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Mon, Mar 9, 2009 16:01 EDT

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Posted by: Thomas Wailgum in News Topic: ApplicationsBlog: Enterprise Software Unplugged
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In late February 2009, Salesforce.com CEO Marc Benioff proclaimed that the software-as-a-service CRM maker was "proud to be the first billion-dollar cloud computing company."
Benioff was delivering fiscal year 2009 results to the investor and analyst community, and he was perfectly pleased with Salesforce.com's balance sheet: For FY 2009, the company reported revenues of $1.077 billion, which was an increase of 44 percent from the previous fiscal year.
Ever the showman, Benioff didn't miss an opportunity to take shots at his enterprise software competition (Oracle, SAP, Microsoft and the like): "At a time when capital is precious," Benioff noted, "big-ticket software purchases just don't make sense."
As is the case with Benioff (and his former boss, Larry Ellison), the marketing bravado on company conference calls is a well-choreographed piece of theatrics, this time revealing a new branding strategy. Benioff and his company are attempting to move away from being known simply as a SaaS CRM vendor for small and midsize companies. Instead, executives and marketing collateral now refer to Salesforce.com as "the enterprise cloud-computing company."
And the newfound ability to add a "billion" and a dollar sign in front of the slogan doesn't hurt its cause either, as Salesforce tries snare more share of the large-company market and prove it's ready for the big time. Brand perception means as much as clean code these days.
Of course, some of us might take issue with the semi-annoying pervasiveness of the opaque term cloud computing.
AMR Research's Chris Fletcher notes in his overview of Salesforce.com's recent results that he does take "some issue with Mr. Benioff's repositioning of Salesforce.com as an 'enterprise cloud computing company,'" Fletcher notes. "But in fairness, definitions of cloud computing are nebulous enough that several companies could waft their ways into this category."
Nevertheless, as Fletcher adds, it's difficult to find fault with Salesforce's financial results. "Mr. Benioff's team has clearly executed well," he adds, "with the SaaS model that a few years ago was viewed with suspicion now well established in the industry, which is at least in part because of Salesforce.com’s success."
With the global economy in ruins, SaaS providers such as Salesforce.com are like a school of hungry sharks, eyeing the incumbent CRM, ERP, BI and supply chain vendors who've been wounded by persistent user complaints about high cost, enterprise application inflexibility and vendor lock-in fears, and are treading water as they chart their own uncertain direction.
There's blood in water. And Benioff is circling.
The SaaS model makes sense to me. Who would want to build and operate a Sales Force Automation application when I can buy one off the shelf? But SalesForce latest foray into the 'cloud' is their Platform as a Service (PaaS) offerings, theForce and Sites, for developing applications and Web sites that run in the cloud. I've recently been evalutaing these and similar offerings for enterprise application development and hosting. The challenge is making the business sense of it. For the mature enterprise, there are many issues that make PaaS less attractive; particularly enterprise integration, security, and the desire to leverage existing infrastructure investments; that's not mention that they have no comparitive operating advantage for application development unless they can reuse code better than you (which could be a big benefit when their offering matures). Long-term, SFDC and other PaaS vendors have to recover costs for development, operations, and support just like you do. Maybe PaaS is better suited for non-integrated, public applications and Web sites that may have a better existence outside the domain of enterprise IT; think about those applications that benefit from speed to change, or from tight integration with SFDC's SFA offering. Any other opinions?
I am from the field (consulting partner). From the field it takes a lot more then Benioff to simply change the marketing materials (yet again) to become a platform company.
Yes, SFDC is a billon dollar company (by a small margin), but that billon dollar tagline comes from smaller companies (~ 20 seats per client) and to think that makes you capable of enterprise is just crazy (where are the analyst?). Again in the field the cracks are showing on most enterprise deployments .
Benioff has a very weak team (from an enterprise view) and from all reports he is still the "single point" of decision making (enterprise ready, not).
Given salesforce's inability to establish a partner channel and commercials to support a move away from SaaS CRM, salesforce.com is still only a CRM provider.
Benioff take some advice, develop a platform strategy that enables leverage from partners before it’s too late. Regardless of what comes out of salesforce.com’s PR machine, the facts are 1) Microsoft is gaining ground on cloud and 2) Oracle/Siebel CRM on-demand is starting to eat salesforce.com’s lunch.
I know this comment isn’t along the standard lines of Benioff the ‘super hero’, but like the rest of the economy it’s time to discuss some facts. I am total amazed at the level of incorrect analysis on this company.
Salesforce.com may very well miss the cloud opportunity.
Hey Boss, is that you?
You sit in your office all day long (except for the 2 hour lunch or after the 3 PM departure) talking about how hard you're working "in the field".
When you need a break from talking about your extraordinary efforts in your office, you come do it in mine. I removed the extra chair but you seem quite comfortable delivering your monologues sitting on the desk outside the door.
You are always a bit surprised when the client is frustrated about having to buy yet another software license because #16 'The enterprise data connector widget' was missing from the list of 40 we gave them. And yes, of course, it costs extra. Oh, and yes, they will need yet another server.
We beg for larger development and testing hardware because the crushing weight of SharePoint software constantly crashes our machines, often destroying hours of hard work only to hear "just reboot duh"
The irony of your title and position serve well to put life in perspective, which keeps the smiles on our faces and LOL'ing on IM.
You're always surprised clients' requirements change through the course of a project & 'you know' agile development is 'just dumb'
Of course you're not fooled by salesforce.com's PR machine yet 'Microsoft is gaining in the cloud'
You are not "in the field". You're in the way.
Force.com, Google Apps, and others offer the potential for millions of creative people to develop (for free) Line of Business applications by the hundreds of thousands. You think the global economy has benefited from Facebook's ads about dating sites and running lame 'you've been poked' apps? Now WE have our hands on accounting, supply chain, project management, workflow, learning management, everything. WE can be anyone and live anywhere - no massive server, expensive software, or top of line computer required. You think companies are connected to their customers now? You haven't seen anything yet. "Facebook friends", jeez who cares (Microsoft, just buy it already and put it out of its misery) now mashup ALL of your LOB apps with your customers' apps, regardless of size (your's or their's!!!) - collaboration and workflow are more than posting Word docs to a shared site or firing off a notification email. Industry mastered the physical world and great wealth was created. The mass collaboration of minds will have a more profound impact on our global society than 1000 Industrial Revolutions. Atlas can do much more than just bear the load.
salesforce.com didn't miss the cloud opportunity, the game's already over. The winners are clear.
We use Salesforce.com for a couple of different things in our company. Have done some development on the platform and some customization of the SFA application. We spend about $400K with them a year in the US. I don't know if that makes us a mid-tier customer or qualifies us as enterprise level. But we think it's an enterprise account and our experience is that they are not good at enterprise support. We have regular billing issues. Our sales support is non-existent. We've had orgs shut down by salesforce.com due to issues they have keeping track of everything (isn't that what their base product does?). I've had the salesrep call me to ask who his contacts are (isn't that what their base product does?). I've met with VP's, emailed people, and can't get anyone's attention to fix the issues. We call about product questions and they direct us to the community posts. Well, duh, we thought it would be nicer to have the expert give us their help - we are supposed to get Platinum support with our UE seats. Open source points to community, enterprise platform providers should have expert support.
There's lots to like about salesforce.com and that's why we stick with them. But supporting Enterprise is more than just selling lots of seats. Just like any software company, you need to work to retain the customers - support the product, understand the business, etc. Just because the technology runs in the cloud doesn't mean you aren't selling software.