The CIO’s life in today’s world isn’t easy. Distributed workforces, mobile/BYOD trends, and consumerization of the enterprise are all making it more and more difficult for the CIO to manage access, authentication and security policies across the enterprise. One way to mitigate this situation is for the CIO to offer employees a custom, internal app-store, which could include apps around ERP, CRM, budgeting, project mgmt. and so on. Such an app-store gives the CIO a single point of control and management. Well, last week, Salesforce announced the launch of exactly such a solution. This ‘Private AppExchange’ platform enables enterprises to create and configure their own app-stores across web and mobile. This Private AppExchange is a variant of the Salesforce AppExchange, which has been around for more than seven years and which currently has more than 2,000 apps. There have been more than 2 million AppExchange app installs so far over these seven years.

Sounds like a great idea. Salesforce brings its cloud cred to the enterprise, helps the enterprise streamline app usage amongst employees, and in the process uses the enterprise CIO as a channel to both grow its user base as well as its app marketplace. If all goes well, Salesforce becomes for the enterprise private and public cloud what the iOS app store is for mobile consumers: a marketplace for secure, out-of-the-box applications.

So what are the challenges? First, most current popular AppExchange apps are geared towards enriching business processes with Salesforce’s CRM data, which for the enterprise is just one piece of the puzzle. For broader scale, Private AppExchange will need to forge deals for apps from giants like SAP, Oracle, Intuit and IBM, which is tough. Second, despite owning a reasonably complete cloud technology stack, Salesforce will still need to prove itself around enterprise security. Salesforce does not have nearly as much control on the user environment as say a Blackberry (with its secure OS) to be able to make it case for being secure. Finally, an app-store or marketplace works best when the marketplace provider itself doesn’t have any apps – a ‘Switzerland’ approach so to speak – yet Salesforce offers CRM and Chatter and ExactTarget and other such heavily used enterprise apps. How will Salesforce attract and retain important outside apps to enlist onto the Private AppExchange given this very apparent conflict of interest?

The Private AppExchange is for sure an interesting undertaking. While it may or may not succeed, one of the key outcomes from it is that startups with targeted enterprise solutions will enlist onto it in greater numbers in order to get to the enterprise. This will spawn more niche enterprise apps, and will further fragment an already crowded entrepreneurial market around BYOD, single sign-on, productivity applications, marketing funnel and so on. That’s the upshot, and its probably not a great one for entrepreneurs.