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Working Paper: Case Study

How Salesforce Built Its Platform Business

Salesforce built an external developer platform that allowed third parties to develop cloud apps extending the company’s core CRM system.
CASE STUDY

An in-depth description of a firm’s approach to an IT management issue (intended for MBA and executive education)

Abstract

In 2023, Salesforce was the provider of the CRM system with the biggest market share. Besides providing a CRM software product, the company also offered an external developer platform called Salesforce Platform. Salesforce Platform enabled CRM customers to customize their CRM system and allowed partners (third-party developers) to develop cloud apps that could be distributed via Salesforce’s AppExchange marketplace. Since its official launch in 2008, Salesforce Platform had become a major revenue contributor for the company, including from over 7,000 apps in AppExchange.

Building a successful platform business extended far beyond building a technology platform to nurturing an entire ecosystem around it. Based on interviews with twelve executives, this case study illustrates what it takes for a product company to build a platform business—developing and scaling the business model, engineering the technology platform, growing a vivid community of developers, and marketing and selling the platform—and how Salesforce addressed related challenges.

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About the Researchers

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Martin Mocker, Professor, ESB Business School and Academic Research Fellow, MIT CISR

MIT CENTER FOR INFORMATION SYSTEMS RESEARCH (CISR)

Founded in 1974 and grounded in MIT's tradition of combining academic knowledge and practical purpose, MIT CISR helps executives meet the challenge of leading increasingly digital and data-driven organizations. We work directly with digital leaders, executives, and boards to develop our insights. Our consortium forms a global community that comprises more than seventy-five organizations.

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