Salesforce to Be Reckoned With
Updated · Mar 08, 2002
Salesforce.com aims to become the world’s first “enterprise automation utility” by delivering, customer relationship management (CRM), sales force automation (SFA) and financial software over the Web.
The company’s master plan is bound to bring it into direct competition with conventional software heavyweights such as Siebel, PeopleSoft, SAP and Microsoft Great Plains, according to John Appleby, managing director and senior vice president International of the San Francisco, Calif.-based company.
If Appleby is worried about competing with the big boys, you wouldn’t know it. “We will certainly be making a lot of big software companies nervous over the coming months,” Appleby told ASPnews. “We won’t become an online SAP, but we will have a lot of overlap with what they and others do, and they won’t be happy.” Fighting talk for an ASP whose current offering, Salesforce.com Professional Edition, is a fairly limited Web native CRM application.
Even Appleby describes his application — which comprises SFA, marketing automation, customer service and support, and report and analysis functions — as providing a base level of functionality for companies that would otherwise rely on Excel spreadsheets or the liberal use of Post-It notes. Even so, the company has won 3,800 customers that pay $65 per user per month for anything from one to more than 700 end users.
At a Glance
Salesforce.com customers are attracted by an implementation time of only about four weeks and the rapid return on investment the application offers, Appleby told ASPnews. This contrasts with the lengthy implementation times of conventional CRM roll outs, along with the cost and time uncertainties and other risks that these involve. Salesforce.com’s Annual sales have grown from $6.8 million in 2001 to an estimated $23 million in February 2002, and the company is already cash-flow positive.
Entering the Enterprise
The Professional Edition application (its current offering) does not allow for real-time integration with back-office systems and offers only limited customization. To address these shortcomings Salesforce.com has announced its Enterprise Edition.
Aimed at larger companies, it enables a much greater degree of customization at the client end, so that, for example, each department within an organization can have its own data and views, rather than having a standard corporate view, which might include fields that are not relevant to some departments. More sophisticated administration tools are also included for provisioning, privilege allocation and monitoring tasks.
More importantly, the Enterprise Edition enables data to be exported to or imported from applications such as SAP or SQL databases using middleware provided by third parties. Salesforce.com’s application has been developed using XML
Now that the company is exposing its XML APIs, customers can even write directly to the application using XML and integrate it with HR, data warehousing and other enterprise applications. “It would be possible to work with our XML API to integrate data into Great Plains, for example,” Appleby said. “This makes us ideally positioned to participate in the .Net framework, as we or other companies will be able to clip extra Web services around it.” So far 38 of Salesforce.com’s customers are running trial versions the Enterprise Edition, which is priced at $125 per month.
Completing the Master Plan
Salesforce.com has also introduced an offline edition of its application — which looks just like the online version — that enable users to download relevant data to a laptop and access and manipulate it while on the road. The information can be synchronized with the online data later.
Salesforce.com has also developed a wireless version that can be access using a PalmOS device, but to date it has not attracted much interest from customers, according to Salesforce.com.
The ultimate product in the master plan has a working title of Ebusiness suite, and is scheduled for release towards the end of the year. The suite includes e-billing, invoice management, contract management and order management, and it will eventually include a full-blown enterprise resource planning (ERP) system and every other piece of back office software a company needs, Appleby told ASPnews.
This strategy will certainly make the name Salesforce.com seem too limited. The critical question is this: To what extent has the company’s success in CRM gone to its head, making it believe it can, effectively, conquer the world with its software-as-a-service offering?
ASP as It Should Be
Appleby believes the company’s strategy will be a successful one because it takes advantage of the strengths of the ASP model while avoiding the pitfalls that many would be ASPs have discovered. “A lot of ASPs failed because they took normal monolithic software, attached a delivery mechanism to it and offered it to customers, even though it needed implementation, a separate server and a separate database for each customer. Our application was built from the ground up to be delivered online 3 that’s why we can scale to 100,000 users. No other apps can do that.”
The application is also a true one-to-many system 3 there is one server for each market (Japan, Europe, America) that the company operates in, with customers on each server sharing the application and database. The servers themselves are hosted in a Qwest data center in Sunnyvale Calif, with backup and disaster contingency measures in place in San Francisco. The application runs on the Solaris platform around an Oracle 8i database.
Ultimately, Appleby believes, the ASP model, correctly used, will give Salesforce.com an unbeatable price advantage. “We have proven that software as a service works, and there is no reason why software should be as expensive as it is. With one platform and one database we can offer it cheaper. We offer core functions at a core price, and next time round companies will come to us.”
Fighting talk indeed.
Reprinted from ASPnews.com
Paul Ferrill has been writing for over 15 years about computers and network technology. He holds a BS in Electrical Engineering as well as a MS in Electrical Engineering. He is a regular contributor to the computer trade press. He has a specialization in complex data analysis and storage. He has written hundreds of articles and two books for various outlets over the years. His articles have appeared in Enterprise Apps Today and InfoWorld, Network World, PC Magazine, Forbes, and many other publications.