December 7th, 2007
Salesforce to Salesforce, the anti-viral network
When I heard the details of Salesforce.com’s newly announced feature that allows subscribing companies to link data and processes with each other, my first reaction was very favorable. My second reaction — when I heard the price — was, “How much? You must be kidding.”
Salesforce to Salesforce (S2S) is a new feature that allows users in an organisation to invite Salesforce.com users in a different organization to share and synchronize data, custom objects and processes. As some have said, this is a potentially game-changing new capability that taps into the unique nature of a truly multi-tenant hosted application architecture. I would add that it’s a great validation of service-oriented architecture and the role that identity management plays within it.
Organizations and their users have complete control over what’s shared, right down to deciding which organizations and individual users can access each distinct record and field. So for example a human resources manager could share a recruitment process with staff at an external recruitment agency, but limit each agency contact to a separate list of job openings and candidates. A manufacturer might divide up its leads between its partners, while holding back more sensitive data about where the prospects originated and what they’ve previously bought. There’s complete granularity of control by organization and user, and by record, field, object and process. And because this is all defined in metadata, it automatically migrates to the next version whenever the application is upgraded.
Even better, the functionality has been implemented in a way that fosters viral adoption. Salesforce.com users can look up potential targets for data sharing much like a LinkedIn or Skype user might look for other users to connect to. They send an invitation to connect, and once the recipient opts in, the connection is live. It makes a great riposte to Oracle’s newly announced and not-yet-shipping CRM OnDemand products, which have a similarly viral adoption model.
So why-oh-why-oh-why has Salesforce.com slapped on a $1200 per organization charge for initiating connections? (Actually it’s $100 per month, but from a budgeting standpoint it makes more sense to look at the annual figure). Product enhancements are normally free, and it already requires the premium-priced Enterprise, Unlimited or Platform Editions in any case. It’s not as if there’s a major additional cost to Salesforce.com for operating this feature, either. As I mentioned above, it’s a natural product of the way the architecture has been built. I know that Salesforce.com is quoting IDC figures of $3 billion a year spent on this kind of B2B integration using conventional software, but hey, two wrongs don’t make a right.
What’s more, the most common use cases for this feature are going to be in scenarios where some kind of channel master decides that it would be a good idea for all its partners to link up with it in this way. Chances are that only a minority of those partners will have Salesforce.com to start with. The channel master’s influence will encourage entire cohorts of new organizations to sign up to Salesforce.com. How will that organization be recompensed for doing Salesforce.com this favor? It’ll pay a $1200 annual tax fee for each organization that accepts its invites. Some well-off companies may go for it (more devious ones will find some way to pass the charge on), but smaller companies will simply balk at the price tag unless it solves a really critical integration challenge for them.
I’m wondering, has everyone at Salesforce.com forgotten about network effects? Or is it just the mechanics of viral adoption that they don’t get? The only rational explanation that I can see for imposing this charge is that Salesforce.com expect some teething problems with the new capability and want to limit adoption during this early phase. Longer term, it doesn’t make sense to me. I suspect the charge will fall quite rapidly, and it’ll be soft from the outset for those organizations sensible enough to haggle hard.
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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