Salesforce.com Announces Summer '04 Release

The gag was finally removed on Wednesday for Salesforce.com and Marc Benioff, its CEO and founder, as the company exited the mandated quiet period following last month's initial public offering. The company seized the opportunity to combine announcing the release of its Summer '04 edition with its first-ever analyst briefing. Unfortunately, projected fiscal-year profits were well below what analysts had been expecting. The news sent the company's stock tumbling by more than 27 percent; it fell even further in after-hours trading. Salesforce's product news was decidedly more upbeat. The summer release of the company's core product, which Benioff announced at a gathering held at the New York Stock Exchange, touts more than 100 new features, including expanded customization capabilities, improved integration with Microsoft Outlook, a customer self-service portal, and the 2.0 version of the company's Enterprise Edition for large-scale deployments. Those large-scale deployments may have been the most compelling part of Benioff's presentation, as he announced several new customer wins at Fortune 500 firms, including Corporate Express, with 2,000 seats and a plan to expand to 3,000; and Cisco Systems, with an undisclosed number of seats. By Salesforce.com's estimates, the Corporate Express account, along with previously announced deals with ADP, SunTrust Banks, and SunGard, represent the industry's four largest implementations ever of on-demand CRM. In fact, for Sheryl Kingstone, program manager for CRM strategies at The Yankee Group, the fact that Salesforce "beefed up the integration and performance to target larger customers such as Cisco" may be the most impressive aspect of the new release. Asked if Salesforce.com's drive to sign big clients might actually be a drain on profitability, given the more complex nature of the sales cycle, Benioff deflected the implication. "We thought about if we wanted the small, medium, or large customers," he said. "And we decided we wanted them all." Salesforce.com, he said, couldn't work its way up to the tier-one enterprise space without having first earned its credentials in the SMB market. "We have to go after the small to get the large," he said. "[But] you have to have a highly differentiated approach to each." To that end Salesforce signed more than just tier-one clients in the recent quarter. The company expanded its overall client list, bringing its total base to 10,700 customers and 161,000 paying subscribers, as of June 30. Salesforce also announced the 100th member of what it called the sforce solution community. It comprises vendors like Logitech and Sendia that are bringing to market products and software specially designed to operate in conjunction with Salesforce.com's on-demand CRM services, built atop the sforce development platform that the company introduced this past spring. Other members of the sforce solution community include several of the top social-networking firms like Visible Path and Spoke Software, now integrating relationship management capabilities to run within Salesforce.com. In addition, the number of independent developers coding add-ons using the sforce platform is now more than 3,000. Combined, the third-party providers have helped create what Benioff refers to as an ecosystem supporting the core product. Tien Tzuo, Salesforce.com's senior vice president and chief marketing officer, tells CRM magazine that having 3,000 developers essentially conducting research and development by proxy is "the great power of the ecosystem." Kingstone agrees that the expanding development community benefits everyone: "[It's] good for the customer, [and] it's actually a competitive advantage for Salesforce--more options for additional unique problems....Meanwhile, Salesforce focuses on building out the core, such as service and support." Benioff told analysts that the company's ecosystem isn't likely to extend beyond its core strength in CRM into human resources or general ledger applications. In the end, Benioff said, Salesforce.com has no illusions about its identity or the market it serves. "We are what we are, and our results speak for themselves." Related articles:

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