Category: Salesforce.com
November 21st, 2009
Taming the Chatter cloud
Not attending Dreamforce, it appears I missed a telling moment, the irony of which I would have enjoyed had I been there to witness it in person. It seems Salesforce.com has announced a new feature named after that most social of activities, Chatter, which aims to bring to the enterprise the functionality seen in social network tools such as Twitter and Facebook. But as Marc Benioff later told a gathering of press and analysts, it’s not a social network, oh no.
As I wasn’t there I can only go from what’s been reported. But it seems Benioff (no doubt guided by his marketing advisors) has decided to follow the advice promulgated at the recent Enterprise 2.0 conference in San Francisco — by no less a figure than Enterprise 2.0 guru Andrew McAfee — not to overuse the word social in front of business software buyers when talking about, erm, social computing. “I have rarely come across a word that has more negative connotations to managers in enterprise organizations,” McAfee warned his audience two weeks ago.
Benioff this week was devastatingly forthright about why social isn’t going to figure in his sales team’s lexicon when they tell customers about Chatter. According to VentureBeat’s Anthony Ha (my emphasis added):
“Salesforce was careful to position Chatter as a collaboration tool, not a ’social this or social that’ because there’s such a glut of social networking tools, he said, and customers are more willing to pay for collaboration software. ‘We really want to talk about collaboration, because that really is a budget item for our customers,’ Benioff said.”
So there we have it. Chatter’s going to be positioned as a collaboration tool, because that’s what customers are willing to pay for. I can still see problems ahead for this product, on three fronts, but let’s deal with that positioning question first, because I have quite strong views about it.
Interestingly, Microsoft seems to share no such qualms Read the rest of this entry »
October 22nd, 2009
Box.net wants to be the Switzerland of data
Today, online file storage and collaboration provider Box.net launches integration with Salesforce.com. As TechCrunch explains:
“… businesses will be able to add a Box.net app to their Salesforce accounts, allowing them to quickly access their documents, media, and other files from directly within their CRM … businesses need to sign up for Box.net’s enterprise plan, which includes free access to the Salesforce app. As an added bonus, any businesses using the new Salesforce integration will be eligible for unlimited storage on Box.net …”
The move is a first step in a strategic direction for the company, its VP of marketing Jen Grant told me on Tuesday: “We’re moving towards a broader look at how the cloud can help a business. Now we really want to start connecting clouds together,” she explained. “Today, we’re connecting the Box.net cloud with the Salesforce.com cloud. In the future, we’re looking at partnering with many other services.”
The unlimited storage is a key part of this offering, which is designed to act as a single, permanent home for users’ data as they move between online applications. If Box.net succeeds in its ambitions, it will become the “Switzerland” of online data storage — the one neutral location where everyone feels their online valuables are safest.
Of course one vital component in winning that role will be the trustworthiness and reliability of Box.net as a cloud repository (especially in light of recent failures elsewhere). With $14.6 million venture funding to date (almost half of it in a round announced last month), Box.net is not yet in the topmost league of cloud providers so may need to continue its expansion before it can afford a fully redundant architecture. But convenience and competitive pricing are also important considerations in the small-to-mid-size business market that produces most of the customers of this service. Here’s what Grant told me in an email when I followed up our conversation on Tuesday with a question about security and disaster recovery at Box.net:
“Here is a detailed outline of our current security measures in place: https://enterprise.box.net/features/security
“In the short term, we’re adding encryption on files at rest (among other initiatives) in addition to the encryption in transit that we already have; you can expect this to be complete in the next few weeks.
“For the long term, we’re currently undergoing the SAS 70 certification process within the company, which will ‘officially’ endorse our standards regarding both security and privacy. This is above and beyond security implementations that most companies have on an internal server or collaboration tool.
“… keeping our customers’ data safe and secure IS the core of what we do, and we know that our very business depends on us maintaining that level of security. Because of that, we spend a great deal of time thinking through how to implement and maintain the highest level and latest advances in security technology.”
Box.net has produced a useful YouTube video explaining how the new Salesforce.com integration works.
August 26th, 2009
WebEx chief quits Cisco for Salesforce.com
Doug Dennerline, a long-serving Cisco insider who took the reins at web conferencing leader WebEx several months after Cisco acquired it, has quit his job as senior VP and general manager of Cisco’s Collaboration Software Group to become executive VP, enterprise sales Americas at Salesforce.com [disclosure: both WebEx and Salesforce.com are former clients].
I interviewed Dennerline in January last year, just weeks after he took up the collaboration software role at Cisco, and he outlined four priorities for that year:
- Get Cisco’s sales team selling the WebEx service
- Finish preparations for a production launch of WebEx Connect, the company’s on-demand collaboration and composite applications platform
- Harness Cisco’s partner channel to sell WebEx
- Tap Cisco’s resources to bolster research and development of new WebEx services
Although WebEx has continued to grow and has brought out some Cisco-inspired enhancements to its offerings, progress on all four points has been lukewarm and it’s no surprise Dennerline found himself tempted by the more vibrant pastures at salesforce.com. (As an aside, I’m also intrigued to see Salesforce.com hiring again at that level after cutting some senior sales management roles just six months ago — as well as wondering what Cisco, one of Salesforce.com’s banner customers, thinks about its supplier poaching one of its top executives).
To see Dennerline jump ship no doubt compounds the demoralization Read the rest of this entry »
June 18th, 2009
Cheap jibe sullies SAP's SaaS strategy
My jaw dropped as I read this just-published CIO.com interview with SAP’s CTO Vishal Sikka. Last week, John Wookey, executive vice-president of large enterprise on-demand, set out SAP’s commitment to on-demand in a widely-reported speech in Amsterdam (SAP this week reiterated the commitment in a corporate press release). This week, the company’s CTO had this to say about leading SaaS vendor Salesforce.com:
“When [vendors] call their little salesforce-automation application a ‘platform’, that does actually bother me, as a technologist, to be honest with you.”
If SAP wants to be considered a leader in the on-demand space, as John Wookey proclaimed in Amsterdam, then the last thing its top executives should be doing is going around belittling the achievements of other SaaS players.
I find it astonishing that Sikka — who works out of the same Palo Alto facility as John Wookey — could be making such statements at this time. Was he not aware when he gave this interview of the likely content of Wookey’s presentation in Amsterdam last week? The message this sends is that Wookey’s initiative doesn’t have the wholehearted support of SAP’s board.
Unfortunately for SAP, the outcome of Sikka’s intervention may be the opposite of whatever was intended. His smug contention that the entirety of SAP’s supported software catalog is “timeless” is just an invitation for ridicule. Read the rest of this entry »
April 9th, 2009
Opening the kimono on Salesforce.com's green crystals
Last year, a discussion at OnDemand Europe (which this year I’m helping to organize, see disclosure and video) prompted a couple of posts here on the importance and degrees of multi-tenancy. Those postings in turn prompted fellow-Enterprise Irregulars blogger Bob Warfield to liken multi-tenancy to the green crystals apocryphally used in soap marketing:
“… multi-tenancy is much more of a marketing event than a technology event. Whoa! That sort of thing will get me excommunicated from the SaaS Church of Benioff. Well, I’m sorry, but it’s true. Multi-tenancy is all about what we used to call ‘green crystals marketing’ at Borland … When you’re having a hard time differentiating, you find something unique and make it your green crystals. They provide a reason to believe why your offering is better even if they aren’t the whole reason or even most of the reason.”
Whoa indeed, Bob, I thought at the time, that’s a bit extreme. But Bob’s words started ringing in my ears the moment Salesforce.com co-founder and chief technology guru Parker Harris stepped up on stage at Cloudforce London this week to pronounce Salesforce.com the leading force in cloud because, quote, “We chose the right algorithm for multi-tenancy.” [By the way, I should also mention Salesforce.com is a recent client. See disclosure.]
Harris went on to map out the secret sauce that makes the company’s multi-tenancy so special — and I know many readers will want to know what it is, so I’ll get to that in a moment, bear with me — but the first question in my mind was, why does Salesforce.com decide that now all of a sudden it wants to start opening up the kimono and exposing details of something it’s always previously kept schtum about? (’Green crystals! Green crystals!’ whispered Bob’s avatar, excitedly jumping up and down on my left shoulder).
“Customers, especially from larger enterprises, have started asking us to tell them more about it,” explained EVP of marketing George Hu when I caught up with him as the keynote crowds dispersed. Fact is, I suspect we’re going to hear a lot more discussion about multi-tenancy this year. Larger enterprises are looking at cloud technologies and seeing that they can implement private clouds internally, so no wonder many of them are asking what’s so special about Salesforce.com. They’re probably wondering whether they can replicate what Salesforce.com does on their own private clouds, and sidestep the need to entrust their application infrastructure and data to a third party.
So are Salesforce.com’s green crystals just a marketing ploy, or is it really something that customers can’t easily replicate in their own private clouds, or by adopting rival cloud platforms? Read the rest of this entry »
April 2nd, 2009
SaaS channel models morph into shape
Mark down NetSuite’s announcement today of SuiteCloud Connect for Salesforce.com (all Techmeme coverage) as a victory for the cloud over individual vendors. Sure, this is still about who owns the biggest slice of the cloud (did you notice the resemblance between NetSuite’s SuiteCloud diagram and a pie-chart? Guess who got the lion’s share). But it represents a blow for Salesforce.com’s own-the-whole-ecosystem AppExchange model, just as much as it’s a step back from NetSuite’s former rhetoric about standardizing on a single vendor’s suite for all your needs. [Disclosure: NetSuite is a current client and I've also done work recently for Salesforce.com and Intacct].
It signals that intermediaries are going to have more power in the cloud and we’re not going to end up having to choose between just a handful of mega-vendors. Instead, interoperability (dictated by the cloud, not a self-appointed elite) is going to be the dominant meme and vendors will have to empower third parties to link their application platforms wherever customers can find the most value. The open cloud wins the day.
There’s a strong message emerging too about the importance of channels in delivering cloud and SaaS solutions to customers. While NetSuite is clearly motivated by being able to market its ERP and ecommerce platform to Salesforce.com’s SaaS-savvy customer base (and who in this market doesn’t covet a slice of that action?), it’s increasingly relying on a number of different kinds of channel partners to reach the market. At first glance, the partner ecosystem for SaaS doesn’t look that much different from the channel partners that traditional software vendors have worked with. But the detail of how they execute is much changed. Read the rest of this entry »
February 26th, 2009
Another outage, another dashboard
From the I-told-you-so department. Finally, Google has followed a long line of leading SaaS and cloud providers trying to break into the enterprise market in introducing a status dashboard for Google Apps.
I called on Google to do this in August last year, warning that if the company didn’t do so, it would not only be bad for Google’s reputation but also for the rest of the industry:
“If it doesn’t take suitable action, the snowballing subscriber volumes of businesses that are signing up for Google Apps are going to get a poor introduction to SaaS, which is no good for Google and bad for the industry as a whole.”
So, yesterday there was a Gmail outage and today, guess what? Google rolls out a status dashboard it just happened to have waiting in the wings. Why oh why do providers always, always have to wait until after a damaging outage before they do this? Wait, didn’t I already say that exactly one year ago? Read the rest of this entry »
January 27th, 2009
Oracle puts a price on single-tenancy
Oracle today announced a new centrally managed single-tenancy option for its SaaS CRM OnDemand application, along with various other features including unlimited custom objects. Existing prices remain the same, at $70 per user per month for the multi-tenant version and $125 per user per month for the previously available single-tenant enterprise version, which is a completely independent instance for which the customer can dictate its own upgrade and patch schedules.
The new ’standard’ single-tenancy option comes in at $90 per user per month. It’s still a dedicated server but, unlike the ‘enterprise’ option, Oracle decides when it gets patched and upgraded. “You can get your own stack of the application but we’ll still manage it and maintain it on our standard schedules,” Oracle’s SVP of CRM OnDemand Anthony Lye (pictured) explained to me in a briefing late last week.
What’s the benefit? Lye says that it’s having single-tenant instances of each component of the application stack, including the database, enabling benefits such as custom performance tuning. He calls this option a ’sweet spot’, perhaps reckoning that most customers will be happy to stump up this small extra delta to have a server (even if only a virtual one) that they can call their own.
What I found interesting is the way Oracle has effectively put a price-tag on single-tenancy, all other things being equal in terms of shared management and data center infrastructure — and it’s set it at $20 per user per month. Assuming Oracle is operating on the same gross margins as Salesforce.com, Read the rest of this entry »
January 12th, 2009
Hooray, 2009 starts with a SaaS backlash
I welcomed Harry Debes’ outburst against SaaS last summer, because being attacked is always better than being ignored. After years of indifference to SaaS, the conventional software world has suddenly woken up to the threat and started attacking it in the hope it will all go away.
2009 has begun with a renewed onslaught — perhaps enheartened by Salesforce.com suffering a total shutdown for almost 40 minutes last Tuesday, when a network device failed and took out its failover at the same time. Even the system status dashboard was inaccessible, leaving customers feverishly twittering for updates.
On the same day, Bill McDermott, SAP America’s CEO and president of global field operations was telling Information Week that large enterprises will “never” use SaaS as a platform for running their core business operations (Oracle’s CRM chief Anthony Lye advanced a similar argument at November’s SIIA OnDemand conference).
Instead, former Oracle technology chief John Wookey is heading up a strategy to offer SaaS modules that “snap on” to SAP’s on-premise applications — rather like Microsoft’s ’software-plus-services’ approach. As if that will eliminate all likelihood of anyone ever suffering a 40-minute outage. Perhaps a sprinkling of FUD about SaaS vendor viability will do the trick instead …
Yet the harder these holdouts rage against SaaS, the more steadily it advances. Today, Evans Data released the results of a developer survey that found almost a third of developers in North America are already working on SaaS projects, and more than half worldwide expect they’ll be doing so in 2009. Meanwhile, an analysis of Google search data by Pingdom has found that SaaS is still holding its own as a buzzword, even while both ‘Web 2.0′ and ‘cloud computing’ have shown sharp declines in 2008.
Faced with such a relentless surge, the anti-SaaS chorus is hitting ever more frenetic notes. For example, the ComputerWorld blogger who last week argued that SaaS hurts a fragile economy by eliminating IT staff from unproductive positions that are a drag on their employer’s operational efficiency. Or the astonishing calculation that if you power on your desktop computer and then power it off again each time you do a Google search, you’ll soon burn more carbon than if you boil a kettle.
When the attacks become this desperate, you know you’re onto a winner.
December 12th, 2008
SaaS and the renewal question
One of the unspoken tenets underpinning the SaaS model is that customers are for life. Forget the mantra that it’s a pay-as-you-go relationship from which the customer can walk away at any time. Providers know that once they’ve captured a client’s data and daily routine onto their service, moving elsewhere is a pain. This is true even for individual consumer services like FaceBook or Gmail, but it applies far more tellingly when it comes to business applications. Payroll provider ADP’s average customer lifetime is around twelve years, and most of the attrition is due to company mergers and failures or wider software upgrades rather than simply losing out to a direct competitor. That’s the sort of customer stickiness most SaaS providers are aiming for.
Without that stickiness, there’s a fundamental flaw in the economic model of SaaS, which as I’ve discussed in recent posts, funds the upfront cost of acquiring and provisioning a customer in the expectation of earning back that investment over the lifetime of the customer relationship. Omniture’s Josh James emphasized the importance of renewals to his company’s finances when he spoke on this topic at a conference last month. He explained that Omniture carefully watches its customer retention rate to make sure it stays above 95 percent annually, and anytime it looks like dropping below that figure, management takes immediate action to trace and fix whatever’s causing the problem.
But what if the cost of restoring renewal rates is more than a matter of hiring a few extra bodies in the customer support team? Speaking a day later at the same conference, Oracle’s Anthony Lye, senior vice president of Oracle CRM on Demand, suggested that SaaS vendors have got it wrong on renewals. At a meeting a few days later at Oracle headquarters, he gave me an example he’s closely involved in. Read the rest of this entry »
Phil Wainewright is a commentator and strategist on emerging software industry trends. See his full profile and disclosure of his industry affiliations.
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