A Salesforce OEM (Original Equipment Manufacturer) partner is a company that builds a product on the Salesforce platform and sells their solution as a managed package, via the Salesforce Appexchange. These products are developed by the company or through a Salesforce PDO. By leveraging Salesforce technology, OEM partners are able to offer their customers a comprehensive, integrated solution that includes both the power of the Salesforce platform, and features and functionality specific to their target market.
The most common questions we receive from associations and not-for-profit organizations considering a Salesforce OEM product are around licensing and risks. We will discuss both in this article.
Does an association purchase licenses from Salesforce or the Salesforce partner?
Salesforce OEM partners build their solutions on a Salesforce OEM embedded platform license. When the solution is built, the partner will package it up and submit it to Salesforce for a security review. When it passes review the partner can begin selling the managed package on the Salesforce Appexchange.
The Salesforce partner enters into a contract with Salesforce ISV and is contractually obligated to sell an embedded OEM platform licenses as part of their offering. When a customer purchases a license from a partner, they will provision the OEM embedded license for each user. In return, the partner pays Salesforce for the use of the platform seat. If you are purchasing licenses to access just the managed package, you’ll purchase the licenses directly from the partner, but it doesn’t mean you won’t need to purchase other licenses from Salesforce.
OEM Embedded Licenses
There are some limitations with the OEM embedded platform license that may require an organization to purchase additional licenses directly from Salesforce in order to meet their business requirements.
Objects: The OEM embedded license comes with your standard platform objects and provide CRUD access to most of those objects (account, contact, tasks, orders, products, orders etc). If you need access to Ideas and Knowledgebase it would be purchased either by the Salesforce partner or directly from Salesforce.
Features: The OEM embedded license offers most features offered by the standard platform license except for Analytics (CRM Analytics) and creating Knowledgebase articles. If you wanted Analytics as part of your solution, you’d need to purchase directly from Salesforce. It is also important to note that not all OEM products have adopted Analytics in their managed package.
Permissions: The OEM embedded license offers most permissions offered by the standard platform license except for a limitation of 25 tabs (could be problematic) and the number of custom objects that can be included in a managed package.
API Limits: There are limits on the number of API calls made to a Salesforce org in a 24-hour period. If your organization exceeds the limit, all users can be temporarily blocked from making additional calls. Historically, Salesforce has made no exception to this rule. You will need to contact your OEM partner to see if they have a separate agreement with Salesforce ISV, for their customers.
Other use cases: OEM licenses don’t include some of the functionality that exists in Sales Cloud, Service Cloud, Marketing Cloud etc. If you need to track information on opportunities, leads, service cases, marketing, social etc you will need to purchase additional licenses directly from Salesforce.
What are the risks of purchasing OEM solutions?
There are a lot of good OEM solutions available on the Salesforce Appexchange, and many that Systems Rewired recommends. But there are also risks that should be discussed before purchasing an OEM embedded solution.
The biggest risks of purchasing OEM embedded solutions are scalability, performance, and vendor dependencies.
Scalability: When using a managed package, you will not have access to the custom code. This means if you have unique business needs that are mission critical to your organization, you may need to change the way you do business or pay for workarounds. And workaround are never a good idea, because they can impact other areas of the system, and in some case, make the solution almost unusable.
Please Note: Business process improvement doesn’t mean you should change the way you do business to conform to a solution. This is a common talking point used by all off-the-shelf software companies that lack the in-depth functionality to meet specific business needs.
Most associations and nonprofits purchase Salesforce because it can scale as their business needs change. If you are using a managed package, you have a limitation of 10 custom objects, which can only be used with the partner solution. This means you can only scale so far before you need to purchase additional Salesforce licenses for each user that needs access to the 11th plus object.
*Important: Salesforce is starting to audit customers with OEM solutions. Those customers that are out of compliance will be forced to purchase additional licenses. This could result in a significant increase of licenses.
Performance: This is more applicable for enterprise solutions, developed before Lightning, and not fully ported over. These solutions tend to have tons of custom code that slow down the performance of the whole package. This includes both the staff side and customer community.
Vendor dependency: One of the main reasons why you are looking at Salesforce is because you don’t want to be dependent to a single vendor. If you purchase an OEM solution your organization will be dependent on the vendor for updates, support, and changes to the application. You will also be dependent on their product roadmap, which is a topic for another article.
In conclusion, Salesforce OEM partners provide a ton of value for Salesforce and their customers. There are pros and cons to using a Salesforce OEM partner depending upon the application and your requirements.
If you are an association or nonprofit looking at a managed package on the Salesforce Appexchange, contact Systems Rewired. We are experienced Salesforce associations consultants that can help you navigate the partner landscape.