Online CRM Leader Launches Chatter Social Networking for Its Cloud Services

Andy Patrizio

Updated · Jun 23, 2010

SAN JOSE, Calif. — Microsoft made Marc Benioff’s day. The first day of’s Cloudforce user conference — headlined by Benioff, its CEO — saw Microsoft employees staking out territory in front of the San Jose McEnery Convention Center, where they handed out information on Microsoft Dynamics CRM, its competing on-premises CRM software.

On stage, Benioff laughed off his rival’s efforts outside.

“You know you’ve arrived when Microsoft sends protesters to your show. Or sues you!” he said, referring to a suit filed by Microsoft last month, alleging patent infringement.

He didn’t linger on the subject. This was his show, one that’s grown from being held in a San Francisco hotel to a mid-sized convention center, in a reflection of Salesforce’s (NYSE: CRM) continued success. The company has hit a $1.5 billion run rate and has more than 77,300 customers. And every one of those customers will be able to access a new app today, called Chatter.

“If you’re an existing customer, you get Chatter for free,” Benioff said. “The upgrade has already happened.”

It’s free only if you are an existing Salesforce subscriber, however: If you want to use just Chatter independent of Salesforce’s other offerings, it will cost $15 per month per user.

Modeled after Facebook’s personal update feature, Chatter lets subscribers — for instance, team members — follow each other and post updates with items like leads and questions. A lead can then turn into a link within Salesforce’s CRM applications, and potentially, a customer.

Chatter’s profiles, status updates and feeds are all integrated with Salesforce’s core CRM offering, and can also integrate feeds from Google, Facebook and Twitter.

“You can have your own vertical version of Facebook inside your company with the integration and security and trust that you need,” Benioff said.

Chatter debuted in a private beta in February, earning rave reviews from the 100 companies who initially tested the application; the beta was ultimately expanded to more than 5,000 customers. Users involved in the private beta test of Chatter reported a 22 percent improvement in productivity, according to Kraig Swensrud, senior vice president of marketing for Salesforce.

The company said 35 new Chatter-enabled applications have been added to its AppExchange third-party applications site, in addition to the 20 that were already available.

Benioff also announced that later this year will release a Chatter app for the Apple iPad — and during the day’s festivities in San Jose, made 10 attendees’ days by giving each a free iPad.

John Miles, vice president and CIO of Dell’s consumer and SMB division, also showed Chatter on Dell’s own tablet PC, the Streak. Like the iPad version, it shows conversation threads but does not give full access to the entire Salesforce CRM application offering.

Parker Harris, executive vice president of technology and co-founder of Salesforce, said the company has attracted more than 9,000 customers for its Service Cloud customer service offering, and that they would enjoy full integration with Chatter. Telephony integration would help identify a caller and bring up their entire call history with the company and how well their prior calls are resolved.

If a customer has an issue, it’s possible for a call center employee to kick off a Chatter thread on the issue and hopefully find a solution while the person is on the phone.

“These are great examples in the changes you see in apps today,” said Benioff. “These apps just look and act differently. The devices they are on are different. That’s because the industry is changing. So how will you build your apps? You focus on your app — we’ll focus on everything else. That’s what cloud computing is all about.”

Andy Patrizio is a senior editor at, the news service of, the network for technology professionals.

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