Contributing Technology Writer
Addons provide all of the critical requirements so that applications have a chance of running through a vendor’s platform environment. If you’ve written an addon, you’ve probably written it for Heroku—the original addons marketplace.
Now, you’re looking for a way to sell your add-on so that profits actually align with the grind and resources you’re throwing at the project. Yet, generally speaking, the market always treats add-ons as an afterthought. We get it, and this article has you covered.
If you read our last article, you already know what addons mean to us. In that article, we explored everything about add-ons, from what they are and who makes them, to the developer’s hellscape that is Heroku and the average add-ons marketplace, and we shone a light on your way out.
In this article, we'll compare the experience of selling addons via Render vs Heroku vs Digital Ocean—with a focus on profits and freedoms, and we'll introduce you to a brand new developers' marketplace that's going to change the way you feel about selling add-ons.
Key factors to consider when choosing a PaaS marketplace
We created AddOns because we believe the current marketplace options all suck.
Let's just put it out there, we believe that there really is no good choice when it comes to where you should sell your add-on. Add-on markets like Digital Ocean and Heroku are untenable when you look at the state of affairs from the developer's perspective.
From 30% margins, to limited customer ownership to commoditization and competition from the platform itself, it’s really a costly business to try and survive as an addon. We’ll dive into this when we compare marketplaces.
We believe that there's one, and only one, ideal solution to the problem. Namely, Add-Ons.io. Nevertheless, let's dive into key considerations when selecting a profitable PaaS marketplace for your add-on, as we think this will help you bring our reasoning into focus.
Target audience
Before selecting a PaaS marketplace, it's essential to understand the target audience of your add-on. Different PaaS platforms cater to different developer communities and industries. It’s important that you analyze the user base of the marketplace to ensure that your add-on aligns with their needs.
Of course, choosing an option like Heroku is fine if you’re making Heroku add-ons, but if you don’t want to be locked into a specific PaaS (like Heroku or Digital Ocean), or if you don’t want to pay that hefty commission and be subject to any challenges and setbacks that platform faces, there is one option that stands out as the marketplace for you.
Addons.io doesn't lock you into developing add-ons for a specific PaaS, and it doesn't lock you to a heavily filtered audience. Instead, it's aimed at all kinds of developers who're after critical service add-ons for their apps.
Marketplace reach
Sure, a marketplace with a larger user base and strong brand recognition can significantly increase the exposure of your add-on—but at what cost? You have to consider how their revenue-share model meets your needs when that exposure could mean a hefty weight of new users for your managed-hosting plans.
Choosing a marketplace for its large user base alone isn’t the most sustainable solution at this stage. Instead, consider supporting an up-and-coming platform like Addons.io that won’t lock you into their PaaS product or the questionable ethics of their revenue share model.
Word spreads quickly in the developer community, and your support could help us to change the face of add-ons as a business model—into a profitable business, as it should be. We offer add-ons devs instant marketing exposure via our PaaS, but not to a heavily filtered demographic of developers, to a diverse one.
We offer a base for safe interaction with diverse potential users whose apps are hosted via a range of providers, and we don't double your expenses or strip you of your business freedoms in the process—this isn't a shark tank.
Integration and compatibility
Evaluate the level of integration and compatibility your add-on requires with the PaaS platform. Does marketing your add-on there mean that it has to integrate with that platform only? Will you be able to sell add-ons there that integrate, instead, with other platforms, that may or may not be competitors to that platform?
Assess the marketplace's documentation, API capabilities, and resources to ensure a smooth integration process, and assess their partner agreement so that you understand the fine print and limitation clauses in full. How much time will you spend in the free tier while they test your integration?
At the end of the day, when they've taken ownership of your development and launch process, your fee structure, your marketing, and your future, are you still doing business for yourself?
Of course, all these considerations are unnecessary, and you’ll be free to create whatever add-ons you please if you opt for a marketplace like Addons.io. On Addons.io, you’re not locked into integrating with a particular PaaS product, and you don’t have to suffer any of the technical and business implications of that integration.
Marketplace policies
We’ve touched on revenue share multiple times, but once you’ve carefully reviewed the policies and terms of the PaaS marketplace you’re looking at, you have to ask yourself who you’d be doing business for in the long run.
Pay attention to factors such as revenue sharing models, pricing flexibility, and intellectual property rights, what are the obligations, restrictions, and rights you have as an add-on provider on that marketplace? Do their policies align with your business goals, or will you barely be breaking even?
We already know the answers to these questions when it comes to popular PaaS like Heroku and Render, and that’s why we created Addons.io. Addons.io is about being a marketplace for developers to buy and sell their add-ons as the heroes of the show while maintaining their business freedoms.
Addon’s primary interest is in fair trade for add-ons developers. It’s something new, but it’s long overdue.
Marketplace ecosystem
Evaluate the overall ecosystem of the PaaS marketplace. Consider factors such as the presence of complementary add-ons, collaboration opportunities, and potential for cross-promotion. An active and vibrant ecosystem can create synergies and networking possibilities that benefit your add-on's visibility and growth.
One important consideration is: will the functionality of your add-on be replicated by the PaaS as part of its next release of major improvements?
This is a common scenario on Heroku and similar platforms, where they replicate the functionality of successful third-party add-ons and later include them as feature updates or branded addons, effectively stealing your idea, and killing your add-on business in the process.
It’s clear from scenarios like this that Heroku, Render, and similar sites might not have your best interests in mind. In this regard, we believe there is only one good choice for add-ons devs, and that’s Addons.io.
Vendor lock-in
Consider the potential vendor lock-in effect associated with add-ons on PaaS platforms like Heroku and Render. When users rely heavily on add-ons like yours, but your add-on is locked into the Heroku platform, for example, your user may find it challenging (and incredibly costly) to migrate to a different PaaS provider or infrastructure.
This will make things difficult for your user when they want to scale up and move on, and you will be left behind in the process. That’s where independent add-ons marketing becomes so desirable for both the addons buyer and developers like you.
By choosing an option like Addons.io, where vendor lock-in isn’t a thing, you’re creating a sustainable, portable relationship with users that can continue to be profitable for both parties as they scale up their enterprises and move on. Being able to scale up and expand with your clients means that you share in their success.
A comparison of leading PaaS marketplaces for addons
1. Heroku Elements
Let's talk about what's in it for you as an add-on developer on Heroku. Your add-on will go through three distinct stages of development, Alpha, Beta, and General Availability.
Rigorous and cost-heavy induction process
In Alpha, the add-on is accessible only to devs and testers. You’ll need to get “a minimum of 15 unique app owners” to use your addon in its Alpha stage. Actually—this requirement isn’t too bad—since you’ll probably want to have folks testing your app before you start handling mission-critical job loads.
However, addon developers often find that this part of the process can feel like you spend more time debugging Heroku’s API nuances than your core product. For example, Heroku lacks developer-friendly feedback such as API logging, API replay, and error details for their Partner API. This means lots of trial and error to make it through Alpha, with no compensation for your added trouble.
Your task now is to become a Heroku partner, for which you will need business approval from the H—. You get this by toting your add-on's benefits and features. Technically, it makes sense to do this part before you develop your app, as a refusal could mean wasted time and money for you.
In Alpha, you'll need to meet the Beta test users, documentation, and add-on integration testing requirements. Then you can request technical approval and, once approved, you can progress to Beta, where your app will be listed publicly for Heroku clients, but with a Beta label and only for testing via a free plan.
That's right, in Beta, your add-on is free.
Ouch. That means, if you suddenly have rapid user gains and need to accommodate say 2000+ users who've provisioned your add-on, you will be footing the bill without income. "It's worth it for the instant customer base and exposure we're getting, we'll be coining it GA," you say, "especially when we've already got all these Beta users," you say. Heroku has news for you.
Wait though—some more requirements to get you on the market.
To get to GA (which means you're on the open market, accessible to Heroku subscribers, and allowed to market paid plans), your add-on will need 100+ users who are unique Heroku app owners, you'll need to meet the GA add-on integration testing requirement and prove that your add-on is primed to meet hard response timeout expectations and a range of other particulars.
You'll also need to get technical approval again, and then the fun part—pricing approval. Once your pricing is approved, you'll need to become an approved supplier for billing purposes, then you can get to GA.
GA is fun, right? You'll get paid a bunch, right? Heroku, as we said, has news for you.
Questionable revenue share agreement
Now that you're in GA, Heroku's magnificent revenue share clause will take 30% off the monthly subscription revenue generated by your add-on. It sounds good, right? Yet, when you start to tally the cost of developing and hosting a heavy-duty, critical add-on for Heroku customers, 70% starts to look barbaric. After all, 30% is probably even higher than your operating costs, and then you've still got taxes to pay!
We’re not talking about 30% of profits, we’re talking 30% of net income. Wait—what? Behold Heroku's magnificent Add-ons Licence and Distribution Agreement, Section 5, below.
Considering the fact that your add-ons extend the functionality of apps made in their platform, and make their platform more desirable to potential users, it's odd that they should tie you in with a 30% commission. Maybe they thought it reasonable because Apple did it with their music at the time, but we all know that Apple is not exactly known for reasonable pricing.
Dependency on Heroku's platform
Selling Heroku add-ons exclusively on Heroku's marketplace means your success is intertwined with the platform's growth, user base, technology adoption, and general evolution. If Heroku faces significant challenges or market shifts, it can impact the demand for your add-ons.
Relying heavily on a single platform for sales exposes you to all kinds of risks that are, essentially, not within your power to mitigate or manage. They own you.
Vendor lock-in
There are many reasons why a company might wish to migrate their application from Heroku. One example is slow load times for customers using Heroku-based apps from their homes in Africa or Asia, two of the most populated regions on the globe. Yet, migrating from Heroku is particularly difficult for users who incorporate Heroku addons into their stack.
We'll dive further into the lock-in effect later in this article, but for now, let's just say that this factor will either cause you to lose customers who're scaling into the East and Africa and wish to migrate their base, or it will cause them to avoid using your add-on in the first place.
3. Digital Ocean
Digital Ocean is a cloud infrastructure provider that allows users to quickly deploy and scale their applications. It specializes in providing private virtual servers or Droplets and various cloud resources. In 2022, it launched an add-ons marketplace where devs can sell or purchase addons that will extend the functionality, capabilities, and scalability of their web server setups.
Here, developers can buy and sell add-ons designed to optimize, streamline, and augment the capabilities of each Digital Ocean user’s web server configuration. These add-ons encompass a range of categories like load balancing, monitoring, security, database management, and more.
DigitalOcean integrates seamlessly with popular code repositories like GitHub, and devs can leverage the platform to set up their web servers and automate deployment pipelines using tools like continuous integration and delivery (CI/CD). Integration with GitHub enables streamlined workflows, including automatic deployment triggered by pull requests.
That’s all good and well for Digital Ocean users, but what about third-party add-ons vendors like you? Because your addon will be designed for integration with the platform, there will be a rigorous and costly application and testing process, and all kinds of compatibility hurdles, as with Heroku, but we won't get into that here.
We've covered them for Heroku, and the issues are the same here, but we'll mention a few things that stand out.
A filtered audience
Since Digital Ocean markets itself primarily to small to medium businesses and startups, you have a limited audience of small to medium companies, all of which are Digital Ocean users.
As a Digital Ocean addons developer, you've filtered down your potential-client base to 2847 Digital Ocean user-companies, with 600,000 individual users in total. Many of those users already have stable apps up and running and, unless they're making changes, they may not be in the market for new services.
Also, with their complex workflows and UX, it's been widely agreed that Digital Ocean is a platform for advanced developers mainly, and we have to wonder how limiting that distinction will be for the growth of the platform moving forward.
Around 75% revenue share for you, but is it enough?
Digital Ocean allows users to integrate with your add-on service without VMs or Kubernetes, each managed database comes with an SSL certificate, and we’ll admit, it’s got a bunch of other great features for users who’re looking to outsource maintenance and management by including addons in their stack.
To reward you for the resources you’re burning by providing managed hosting for your Digital Ocean addon, the platform asks for 25% of your total income. They’re proud of being 5% fairer than Heroku, but that still doesn’t make it profitable for you.
If you consider the fact that you’ll have, ideally, about 25% in running costs, paying Digital Ocean’s cut is effectively doubling your costs.
It's a bitter pill to swallow if you consider up-and-coming Addons.io, which is a marketplace for independent add-ons devs, that are beating Heroku’s fee by 10%—that’s a full third cut off Heroku’s fee, and 5% lower than Digital Ocean.
Also, when Digital Ocean says you'll take home "around" 75% (see the screenshot below), do we know why they're being vague? Would it be unreasonable to ask for a bit more specificity where our personal profits are concerned?
Sticky fine print
Perhaps they're vague because of the sticky fine print, as you can see from the screenshot below. They'll be free to alter the share agreement at 30 days’ notice, and you'll also be charged for all sorts of customer card-payment fees, taxes, and you name it. It doesn't stop there, though, you only have to browse over their Marketplace agreement to sniff the stickiness. You can enjoy it here.
Once you've read the agreement in full, you'd be excused for wondering how much you'll really get paid at the end of the day, and how much of your business is still in your hands.
The truth is, Digital Ocean doesn't lock in vendors or strip add-ons of their independence in the same way that, say, Heroku does, and besides their heavily filtered user base and poor customer support, they've actually got a lot going for them. However, we still feel that their binding vendor and revenue share clauses pose too many risks and costs for the likes of us.
3. Render
Render offers cloud hosting for developers, so Render offers users the ability to build and run apps and websites via its unified cloud, making it easier to develop and launch quickly. Render is quick to deploy all your websites and applications, and all of your services are hosted and managed in the cloud.
They offer free TLS certificates, a global CDN, DDoS protection, and private networks, and they even auto-deploy from Git. They’re cool for app developers, there’s no doubt about that. Familiar names like Sourcegraph and Cypress.io have made a name for themselves on the back of Render—but what about Render add-ons?
As a PaaS environment where other people can build and run apps, Render seems to represent another ideal marketplace opportunity for add-ons but, at this stage, we know nothing about what the vendor terms would look like at the end of the day—and will, more than likely, be comparable terms.
This marketplace is currently only just dripping through the pipeline. We know that Render has partner ambitions and has already rolled out a handful of addons (emphasis on handful). We personally find Render transparent and progressive, but we don’t necessarily see marketing an add-on exclusively via their future marketplace as an ideal business model.
By all means, you can do it, but we believe you should do it only to break into their niche customer base as a side-hustle to your own, independent addon business—marketed, we recommend, via AddOns.io. Nevertheless, Render hasn’t clearly articulated their plans for an addons marketplace.
So, we’ve got no drawbacks to list, and really no comparison to be made in terms of Render vs Heroku or Render vs Digital Ocean. On Render, things are in the works and have been for a while, so check back here, and we’ll be updating this section the moment we have more details.
In conclusion
Leading PaaS marketplaces like Heroku, Render, and Digital Ocean have a lot to offer for application and PaaS developers who build and deploy apps on the backs of their infrastructure. Yet, when it comes to the apparent opportunities they hold for third-party addons vendors, we are overcome by the proverbial pinch of salt.
The data is real, from high commissions and heavily filtered audiences to relinquishing your rights around marketing, management, and pricing structures, there are a number of major drawbacks to consider.
What's more, there are the limitations imposed by developing your add-ons as platform-specific integrations, with platform-dictated compatibilities. Not least of all, there’s the vendor lock-in that can cost you valued users and entire continents of secondary customers in the long run.
Independent marketing via a dedicated addons marketplace is the only way forward, especially if you’re after flexibility and real growth opportunities for your products. Addons.io diversifies your distribution channels, allowing you to showcase your hero-addons outside the confines of integration with a single platform.
Our last article offered deeper insight into Addons.io and its many reasons-for-being, so be sure to give it a read.
A better choice for devs: Addons.io
Addons.io is a fair-trade marketplace that focuses on addons, and only addons. We believe in highlighting addons as the critical services that expedite, streamline, diversify, and scale application and PaaS development for all.
We don't believe in all this 30% rev-share BS. We charge a revenue share of 20% for vendors and, otherwise, vendor and buyer sign-up is free.
Whether you build, buy, or both, Addons.io's goal is to ease your process, raise your profits, and leave you with the freedom (and cash flow) you need to evolve in fast-flowing waters.
We've cast our nets wide so that you can do the same. We've made Addons.io a safe place for veteran devs and dabblers alike. So, why not Sign Up today?
Addons.io connects builders, buyers, and sellers–without the middleman—for critical-service sourcing that’s quick, capable, and cost-effective.