Can Salesforce.com Make the Dream a Reality?

This week, salesforce.com had its annual conference, Dreamforce 2007, with more than 7,000 attendees and 200 partners. The company highlighted the next steps in its mission to conquer the enterprise applications and platform computing market. Beginning as a software-as-a-service (SaaS) provider for contact management moving to sales force automation (SFA) and then on to a CRM suite in the last 10 years. Salesforce.com and its dyanamic CEO & chairman, Marc Bennioff, are at it again. The company is positioned to take on the vast majority of the broader enterprise applications and platform software market. Directly competing with IBM, Microsoft, Oracle and SAP and others, they are challenging the conventional wisdom of the on-premise approach of purchasing, installing and configuring software across large, medium and small sized organizations. In fact, it is taking on the broader platform market opportunity.At Dreamforce, salesforce.com formally announced its platform as a service called force.com, which enables any organization to build custom applications. In addition, the company announced Visualforce, a value-added visual development environment to enable design and deployment across any platform, including a multitude of browsers and devices. Taking a significant leap forward, salesforce.com is clearly destined to be a different type of technology provider for your organization in 2008.

Not leaving its existing customers behind, the company announced the upcoming release of "Winter 2008" which has incremental features for the marketing, sales and service application. While there's nothing earth shattering in these releases, salesforce.com has a very large ecosystem of partners that fill the holes in capabilities and applications such as sales compensation and incentives. The upcoming content management application dramatically improves the potential to integrate any document into the applications and platform -- a significant need in order to provide immediate access to information created in Microsoft Office or Adobe Acrobat. The customer-facing application called Salesforce Ideas will provide organizations a systematic approach to gain electronic feedback on products and services.

What does this mean for you? salesforce.com is now moving towards a larger market position as a broader platform to help in development of applications in a SaaS approach. While still maturing its CRM applications to meet larger enterprise needs, the company is bringing aboard brand-name customers as validation of its new capabilities. A threat to the larger application providers like Oracle and SAP, salesforce.com is a force to be reckoned with in the market. The question is whether salesforce.com can survive in the larger software market wars and not become stretched into too many software segments, leaving its base while holding first-to- market advantage in SaaS in SFA and CRM. With SAP announcing its on-demand mid-market offering and Microsoft coming forward with a subset of salesforce.com offerings today, there will be a new wave of technology suppliers looking for your budget dollars.

Salesforce.com has anticpated these competitive moves and plans to keep them on the run by leveraging its momentum and partner ecosystem. With brand names like Cisco, Dell, AON, Merrill Lynch and many others in large-scale deployments with salesforce.com, it will be difficult for the on-premise suppliers like Oracle and SAP to get customers to switch to their new offerings. What you buy and where you invest will determine the fate of these vendor strategies. Think carefully as your business performance and processes will depend on your decision.

Let me know your thoughts.

Mark Smith is CEO And Senior Vice President of Research at Ventana Research. Write to him at [email protected].Salesforce.com and its dyanamic CEO and chairman, Marc Bennioff, are at it again. The company is positioned to take on the vast majority of the broader enterprise applications and platform software market. Directly competing with IBM, Microsoft, Oracle and SAP and others, it is challenging the conventional wisdom of the on-premise approach of purchasing, installing and configuring software across large, medium and small sized organizations. In fact, it is now taking on the broader platform market opportunity.