• September 13, 2005
  • By Marshall Lager, founder and managing principal, Third Idea Consulting; contributor, CRM magazine

Salesforce.com's On-Demand Dream

Salesforce.com Chairman and CEO Marc Benioff welcomed more than 3,000 partners and customers to Dreamforce '05 in San Francisco on Monday with a series of announcements, the scope of which expands the capabilities of the company's CRM on-demand product. Benioff also illuminated the possibilities of a new development and distribution model, and introduced enhanced marketing, service, and support modules. And, he commented on the day's biggest CRM industry news, Oracle Corp.'s acquisition of Siebel Systems.

"I was amped to deliver the most exciting announcement in the CRM industry," he said, referring first to Dreamforce '05, "and then I woke up this morning to hear that Oracle was buying Siebel. That made me even more excited. Consolidation in the client/server world opens the door even further for on demand. It's no coincidence that [Ebay] just bought [on-demand VoIP provider] Skype, either. This is an opportunity."

The morning was peppered with announcements of what's to come in Winter '06, including a new UI and branding, expanded mobile support, territory management (demonstrated nicely by an integration with Yahoo! Maps), a marketing campaign builder and segmentation wizard, and the Successforce module for Web services. But the key of this keynote was the debut of AppExchange, described by Benioff as "the Ebay of enterprise applications." AppExchange builds off the development resources available through Appforce (rebranded from Multiforce) to create a one-stop shop for customers to access third-party extensions with a few mouse clicks. When the system comes online as part of the Salesforce.com Winter '06 release some time in Q4 2005, Benioff says, "Customers will be able to find customized apps, read user reviews, test drive them immediately with no charge, and buy subscriptions."

Developers will benefit from free access to the Appforce development platform and the distribution channel, which connects them with interested users who can search and sort the catalog by a variety of methods. The wins for them, according to Benioff, are no software to buy, instant go-to-market ability, and 100 percent of the money goes to the developer. Salesforce will provide some apps free of charge, as will some developers, mirroring the open-source approach that is gaining popularity. To make the concept timely, Benioff noted that immediate and free access to content is especially important when disaster strikes. Part of AppExchange includes crisis management apps, such as the evacuee management system katrinalist.net, and a lost-pet finder developed by Salesforce personnel to aid with the crisis in the three Gulf states effected by the hurricane last month.

Like Ebay and similar services, user reviews and rankings will ensure the quality of what is available, as will Salesforce's seal of approval on certain apps, indicating that they are bug-free and meet the standards of the platform provider. "If we can get this program out there, we'll go to our customers, our developers, other companies. We'll go to Bangalore, to Singapore, to any place where there are creative people, and tell the developers, 'Build your app and we'll help you market and sell it.'"

Liz Herbert, an analyst at Forrester Research, expressed some optimism about AppExchange and Appforce. "Appforce and AppExchange are definitely a good idea. The next step is to make it an effective marketplace. The obstacles to that are setting price and establishing security and certification." One competitor, Greg Gianforte, CEO and founder of RightNow Technologies, expressed a more critical view, however, in a written statement. He asked, "What happened to their enterprise push? AppExchange sounds like something that probably will interest small businesses, and this further establishes that their real focus is on this market."

NetSuite CEO Zach Nelson questioned the value of the move. "There are many reasons why this novel concept, although very creative, will not work in real-world scenarios. For instance, patchwork offerings fall susceptible to crucial issues, such as data synchronization, multiple user interfaces, and problems with integration, support, and maintenance." Nelson said a unified application is better than point solutions. "Salesforce.com did make a direction change with on demand to overcome the inherent flaws of their approach by stitching together applications. It is an easy way out, but it's a nightmare."

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