• May 25, 2005
  • By Marshall Lager, founder and managing principal, Third Idea Consulting; contributor, CRM magazine

Sizing Up Salesforce.com's New Partnerships and Product

Salesforce.com pushed farther into the enterprise market Tuesday when it announced strategic partnerships with Accenture and Merrill Lynch, and the release of Customforce 2.0, at a users and partners conference in New York. Taken as a whole, along with positive financial results for the first quarter of FY 2006, these announcements may validate Salesforce's ability to compete with Siebel and SAP in large vertical industries. The new version of Customforce, available as part of the Salesforce Summer '05 release package, includes a number of new functions for which customers have expressed a need. These include real-time analytics and detailed forecasting; customized dependent lists (a concept similar to the ubiquitous Windows Start Menu); spreadsheet-style formulas (both prebuilt and user-definable); and more than 100 ready-to-use business processes like round-robin case assignment, autodialing, and lead scoring. The functions built into Customforce will likely please Salesforce users, but CEO Marc Benioff's selling point at the conference was ease-of-customization. He hauled out a two-foot stack of manuals detailing the knowledge and procedures he said is required to customize Siebel, and contrasted that with the single, 52-page guidebook, Customforce for Smarties, the only documentation needed to "customize Salesforce beyond your wildest dreams." It's possible that the customizability comparison is a straw man, though. Liz Herbert, an analyst with Forrester Research, says many vertical industry organizations prefer to start with a system that already addresses the needs common to their field, "beginning with 80 percent of the solution and then customizing the other 20." In addition, Herbert says that even Salesforce acknowledges this desire on the part of customers, revealing that "Salesforce doesn't start from scratch--they use eight vertical templates and customize building on those." A key announcement Tuesday was Accenture's partnership with Salesforce, wherein the consulting services giant would support and employ Salesforce in its client engagements, customizing it to suit both the individual company and the industry in which it operates. "Previously, a lot of potential customers saw Salesforce as lacking the business process handholding needed for large-scale deployment," Herbert says. "Salesforce doesn't have the industry expertise of Siebel or SAP, so it's smart for them to partner with Accenture to better serve verticals." According to Sanjeev Aggarwal, senior analyst for small and medium business strategies for Yankee Group, "Accenture's closer alignment with Salesforce.com also means an endorsement from a services business of this being a financially viable model for both companies: Accenture can make money in initial integration and customization and ongoing support for large customers." Benioff also announced that Salesforce had successfully closed its implementation deal with Merrill Lynch, capping a suspected 18 months to two years of negotiations. The deal marks a strength in vertical industries for Salesforce, especially in enterprise-level companies. The actual length of negotiation has not been revealed, but most attendees of the conference, including Benioff, characterized the agreement as a very long time in development, especially for a hosted model like Salesforce. "The Merrill Lynch deal," Aggarwal says, "shows that the on-demand model has scalability from SMB to enterprise-class companies and is a financially viable option" even in deployments with large numbers of users. "ML can be productively using Salesforce.com versus a six-plus month deployment cycle and much larger upfront investment for a Siebel on-premises solution," Aggarwal says. While Salesforce has several other customers in finance and other verticals, "it will be interesting if we see more partnerships with large enterprises like Merrill," Herbert says. "Size is the issue, not the industry." Related articles:
SAP Goes Vertical Salesforce.com Gives It All Away
CRM Covers
for qualified subscribers
Subscribe Now Current Issue Past Issues

Related Articles

Salesforce.com's On-Demand Dream

Dreamforce '05: Marc Benioff details visions of 'the eBay of enterprise applications' with Appforce.

Buyer's Guide Companies Mentioned