Salesforce.com: A Software Solution for Rent

Not long ago, Scott Lucas began shopping for a new automated system to help 70 people in the sales, business development and marketing departments at iSyndicate, a San Francisco-based content aggregator. The employees needed a way to track opportunities, manage contacts, store account information, evaluate their performances and create reports.

Lucas, iSyndicate's sales team leader, checked out products from Siebel Systems and Oracle to replace the company's outdated ACT contact management database. Both systems, he says, required dedicated servers and software and could cost thousands of dollars per user, plus maintenance fees, additional technology support personnel and hardware. Then he contacted Salesforce.com, a new online sales automation service. Rather than buying hardware or software, Lucas bought a network connection for a monthly fee of $50 per user.

It took only one day to convert iSyndicate's database to the Salesforce.com service. Two weeks later, iSyndicate employees were all up to speed and using the new system. "Now it takes 30 seconds to run an accurate report," Lucas says. iSyndicate is sold on the idea of the Internet as a cheaper, more efficient way of doing business.

Salesforce.com is also field force-friendly. It can be used anywhere, anytime--all your field force needs is a Web connection; there's nothing to load onto a desktop.

Lucas says, "The main advantages we see are the ease of implementation and the flexibility to configure it to our needs. We don't have to install software.... And it's relatively inexpensive and very easy to use. The company motto is "Point, click, close."

A Growing Trend
iSyndicate is just one of a growing number of companies renting over the Internet rather than buying software. Salesforce.com signed up more than 1,000 customers in its first two weeks in business. It has targeted small- and medium-sized businesses that can't afford client-server programs, as well as divisions of bigger companies.

Ultimately, Salesforce.com wants to add features such as market analysis to grab market share in the Fortune 500 market. Its customer list already includes Excite At Home and Oracle. Larry Ellison, Oracle's chairman and chief executive officer, is an investor in the company.

Salesforce.com's gambit highlights a central debate in the software industry: Do business customers want to switch from buying to renting software, and how quickly will they do it? Major industry players seem to be betting on the Internet: PeopleSoft has come out with eCenter, Siebel Systems has spun-off a subsidiary, Sales.com, and Oracle plans its own site. SalesLogix and Upshot.com are two other up-and-comers in the online sales force automation market.

Salesforce.com chairman Marc Benioff, a one-time Oracle sales and marketing executive, says his company's early success reflects the way the Internet has revolutionized sales force automation. He even commissioned the advertising slogan "The end of software."

"Companies are spending millions on sales force automation and other types of technology, and they are not getting what they paid for," Benioff says. "So, they're turning to the next generation of Internet sites [for] all the same features and functions of traditional enterprise software."

Though Salesforce.com has targeted small divisions of major companies, analysts and industry insiders aren't so sure those companies believe the Internet trend can accommodate their needs in their entirety. "Internet applications work well for small- to mid-sized companies," Lucas says. "I'm unsure whether larger organizations will buy into it."

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