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1/20/2006
05:30 PM
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Salesforce AppExchange Just Became A Bit More Useful

Salesforce.com Inc.'s plan to create an "eBay of applications" has lacked a key element since its unveiling last fall: participation by big-name software vendors. But no more. The hosted customer-relationship-management application company last week said that Adobe Systems, Business Objects, and Skype have enlisted to provide their software to Salesforce's customers through the vendor's AppExchange on-demand marketplace.

As a result, AppExchange, which went live early this month with 160 Salesforce and third-party applications, has the kind of tools large customers demand. "Seeing big companies like that makes it much more interesting," says Laura Parker, business-development process-improvement manager for Kerry Group plc, a $5 billion-a-year food ingredients maker that has a 750-user Salesforce subscription. Parker says she's particularly interested in tapping into the Adobe and Business Objects tools.

Salesforce also is talking up Mirrorforce, a $50 million initiative to replace its older data center with two new ones that went live late last year and beginning next month will be constantly synchronized. CEO Marc Benioff hopes the beefed-up infrastructure will reassure customers that a processor failure that knocked out Salesforce's network for several hours on Dec. 20 was an aberration and ease concerns that Salesforce's network can't scale to support AppExchange and Salesforce's growth.


What's On Demand
AppExchange software from leading third-party vendors

Business Objects Crystal Reports XI
Generates reports combining information from Salesforce apps and other data sources. Available in 2Q.

Create Adobe PDF Online
Create PDFs of Salesforce documents with one click. Priced at $80 per year, per user.

Skype Voice Over IP
Companies can embed VoIP in Salesforce environments for tasks such as launching multiparty conference calls. It's free.

While AppExchange never truly can be the eBay of applications, given that a Salesforce subscription is the price of admission, the inclusion of big-name software developers is a validation of it, says Jason Maynard, a Credit Suisse Securities analyst. And it's likely to generate more interest in AppExchange among other software companies. "If I'm Cognos or I'm MicroStrategy or I'm Hyperion, I say, 'Wait a minute. Business Objects is doing this, so where's my on-demand software-as-a-service BI capability?'"

Tools available on AppExchange are designed for use exclusively within Salesforce environments, but anyone can "test drive" them at the AppExchange site by providing basic contact information. Eighty thousand users have tested AppExchange since it debuted in preview mode last fall, and 1,800 subscribers downloaded apps in the site's first week of operation, Salesforce says.

Benioff touted Salesforce's latest offerings as the arrival of the "Business Web," an on-demand universe of applications and services that companies can use to run their entire operations. During the launch at San Francisco's swanky St. Regis Hotel, Benioff said the ability for users to pick technology components "that weren't made to work together" is something no one else has, including Microsoft, Oracle, and SAP. "They're still on the old model, and that old model isn't as productive for the developer, and it's not as efficient for the customer," he said.

Other Vendors Trailing
Maynard agrees that no other major software vendor has anything to counter AppExchange. Oracle and SAP offer APIs and connectors for integrating their apps with other vendors' software. But he says they're far behind Salesforce even in delivering their own on-demand applications. Microsoft is busily rearchitecting its apps as lightweight Web services for the on-demand market, while Oracle will gain the Siebel CRM OnDemand service through its pending acquisition of Siebel Systems Inc.

Salesforce partner WebEx Communications Inc. is in the early stages of creating WebOffice, an effort to pool interactive multimedia apps whose features can be integrated into WebEx. Salesforce's network, while fine for one-way interactions between information workers and a database, is insufficient to support an application like WebEx, CEO Subrah Iyar says. "The class of applications that can be served from the Salesforce infrastructure is limited."

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