Microsoft Questions Salesforce.com Growth Prospects
Will the hot CRM vendor be a cloud computing shooting star? Rival exec says R&D investments won't measure up.
One can imagine the growing pains. To drive growth, Salesforce needs to move beyond the software-as-a-service (SaaS) and CRM boxes. SaaS-based CRM was a $2.3 billion market in 2009, according to Gartner. It's a growing market, but by comparison the total SaaS-based enterprise applications market (including ERP and all other apps) is expected to be $8.5 billion in 2010.
Meanwhile, the total cloud computing market (including platforms, services, infrastructure and, I assume, everything else including the kitchen sink) will hit a whopping $68.3 billion this year, according to Gartner stats.
"In order to play in the broader game, Salesforce will have to invest in infrastructure," Park says. "In the future, customers won't want to buy just cloud-based CRM services. They will want to support their total cloud strategy."
The larger opportunity surely compelled Salesforce to stop calling itself a SaaS company last year and to rebrand its offerings as Sales Cloud 2, Service Cloud 2 and so on. The limits of CRM are also behind Salesforce's launch of the Chatter collaboration service/application earlier this year.
"Chatter is Salesforce.com's third attempt to try to sell to somebody other than sales and marketing types," says Brad Mattick, a former Salesforce.com product marketing executive and now senior director of global product marketing at cloud vendor SuccessFactors.com.
Salesforce also has introduced process management, content management and other horizontal capabilities aimed at supporting CRM and a range of custom and vertical applications built on the Force.com platform as a service. But make no mistake. Saleforce.com is still a CRM-centric company, and I'm guessing the majority of apps running on Force.com revolve in some way around customer information. (Perhaps executives are now ruing the day when they settled on "CRM" as the company's stock symbol?)
Where can Salesforce find a deep-pocket partner who can take it into the cloud computing big leagues for the long haul?
The rumor mill frequently pairs Salesforce up with Google. But why does it not surprise me that Salesforce announced on Monday that CEO Mark Benioff will be a keynote speaker at next week's Oracle Open World (reprising his appearance at last year's event)?
With buzz building that another big Oracle acquisition is in the offing, nobody should be shocked if Salesforce turns out to be the next target. Oracle is as much in need of the Salesforce.com's cloud story as the CRM vendor -- er, cloud vendor -- is in need of Oracle's deep pockets.
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