Tradeshift Extends “App” Ecosystem and Offers Co-investment to Encourage Development on its Platform

Earlier this afternoon, Tradeshift announced a new initiative, Tradeshift Studio, which includes a first-of-a-kind model in the procurement and supply chain applications and supplier network sector — co-investment for application development with partners. Tradeshift is clearly trying to build and foster a partner (including customer) ecosystem of those leveraging underlying platform components and building new capability on top of them — rather than attempting to enable customization through the configuration of standard Tradeshift applications (e.g., e-invoicing).  We wholeheartedly support this extended version of a Procurement PaaS (Platform as a Service) which provides developer firms not just the technical infrastructure, and the exposing of core application services to the third parties, but also the commercial incentives too.

Here are some of the details from the press release and our conversation with Tradeshift on the news:

  • “The initiative provides technology and design consulting and expertise for app development, as well as funding and resources for third-party developers. The company launched the initiative in response to demand from enterprise customers to create customized transaction and workflow applications in order to increase their speed of change and decrease their cost of change.”
  • Tradeshift Studio also offers a strategic app development program. Like an incubator, if individual developers or a company have an idea for an application and want to build it exclusively for the Tradeshift platform, Tradeshift will help with funding and resources.”
  • Regarding co-investment Tradeshift told Spend Matters that it is creating a total fund of $5 million with the goal of investing $150,000 to $500,000 per project. Tradeshift will also provide marketing and sales promotion through its “channels, app market place, and sales/marketing teams.”
  • Developers working with Tradeshift Studio have access to Tradeshift’s “technical team and APIs.”

For Tradeshift apps, the browser UI is built in JavaScript; the actual services can be built using any technology, including Java. One example we saw involves a customized supplier on-boarding app for a customer specifically targeted at new vendor data collection. It takes advantage of underlying Tradeshift platform elements, including data stores, workflow, and UI design (e.g., stacked/hidden pull-down menus).

This and other apps can also talk to and integrate with other Tradeshift apps, as the data models and underlying stack components are common and go through a Q/A process as part of release/approval process. For example, Tradeshift shared that a customized app for onboarding might plug into data or workflow already created for capturing know-your-customer (KYC) data in a trade financing/banking on-boarding process.

Like Apple with the App Store, Tradeshift must approve all apps created on its platform. If apps are meant for the general user community, the revenue model is to take 30 percent of revenue from the third-party developer. Tradeshift told Spend Matters that it would like to get to a point where at least “50 percent of revenue is coming from third party app sales.”

To date, there have been more than 100 apps built by Tradeshift and its partners (though mostly by Tradeshift, admittedly). Aside from supplier on-boarding, other examples include developing specific interfaces for capturing highly granular invoice detail for specific verticals (e.g., logistics) and apps to support country-specific requirements as well as localization and translation of content.

Tradeshift asked for our reaction regarding the concept after looking at it closely and watching the evolution of the Tradeshift platform model. Here’s what we had to say:

“The rise of platform-based technologies that follow the lead of Apple (iOS) and Force.com ecosystem models has taken time within enterprise applications, especially the procurement and accounts payable areas. But the future of mass customizing cloud-based technologies to suit individual requirement will eventually center on highly specific application or ‘app’ development that takes advantage of underlying platform and ecosystem elements.”

“Just as mobile ‘apps’ frequently take advantage of a GPS within an iPhone today, so too will these enterprise development communities leverage the workflow, analytics and other capabilities of underlying platforms tomorrow. The concept of Tradeshift Studio shows us a glimpse into the future when companies will select and even build technologies as much on underlying platform, ecosystem and app communities as the core functionality in business applications and networks themselves.” 

Stay tuned for further coverage of the Tradeshift Studio and app development model on Spend Matters Plus/PRO. Spend Matters also welcomes hearing from any other providers developing (or thinking about developing) a similar strategy/model for last mile configuration and application enhancement.

Comments

  • Pierre Mitchell:

    Jason, well done. It’s really just a more advanced model of an older client-server ecosystem where the core application provider (e.g., an old ERP provider like Intentia) would build the ‘kernal’ app suite and then expose the data model and APIs to partner apps that would then bolt on to, and extend, the core application. This is absolutely core to what we call a Procurement PaaS as you mention – not just empty app development environment, but starting with the core DNA for the master data and transactional/process data. So, when you use the apps in the ‘app store’, they’ve already passed unit/system/user testing, and it’s all SOA based to allow true plug-play when it’s time for the core apps and partner apps to get upgraded. This is indeed the way forward. Now, we’ll see who will all be able to play nicely in the sand box. That’s why the incubator money is key – the tie that truly binds.

  • Roelof Oosters:

    Apparently the growth rate of Tradeshift platform is slipping. That is why they are now offering cash to developers. Why not connect ready made apps to their platform and discuss a kickback fee. That way you can maintain a much higher growth rate without the development risks and investments.

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