Original Equipment Manufacturers (OEM)

OEM, in general, is defined as a company whose software product is used as components in the product of another company, which then sells the finished product to customers under its name. For example, the third-party software that comes with your camera, tablet, computer/PC is an OEM software.

In the Salesforce cloud, The term OEM is used when a specific version of the software is associated with a piece of hardware, that is, original equipment. Apps that are sold through the Salesforce AppExchange generally have ISV licenses. Developers also have the option to sell such apps directly to customers, but they generally need OEM licenses for these apps. The terms of these licenses lay down the developer’s agreement with SalesForce and customers cannot purchase OEM products through the AppExchange.  

What is the OEM License?

OEM Softwares are licensed only for the system on which it is installed. They are tied to its hardware therefore, they cannot be installed on other systems, even if the primary hardware is no longer in use. The Force.com Embedded Partner Program offers OEM Embedded license—A complete Salesforce Lightning platform license with contractual restrictions. It prohibits Create, Read, Update, and Delete on Leads, Opportunities, Cases, Solutions, and Campaigns.

AppExchange OEM edition

Due to many restrictions for software with OEM license, Salesforce also launched a new AppExchange OEM edition. This is the industry’s first on-demand platform for offering OEM products to the users. Salesforce partners that have the AppExchange OEM Edition license are allowed to develop, market and sell apps. Apps that are running on this on-demand platform are offered directly to customers, without the need for a separate agreement with SalesForce.com.This license allows more freedom and versatility to developers who built their apps in the Salesforce Ecosystem. 

AppExchange OEM Edition Offering for developers

• A common user interface, single security, and data sharing model
• Customization and integration with the help of the AppExchange Builder, AppExchange API, and AppExchange Database
• Maximum up to Five custom tabs
• Maximum up to Fifty custom objects
• Salesforce secure and reliable service delivery platform

OEM Embedded Software

OEM Embedded apps can access the Salesforce Lightning Platform- standard and custom objects, workflow, reporting, and security. They can also access a few Sales and Services Cloud objects, such as leads, opportunities, and campaigns, but they can’t bring those objects to users. If your app doesn’t rely on functionalities of Sales Cloud or Service Cloud, then you can build an OEM Embedded app. For example, an app that transforms financial accounting or presents exceptional enterprise resource planning (ERP) for businesses. OEM embedded software is not limited to selling to Salesforce customers only, they are usually related to changing the infrastructure of an industry vertical, which could include engineering, healthcare, finance, etc. 

You can sell these OEM Embedded apps to existing and new Salesforce customers or customers outside the Salesforce. Existing Salesforce customers, however, can search and install OEM Embedded software from the AppExchange just like an ISV software. A non-existing Salesforce customer buys your app, but you need to give an org with your app installed. 

Difference between ISV and OEM license models

An ISVforce license enables developers to sell their apps on the AppExchange and for users to download and enhance their Salesforce CRM. An OEM app license only permits developers to leverage the Force.com Platform to develop a fully custom application. Unlike ISV licenses, OEM license offerings are not fixed. Salesforce is highly flexible when it comes to offering various OEM license models, and the actual arrangement of the license would depend on negotiations that are made. The negotiations rely on many factors such as industry market size, opportunity potential, the potential for OEM to expand the existing license and more.

Note: AppExchange OEM edition cannot be used for CRM applications such as Salesforce SFA and Salesforce Service & Support.

The AppExchange OEM Edition offers developers a secure platform, which allows them to concentrate on their product without worrying about the infrastructure. The developers can use the platform, including the operating system, customization tools, web service APIs, workflow and logic, to develop and sell on-demand applications. They can choose their own delivery methods, but cannot use the AppExchange Checkout like standard CRM apps. 

OEM license fee

The license fee for availing the AppExchange OEM Edition Salesforce is set at $25 per user per month.  Salesforce partners are free to set the price for end-users. The price, however, is open for negotiation and can be heavily impacted by the developer’s agreement with Salesforce. So the developer pays $25 per user per month or agreed-upon fixed amount to the Salesforce and keeps the rest. It is always better to get in touch with your Salesforce Account Manager to know about the latest pricing.

This guide has surely helped you decide if you want to go for ISV or OEM. Several companies are building OEM products that are competitive with Salesforce features and gaining success. If the app you want to build has new functionality and can reach beyond Sales and Service Cloud customers then build an OEM Embedded app. Partners with Salesforce have various license agreements across OEM, ISVforce, and Checkout.

Evon Technologies acts as a Salesforce consulting company to Salesforce partners and ISVs. For instance, we will help you build OEM embedded on-demand apps for your end-users and existing Salesforce users. Our Salesforce development services in India include fully utilization of AppExchange OEM Edition offerings such as platform, customization tools, web service APIs, workflow to develop and sell on-demand applications. We understand that licensing OEMs is a big decision and has its implications, therefore we will cater your needs and help you negotiate the licensing cost according to your requirements and number of licenses your enterprise would require to move forward.

Get in touch with us to manage licensing packages for constituting your OEM partnership with Salesforce and any other OEM related queries.