• March 12, 2013
  • This post is part of an occasional series on the AppExchange as celebrates the seventh anniversary of its launch.  The series will focus on some of the most interesting AppExchange applications of the last year.

    The arc of nCino’s brief existence provides a good description of the power of application development on the platform.  nCino (“Encino” roughly translates from Spanish as “live oak”),  supports commercial loan origination, including CRM functionality to manage the sales process and document management to handle all of the details.  The product was originally developed within a conventional bank, Live Oak Bank in Wilmington, NC.

    To say that Live Oak Bank is conventional is not to imply that it is ordinary.  It is the third largest originator of business loans in the U.S. despite being significantly smaller than its competitors.  With the banking industry in a slump Live Oak could not compete as a low cost provider because borrowing activity was slack and interest rates were at low points.  So the bank decided to innovate and  to compete on business execution.

    Anyone who has paid attention to banking issues during the recession has probably realized that banks had not been keeping up with managing documentation for example, in home mortgages.  But the same has been true of documentation management in commercial loans and it was the content management part of the process that the bank decided to attend to first.

    Live Oak used to build a commercial loan origination system that could take better care of loan documentation and better attend to the customer relationship issues that attend any loan sale.  But the story doesn’t stop there.

    When Live Oak showed off its new system at Dreamforce 2011 the bank discovered significant demand from other banks at the show.  But not wanting to go into the software business, Live Oak spun off its software to a new company —nCino that is the subject of this piece.

    By taking care of all loan origination documents within its Salesforce CRM instance, nCino has developed an origination process that is streamlined and effective.  The company’s initial data shows that it can cut twenty five percent of the loan origination cycle time and put money into the hands of the business borrower faster than its competition thus providing a unique form of competitive differentiation.

    But operational efficiencies are not the only thing that many bankers are seeking out these days.  The financial crisis exposed the document handling capabilities of many banks as unreliable costing many of them lost time, revenues and legal fees.  Industry data shows that as much as thirty percent of loan documents are inaccurate.  These deficiencies have consequently driven many banks into the market for better document handling software and loan origination systems.

    According to Pierre Naudé CEO of the company, has enabled his team of 27 people to innovate much faster than other technologies.  After about a year, the company has nine installed customers with five more in process and several more in the pipeline.  The AppExchange continues to be a good source of leads, which might surprise some people because nCino is an enterprise solution.  But Beagle research shows that enterprises shop on the AppExchange just as smaller companies do.

    Perhaps another surprise for some people familiar with banking is the nature of the solution.  nCino is a cloud offering like all Salesforce solutions and the banking industry, according to Naudé has accepted it without fanfare.  Naudé says it is because “many banks and credit unions have been using hosted solutions for some time, and there’s no difference between running a hosted solution in some remote data center and running a SaaS solution.”  It helps that Salesforce already has all of the certifications that bankers look for including SOC Types 1, 2, and 3 and that it is PCI (private card issuer) compliant.  nCino relies on these certifications as cornerstones of its business and they simply come along with the Salesforce service.

    nCino was started with a loan from Live Oak Bank and it has since raised an A round of funding worth $7.5 million, which Naudé says was oversubscribed.  The company’s roadmap includes delivering a mortgage origination system and retail loan facility later this year but the company does not release information about its roadmap beyond that.

    nCino is a great story about what’s possible given the power of the platform and the AppExchange.  More than this it provides a useful model for the future of enterprise software.

    Published: 11 years ago

    The AppExchange is undoubtedly a significant portion of what makes unique.  Pre-integrated solutions dramatically reduce the cost to the customer to extend the capabilities of Salesforce and the fact that it has already gone through growing pains means it will take other providers years to mimic its capability and impact.  

     ~Narinder Singh, co-founder and CSO, Appirio

    Nine Years ago I wrote The New Garage.  It was a thought piece that tried to peer into the future of Software as a Service (SaaS) and make some predictions from a business and economics perspective.  Salesforce had recently started promoting its platform in the making (then called S-Force) and encouraging third parties to develop applications that complemented and extended the basic Salesforce CRM solution so there was reason to speculate about the impact this new approach would have.

    But also, the history of business and industry is a long story of better, faster and cheaper and at that moment all three were all in the driver’s seat.  Back office software had already demonstrated many business process improvements leveraging automation and the Internet, and I thought it was time to turn some of these techniques on software.  SaaS was a good start but it had further to go, I thought.

    Early impacts lead to tipping point

    I saw S-Force as a tool and an economic system that could revolutionize software, making it possible to create and deploy it in a just in time fashion.  At that time you almost had to be nuts to think that.  After all, even after the initial success of SaaS, software was still something you installed and slaved over for a long time before you got it right, not something you could just plug in like an appliance.  And integration?  Don’t ask! What was I thinking?

    “We’re at a tipping point,” that’s what I was thinking.

    The cold, hard truth of the matter was that you couldn’t expect to sell software subscriptions for a few bucks a month and encumber yourself with all the overhead of a traditional software company because you’d go broke.  Something had to give.  Either software would forever be something you sculpted from a block of marble or you had to figure out how to stamp out perfect copies that plugged in and just ran — no excuses.

    My bet was that we could do the stamping but it wasn’t based on any hard economic data. It was based only the conviction that commoditization would have to continue and that something like what’s now the AppExchange would be the result.  In truth, there were predecessors to the AppExchange.  Steve Jobs opened an online store at NeXT in 1997 and six years later in 2003 Apple set iTunes in motion and today you can buy tens of thousands of apps at the AppStore for all your Apple devices.

    All in a name

    It’s hardly remembered today but the AppStore (name and domain) were originally Salesforce properties and that CEO, Marc Benioff, gave them to Apple.  According to a 2008 Benioff interview with Bloomberg, Jobs had met with Benioff and his team in 2003 to offer advice on the Salesforce online store and the gift was a gesture of gratitude by Benioff to Jobs.

    A store for enterprises

    But those were consumer sites; there had never been an online application store for enterprise grade software until launched the AppExchange in January 2006.  This year marks the seventh anniversary for AppExchange an odd anniversary to celebrate perhaps, but a good chance to look at the AppExchange to see how well it is living up to the original vision.  Here are some of my observations.

    • The partners have built a long list of useful solutions including HR systems, field service, accounting systems, sales tools and marketing automation products.  These are systems that enrich the Salesforce experience but at the same time represent application areas where Salesforce has decided not to concentrate its resources.  Where Salesforce has stepped aside, the partners have stepped in.
    • The AppExchange created the opportunity for a very long tail of credible business solutions.  In the more than 1,700 applications you can find on the AppExchange, there is a host of small applications that just make life easier for the Salesforce customer; some are strategic and many are exceptional.  They are applications that integrate with other applications, distribute incredibly fine-grained information and automate processes in unlikely ways that just happen to work well for populations of users who need those exact solutions.
    • The AppExchange is a good place to do business for companies of any size, especially for SMB’s.  Many AppExchange vendors tell me that they make their living building and servicing their apps to the point that the permutations of Salesforce CRM with partner applications is, if not infinite, then at least very large (roughly 1700! or 1700 factorial).  I had predicted this in The New Garage but I had envisioned problems with revenue splits and single sign-on.  Both challenges have been dealt with.
    • Perhaps most importantly, enterprises go to the AppExchange to find and buy solutions.  One of the constant refrains I hear from AppExchange CEOs is that enterprise buyers find them on the AppExchange and buy solutions through it.


    So here we are after seven years and the AppExchange is by all measures a big success. This blog is the first in a short series of posts that report on the AppExchange’s growth and the success of some of its many partners from small boutiques to large businesses.  This series pays particular attention to ten AppExchange partners that distinguished themselves last year including in no particular order: TaskRay, TOA Technologies, Contactually, The TAS Group, Tango Card, Zapier, Apttus, KnowWho, nCino and KXEN.




    Published: 11 years ago