The on-demand service and interface go offline, but financial analysts stand by the company's performance as the fiscal quarter comes to an end.
Posted Jan 31, 2006
Salesforce.com users experienced another service outage on Monday, the latest in a series of minor and major service interruptions for the popular on-demand CRM application. The outage, described by both financial analysts and competitors as "severe," comes at the crucial end-of-month period, when salespeople and other Salesforce users are scrambling to finalize their monthly and quarterly numbers.
Published statements by Salesforce claim the outage was brief, lasting approximately 30 minutes, but customers have reported downtime of as much as four hours, with the servers down and the API nonresponsive. Salesforce executives call the incident minor. "The system is running fine today. Some of our customers experienced a period of intermittent availability...yesterday," says Bruce Francis, vice president of corporate communications. "We regret any inconvenience that this issue may have caused."
A number of responses to news postings on Salesforcewatch.com, a blog dedicated to monitoring the company, tell a different story. "Saleforce.com (the standard interface) was down more than it was up today," writes one poster claiming to be a Salesforce customer. "I decided to just leave the office today, because I couldn't work."
Despite the outage, the most recent in a string of interruptions for Salesforce this quarter, financial analysts do not appear worried about the company's financial future. A report by Mark Murphy, managing director of First Albany Capital, indicates that First Albany was maintaining its neutral rating on shares of Salesforce.com. "We believe this is Salesforce.com's second severe outage during its January quarter, in addition to one or two minor outages," Murphy writes. "[Monday's outage] is apparently leading to more aggravated customer and prospect responses. From their perspective the outage experience has transitioned from an isolated event into a recurring trend." He also that the timing of the outage, with 36 hours left in Salesforce's current fiscal quarter, might not detract from results because of strong performance earlier in the quarter. "We remain highly optimistic on the future growth potential for Salesforce. The current valuation deservedly reflects a high anticipated rate of future growth."
The last major outage Salesforce experienced occurred on December 20, 2005, and took the company's on-demand service offline for about five hours. Other outages and service degradations over the past few months have been shorter, but they call into question the company's ability to provide maximum uptime, and highlight the need for redundant data centers. Competitors are quick to attack. "Last time Salesforce.com had this problem, Salesnet agreed that with a hosted system some downtime is of course inevitable; however, at some point it becomes unacceptable, especially on the last days of the month-a crunch time for every sales person," Jonathan Tang, president of Salesnet said in a written statement.
Tang noted that Salesforce's system status page, a beta version implemented to give customers real-time updates on system status and performance, failed at plugging the very hole for which it was intended. "Salesforce.com is becoming a victim of its own success and they are failing their customers," Tang said in the statement. "At what point will their customers decide they have had enough?"
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