and technology; as an OEM, your engineering team gets access to cutting-edge tools like Salesforce DX (SFDX), Flow, App Builder, and Lightning Web Components (LWCs) for agile and modern application development.
Objects, Workflows, and Advanced Reporting: The Salesforce platform is famous for its powerful reporting and automation tools, like Flows. CRUD screens, auditing, reporting, and REST/SOAP API access are naturally available to all custom objects without further coding or configuration.
Robust Security: Building an app via code is just one part of the solution, but applying industry-leading security can be a daunting task for OEM; with Salesforce, that is the nature of the platform.
Benefit from Salesforce's comprehensive security measures to deliver secure and compliant applications. This includes:
Trust and Compliance: Adheres to global standards like ISO 27001, SOC reports, and GDPR.
Authentication and Authorization: Supports two-factor authentication, SSO, and detailed access controls.
Data Encryption: Offers encryption at rest and in transit for enhanced data protection.
Platform Security: Includes field-level security, sharing rules, and profiles for data access control.
Audit Trail: Logs user activities and system changes for security monitoring and compliance.
Health Check: Evaluates security settings against Salesforce's best practices to identify vulnerabilities.
Shield Platform Encryption: Provides additional security features for higher data protection needs.
AppExchange Security Review: Ensures apps meet Salesforce's high security and compliance standards before listing.
Partner Support and Training: Salesforce's dedication to partner support and training ensures that you have the resources to succeed.
Brand control and independence: OEMs maintain their brand identity and operate with independent licensing and distribution models.
Salesforce OEM vs ISVForce
Overview:
ISVForce: ISV Partners build and enhance Salesforce functionality, aiming for AppExchange listings.
OEM: Partners create packages for both Salesforce and non-Salesforce customers, including embedded licenses.
Market Focus:
ISVForce: Targets existing Salesforce ecosystem users to expand capabilities.
OEM: It aims to target new customers outside the Salesforce ecosystem.
Revenue Sharing:
ISVForce: Typically shares 15% of net revenue with Salesforce.
OEM: Typically shares 25% of net revenue with Salesforce.
Licensing and Distribution:
ISVForce: Utilizes Salesforce licenses and distribution channels.
OEM: Employs independent licensing models and distribution channels.
Dependency:
ISVForce: Salesforce licenses are required to use apps.
OEM: No Salesforce license dependency for customers.
License Provisioning:
ISVForce: Customers access applications using their existing Salesforce licenses.
OEM: Provides embedded platform licenses directly to customers for app access, independent of Salesforce licenses.
License Related Limitations
Licenses sold by OEM partners can only be used to access the OEM partner solution.
There is a limit of 400 custom objects for the primary solution offering.
To extend the partner solution, end users can create, access, and use up to 10 more custom objects per solution. These custom objects can only be used with the partner solution.
Moreover, there is no option for Checkout with OEM apps.
Success plans aren’t included or changed for any OEM subscription. To learn more about success plans, please visit Salesforce Agreements and Terms.
Eligibility Criteria for Salesforce OEM Partnership
Proven track record of expertise and success in a particular industry.
The solution should complement the Salesforce platform and provide additional value to customers. It should not directly compete with Salesforce's core offerings, forx. The OEM App should not rely on core CRM functionalities like Leads, Opportunities, Cases, Solutions, and Campaigns.
The team should possess strong technical expertise in integrating your solution with the Salesforce platform. This includes knowledge of Salesforce APIs, security protocols, and best practices.
The solution must adhere to Salesforce's integration guidelines and security standards, ensuring a seamless and secure user experience for customers.
The partner must enter a co-branding agreement with Salesforce outlining the terms and conditions for using their brand and trademarks in your marketing and sales efforts.
The applying organization should meet the ongoing financial obligations of the partnership, such as fees or revenue sharing.
To summarise, Salesforce's decision to accept a product into the Salesforce OEM partnership program is based on the proposed product's alignment with Salesforce's strategic goals and market demands.
Revenue Sharing and Pricing
The revenue-sharing model in OEM partnerships is based on the Percentage of Net Revenue (PNR), where Salesforce receives a percentage of the revenue from each license the partner sells.
For OEM Embedded partnerships, the PNR is typically a 75/25 split, with Salesforce receiving 25% of the revenue from each license sold.
The split in an OEM partnership is negotiable. It may vary based on sales volume, market reach, and the partner's strategic importance.
OEMs create an order using Channel Order Applications (COA) to transition from a trial to an active organization. This provisions the licenses and begins Salesforce's billing process for the PNR owed.
The AppExchange OEM Edition license fee is $25 per user per month, providing a baseline for the cost structure influencing end-user pricing.
Negotiating OEM license terms with Salesforce is flexible, which can significantly impact the eventual pricing for end-users and, consequently, the developer's profitability.
The PNR can change over the duration of the contract with Salesforce based on performance and market conditions, allowing for adjustments that reflect the business environment.
How to Apply for an OEM Partnership?
Join the Partner Community:
Agree to Salesforce Partner Community (SPPC) policies.
Apply for membership.
Meet Initial Requirements:
Receive a welcome email with basic requirements.
Demonstrate compliance within 30 days.
Application Review:
Salesforce evaluates your application.
If approved, attain provisional partner status.
Achieve Full Partnership:
Follow the details for full partnership requirements.
Complete requirements (certifications, fees, etc.).
Official Acceptance:
Meet all criteria to become a full partner with "Base" level access.
AppExchange Process for OEM Partners
Initial Steps:
Registration and Agreements: Join the Salesforce Partner Community, agree to the terms, and apply for a provisional partnership.
Understanding Requirements: Review the OEM Partner User Guide and Salesforce Partner Agreement to grasp eligibility, process, and obligations.
Development Phase:
Solution Development: Use Salesforce's security, coding, and best practice guidelines to build your application.
Salesforce Integration: Integrate your solution with the platform via APIs and tools.
Listing and Approval:
AppExchange Listing: Create your application's listing on the AppExchange, detailing its description, functionality, pricing, and audience.
Security Review: Submit your application for Salesforce's security review to ensure user data protection.
Compliance Checks: Ensure your application complies with Salesforce guidelines and licensing agreements.
Launch and Maintenance:
AppExchange Launch: After approval, launch your application on the AppExchange to reach a broader audience.
Ongoing Maintenance: Regularly update your application for bug fixes, new features, and compatibility with Salesforce updates.
Additional Considerations:
Limited Access to Features: OEMs might have restricted access to AppExchange features, such as managed packages or checkout functionality, compared to Salesforce ISV partners.
Independent Licensing and Distribution: OEMs use their licensing and distribution models independent of Salesforce's standard checkout process.
Summary
In this blog, we explored:
Salesforce OEM Partnerships: The concept of OEM partnerships and how they work.
Eligibility and Requirements: Criteria for becoming a Salesforce OEM partner, including industry focus and solution independence.
Benefits of a Salesforce OEM Partnership: Key advantages of partnering with Salesforce such as rapid development and advanced security features.
Salesforce OEM vs. ISVForce: The key differences between OEM and ISVForce partnership programs.
Revenue Sharing and Pricing: The revenue sharing model for OEM partnerships and how pricing is determined.
Applying for an OEM Partnership: The step-by-step process to apply for an OEM partnership.
AppExchange Process for OEM Partners: The specific steps involved in listing your OEM app on the AppExchange, including security review and compliance checks.
As a Salesforce implementation partner, our team can guide you through the OEM partnership process and connect you with resources to ensure a smooth Salesforce implementation within your organization. Contact us today to discuss your specific needs and explore how we can help you achieve success.
By choosing us as your Salesforce implementation company, you benefit from our extensive experience and deep understanding of Salesforce’s capabilities. We tailor our approach to fit your unique business requirements, ensuring that every aspect of the implementation aligns with your strategic goals.
Related Reading
Tips To Pass Salesforce AppExchange Security Review - A Guide for Salesforce ISVs
Watch Video On - Build ISV AppExchange Apps for Salesforce Essentials
FAQs
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Here’s an example to better understand the Salesforce OEM partnership model:
Suppose, a healthcare software provider wants to enhance its electronic medical records (EMR) system with advanced patient relationship management features. By entering into an OEM partnership with Salesforce, they can integrate Salesforce Health Cloud into their EMR system.
This integration will allow healthcare providers to manage patient interactions, appointments, and health records more efficiently, leveraging Salesforce's robust CRM capabilities. The healthcare software provider benefits from Salesforce's expertise in healthcare CRM while offering a comprehensive solution to their clients.
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Revenue share negotiations are common in Salesforce OEM partnerships. While the standard split is 75/25 (partner/Salesforce), negotiations can occur based on various factors such as:
Partner's value proposition: Offering unique value beyond core Salesforce functionalities can strengthen your negotiation position.
Sales volume and market reach: Demonstrating high potential for driving sales and expanding their reach can benefit Salesforce.
Strategic importance: If your solution aligns with Salesforce's strategic goals, it might incentivize a more favorable split.
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As an Salesforce OEM partner, you might have limited access to certain AppExchange features like managed packages and checkout functionality compared to ISVForce partners.
Moreover, be prepared to manage your own licensing, billing, and customer support independently of Salesforce's standard processes.
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