Salesforce.com is going after small companies with this week's introduction of Team Edition, a Web-hosted CRM service for work groups of up to five people. Some of that new business, CEO Marc Benioff hopes, will be customers now using Best Software Inc.'s Act and FrontRange Solution Inc.'s GoldMine, which have dominated the low-end CRM market.

Sheryl Kingstone, an analyst at the Yankee Group, says Team Edition is an ideal service for team collaboration, but some individual users of Act and GoldMine may not be champions of that approach. "Not everyone wants team collaboration, or to share their information on customers," Kingstone says.

Still, salesforce's ASP model could win some converts. It convinced Matthews International Corp., a maker of industrial printers and identification machinery, to choose other salesforce CRM services.

"Our biggest requirement of CRM is [that] it has to be very easy to train our sales force," says Brad Gross, a network engineer at Matthews. "It's a fight when trying to introduce something new like that." Matthews uses salesforce's Professional and Offline Editions for its 51 users. He adds that the ASP model for CRM offers low up-front cost. "We were looking at solutions that [cost] three to four times what salesforce.com was able to offer," says Gross.

Team Edition, which costs $995 for a year, also may appeal to small work groups within large companies looking for a low-cost CRM service that doesn't need budget approval, according to the vendor. Salesforce also sells services for larger work groups at mid-size and large companies.