Online CRM provider UpShot earlier this week countersued rival Salesforce.com and asked a federal court to stop Salesforce.com from using misleading information on its Web site and in its sales literature.
Posted Aug 6, 2003
The battle over the CRM ASP market has moved to the courts.
Online CRM provider UpShot earlier this week countersued rival Salesforce.com and asked a federal court to stop Salesforce.com from using misleading information on its Web site and in its sales literature, press materials, and communications to customers.
The suit, filed Tuesday in the Federal District Court in San Francisco, is a response to a suite filed in July by Salesforce.com. In that suit Saleforce.com alleged that UpShot's recent advertising claims violated state and federal laws against false advertising, unfair competition, and unfair business practices.
"We were willing to put up with Salesforce.com's repeated untruths about UpShot and have customers make their own decision on the better online CRM solution," Keith Raffel, chairman and founder of UpShot, said in a statement. "However, Salesforce.com forced our hand when it turned to the judicial system to censor our series of informational ads."
The crux of the original suit is Salesforce.com's issue with UpShot advertising that uses the phrase "The Better Online Solution."
San Francisco-based Salesforce.com is also suing over an ad that compared each company's integration to Microsoft's popular Outlook email program.
UpShot is countersuing because the company claims it has sufficiently answered all of Salesforce.com's complaints. Upshot says it used "The Better Online Solution" because a report from market researcher and consultancy Summit Strategies gave UpShot a higher grade on its product than it gave Salesforce.com.
With regard to which product has better Outlook integration, UpShot executives told Salesforce.com it would pull the advertisement if Salesforce provided an example of a Salesforce.com customer that could perform the same level of integration with Outlook as UpShot.
Salesforce.com did not provide that information and continued to ask that UpShot stop the ads.
Other CRM vendors in the online space are convinced that this ugly battle will have negative effects for the market space.
"The online model is finally being recognized as a viable business model that is the next generation of CRM," says Mike Doyle, chairman and CEO of Salesnet. "However, the feuding between Salesforce.com and UpShot is hindering the progress that we have made. It's tantamount to siblings squabbling over who had a toy first. These lawsuits are ineffective and petty; ultimately they cost time, money, and resources that should be spent serving customers and evangelizing the value proposition of the online business model."
According to Erin Kinikin, an analyst with market researcher Forrester, says that Upshot being sued by Salesforce.com is a compliment. "UpShot has a strong product but they are not typically as vocal as Salesforce about spreading the word," she says.
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