Explaining Salesforce.com to the CEO: Top 5 Payoffs

Last week, we discussed the top 5 misconceptions regarding Salesforce.com, keeping in mind that most of the lessons learned apply to any modern SaaS SFA or CRM system. This week, let's talk about how to explain the business payoffs in terms that business executives want.
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Like any CRM vendor, Salesforce.com has its share of sales messages that may make for good press, but aren't all that relevant to a CEO. Cloud computing. APIs and infrastructure? Though you need to understand those issues as an IT pro, leave that discussion at the door when you go to see the CEO.

Business Payoff #1: Increased sales productivity, improved profitability A properly implemented SaaS CRM system can mean measurable improvements in deal win rates, number of deals completed per sales rep, and higher average sale prices (ASPs). Salesforce.com and other vendors go out of their way to publicize good numbers for each of these metrics.

While there's nothing wrong with these improvements, productivity per se isn't the important part. It won't help your business if the reps get really good at closing money-losing deals.

The bigger impact of a well implemented CRM system is that the reps will be chasing the right prospects, and working on the most profitable deals. The whole point is to find ways of lowering the cost of customer acquisition and increasing customer lifetime value. Hint: this means more upselling, more repeat business, and more business coming from customer referrals.

Business Payoff #2: Better visibility and control You might hear a lot about CRM systems providing a 360-degree view of the customer relationship. Yeah, right, in a perfect world. But let's keep expectations reasonable, and focus on some practical benefits:

1.You can really tighten up the sales forecast, and can get early warning signals if there are pipeline problems.

2. The system provides much more measurability of marketing, sales, customer support. But watch out: there's a danger that you'll measure some things too closely and spook your employees).

3. You can add controls on forecasts and quotes that make it easier to pass Sarbanes-Oxley audits.

4. You can run forecast updates and account reviews almost on the fly.

5. The system can tell you who where the customer problems are, so nobody should be blind-sided by an irate customer call. With SaaS CRM systems, every authorized user in your company worldwide will have real-time access to relevant data.

6. You can use workflow thresholds, alerts and approval cycles to move towards a management-by-exception style. Thanks to MBE and a kiosk model of information sharing, you can expect the number of internal "what's up with this?" emails to decrease (and who wouldn't celebrate that?).

Business Payoff #3: Less waste in marketing, sales John Wannamaker's famous quote, "only half my advertising works I just don't know which half," seems to apply to all marketing activities. But a well-configured CRM system can provide pretty solid measurement of marketing effectiveness, with ROI metrics down to the individual campaign level. While these measurements can never be very precise, they can provide very clear comparative indications of which activities drive revenue and which ones don't. Redirecting your marketing dollars away from the unproductive events can make a big difference in marketing effectiveness.

A well managed CRM system can also provide guidance about prospects that are unlikely to result in profitable sales. Over time, your company can develop a profile of what makes a high-profit customer, and what prospects will be too hard to convert or too stingy on the upsells. By cutting these low-probability and low-yield sales cycles off early, management can simultaneously improve sales productivity and boost morale.

Customer support costs can be expected to decline, particularly if you have Service Level Agreements with penalties. Getting all the customer support reps on the system is step one, integrating the company's telephony system into the CRM is step two, and identifying/analyzing the outlier support situations is the step that helps you get the most out of your customer support team.

Business Payoff #4: Business agility, competitive responsiveness The CRM system will provide you with the metrics and visibility to identify competitive problems and test solutions for best results. While this applies to any modern CRM system, there's another level of agility that applies more to SaaS systems that support Agile methods in IT.

Think of your CRM system not as a hard-and-fast application, but instead as a toolkit or framework with a user interface and APIs. Since business agility comes from being able to identify and adapt to the unexpected, a CRM system which is very extensible (modular, flexible, with lots of available add-ons) will be essential to your company's responsiveness over time.

Paradoxically, systems that are functionally rich "cradle to grave" solutions are seldom sufficiently adaptable later on. Because business requirements move very fast in sales and marketing, the ease of de-commissioning an obsolete function to make room for new business rules is an area you should evaluate.

Business Payoff #5: Make your priciest business process more reliable Typically, the highest paid people in the company will be in sales. Yet the company's most unreliable business process is revenue generation. This unreliability shows up as lame marketing, erratic forecasts, one-off contracts, excessive discounting, rocky customer satisfaction ratings, weak profitability, and other issues. You wouldn't let your factory's production line be that unreliable. It's time to make your revenue process a consistent, predictable engine.

Any company that has not set up their CRM system to thoroughly instrument their marketing and sales process is running on gut and guesswork. Solving any of the problem areas listed above begins with identifying the problem areas, testing of proposed solutions, and enforcing of compliance to improvements-all through the data, analytics, and workflows of the CRM package.

Caveat: Nothing comes for free Salesforce.com, like any CRM system, is no "point and shoot" miracle. You need to do a lot of work in data cleanup, system integration, and process improvements to enable the business impacts described above.

Further, all those business advantages happen when real users really use the system, because the data the system holds is far more valuable than the system itself. The CEO needs to know that if he or she wants this level of business results, the company is going to have to spend a lot of effort in getting users to adopt the system as a natural part of the way they do their job. If users view SFDC as a tool for executives to micro-manage the worker bees, there will never be the level of usage needed to achieve these business results.

For more on how to get users to enthusiastically adopt SFDC, check out Chapters 4, 5, and 6 of my book, Salesforce.com Secrets of Success.

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BY David Taber
Source：CIO

David Taber is the author of the new Prentice Hall book, "Salesforce.com Secrets of Success" and is the CEO of SalesLogistix, a certified Salesforce.com consultancy focused on business process improvement through use of CRM systems. SalesLogistix clients are in North America, Europe, Israel, and India, and David has over 25 years experience in high tech, including 10 years at the VP level or above.

Copyright CXO Media Inc., 2009. All rights reserved.

Salesforce's Force.com Platform, Demystified

When online security firm Websense needed to extend an internally-developed tool for creating customer quotes, CIO Jim Haskin was faced with a choice: Continue to build the system in-house or move application development to a third-party service.
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Haskin chose the latter option and, in less than two months, created a complex tool to allow Websense employees to manage and track quotes. His platform of choice: Force.com, Salesforce.com's foray into cloud computing. The reasons for the choice "are fundamentally very aligned with why you would go to Salesforce in the first place," Haskins says. "If you buy into the software-as-a-service concept, and you have decided that Salesforce.com can meet your needs, a similar line of reasoning applies to extending that platform."

The company created the application faster and at a lower price than it would have cost for in-house development and maintenance, Haskin says. Moreover, the lack of ongoing headaches is a big advantage for IT managers, such as Haskin.

"If there is an outage in the middle of the day, not only does no one call me, but I don't have to call them," he says. "On the other hand, when the e-mail server goes down, or something internal happens, the phones are ringing off the hook."

Introduced in 2007, Force.com is a platform that allows companies to create online applications that allow outside partners, salespeople, franchisees and branch offices to access and manage customer data.

Known in cloud-computing lingo as a platform-as-a-service (PaaS), Force.com makes the jobs of IT managers like Haskin easier by simplifying development and eliminating infrastructure headaches. Salesforce.com, best known for its customer relationship management (CRM) system, boasts that companies who use Force.com, on average, create applications five times faster at half the cost.

Hotel and casino owner Harrah's Entertainment built three Force.com applications that allow its sales people and customer-service representatives to reserve seats on private flights, access room reservations and manage important customers' trips to Harrah's properties. Pizza franchise Papa Murphy's uses the platform-as-a-service to allow its business groups to keep track of the health of the company's 900 stores. Overall, Salesforce's 55,000 customers have built more than 100,000 applications using Force.com, says Ariel Kelman, senior director of product marketing at Salesforce.

"I think for most of our customers, they don't look for a tipping point in terms of technology, but what type of applications are the best fit for their enterprise," Kelman says.

By focusing on making the technology more efficient, Salesforce has been able to keep costs low, Kelman says. Perhaps the companies biggest efficiency advantage is its focus on multi-tenancy, allowing a single application to serve multiple customers yet partition their data securely into virtualized spaces. Salesforce.com has pushed the efficiency of its multi-tenant systems in its data centers higher every year, according to a whitepaper on the technology penned by the firm.

"The shared architecture is able to run at a much higher level of server utilization in our data centers than our customers would be able to run," Kelman says. "That allows us to offer much more at a lower cost."

Salesforce.com has also focused on security, a frequent sticking point for cloud services. The company has had to satisfy the concerns of its largest customers by adopting strict security measures, from which even its smallest customers then benefit.

"Every time that these companies do an audit of our technology and we get advice, we make our security better," Kelman says. "All of our 55,000 customers get that benefit."

Pushing new features out to all customers is a business model that partially drives the success of cloud services. In addition to better security, Salesforce.com has focused on creating other significant features. In March, the company announced that it would offer applications on the Force.com platform that allow companies to communicate with customers and employees using the major social networks, such as Facebook and Twitter. (For more detail, see "Why Salesforce.com's Social Media Smarts Could Get You Closer to Customers.")

Already, Websense is looking at how to expand their use of Force.com. Soon the company plans to allow its partners to use its custom quote tool, something that would be very difficult to implement in a roll-your-own-solution. Down the road, the company expects to develop addition applications as well, says CIO Haskin.

"There are a bunch of applications that we are considering internally," he says. "The question becomes, does it make more sense to put it here (inside the company) or put it on Force.com."

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BY Robert Lemos
Source：ITWORLD

© 2009 ITworld. All rights reserved.

Explaining Salesforce.com to the CEO

At your executive staff meeting, the sales and marketing VPs have been squabbling about the need for a real CRM system, and the discussion turns to Salesforce.com. The CEO asks for a briefing on the alternatives tomorrow, and he's looking to you for objective but convincing guidance-in terms he can understand.
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Like any hot product category, CRM systems vendors have developed a lot of hype, leading to misconceptions that can lead to bad customer decisions. This two-part article will focus on Salesforce.com, but most of the lessons learned apply to any modern SaaS SFA or CRM system.

The CEO's most dangerous misconceptions (which may be shared by the sales and marketing VPs) won't be about Salesforce.com itself, but about how it should be deployed and used. Because an SFA or CRM system without relevant, up-to-date information is just an empty shell, the value of the system comes from the customer data it holds. And that comes from active, happy users. So we have to start there.

Misconception 1: Buy the software, and sales results improve in a few weeks.

Every misconception has some kernels of truth. Salesforce.com is a very well executed SaaS application, so it is "instant on." A good system implementer can get the system configured for initial usage in 6 weeks. But if turning on the system is all you do, users will not just jump into it. Your SFA system will likely be a barren wasteland of data.

Instead, the executives need to work on a campaign of change management, promoting the benefits of system usage to the users. Your key users are sales guys: sell them on how it's going to make them more money, prevent wild goose chases and time wasters. As an executive, you must consistently show you've drunk the kool-aid-using the system to communicate to reps (instead of firing off e-mails directly to them) and understand account situations (before picking up the phone).

Misconception 2: Salesforce.com usage can be simply mandated.

Any CRM system needs to have executive championship from day one. The whole organization must believe that the success of the CRM system is important to the executives, and is a key success factor in the company achieving its goals. But championship is not the same thing as a top-down mandate, which will generate user skepticism or even outright resistance.

Instead, get grassroots support. Make the system inherently valuable to the users: save them five minutes a day, or let them out of a chore, or prevent a hot lead from falling through the cracks.

Since CRM usage means behavioral change, every time you're asking the sales reps to do something new, give them some new benefit. It doesn't have to be much-sometimes just eye-candy or a clever button to save a few keystrokes-but there has to be some advantage for them. Otherwise, the system will represent a tax on the user-and will be about as popular as a tax increase.

Misconception 3: Salesforce.com is a glorified contact manager, with lots of metrics to help executives monitor sales reps.

The kernel of truth here is that Salesforce.com is too often used only as a web version of Act or Access, and that is an enormous waste. But the core of this misconception is that an SFA system is an executive tool for closely monitoring rep activity-and that is an enormous tragedy. If the sales team believes that Salesforce.com is there to spy on them and will be the basis for micro-management, the system will be still-born.

Instead, think of SFA as standing for "Sales Funnel Acceleration"-something that the rep wants so he can get a bigger commission check. Salesforce.com is uniquely effective almost anywhere along the SFA to CRM spectrum. Of course the system has lots of metrics and can easily generate reports on rep activity. But focus on how the system increases revenues-a positive for everybody-rather than measurement and activity management, which will seem punitive to some users.

Misconception 4: SaaS CRM's initial lower costs ahould sell you.

Salesforce.com has low initial procurement costs, like any subscription software. You could buy user licenses only as you need them. Know that Salesforce.com is not the cheapest SaaS CRM vendor (careful, you get what you pay for!), and that SaaS vendors are not able to discount as deeply as on-premises software vendors. But initial procurement costs are not the right way to evaluate CRM packages in any case.

Instead, focus on TCO and delivered value over a 3-year period (no longer!). SaaS CRM system procurement, deployment, and operational costs are lower than on-premises equivalents. But the costs of integration and data cleansing-often a much larger factor-are not much different between SaaS and on-premises. While the TCO of SaaS CRM may be lower, the key is to buy the system that will have the biggest impact on your business results. That doesn't mean "a bigger system"-more on this in part 2 of this article.

Misconception 5: The best way to deploy Salesforce.com is "big bang" style.

Get all the critical features ready and tested for all users before you roll out. Sounds logical enough, but couldn't be more wrong. While you do want to have key features fully tested before you go live, you don't want to deploy all the high-value (read: high-risk) features, or even bring up all the users, at once. Going down the big bang path is to repeat the mistakes of traditional enterprise software, with the similar legacy of delays and cost over-runs. Further, a big bang release strategy undermines system credibility.

Instead: start small, think incremental. Deliver something of value to the business every 6 weeks, gradually on-boarding more users as system credibility grows. Release the high-risk functionality on top of a stable base of "easy features" that have been running for a while. For more on how to sequence features across user groups, departments, and foreign operations, take a look at Chapter 4 of my book, "Salesforce.com Secrets of Success."

Next time, we'll be looking at the 5 things your CEO needs to know about the real business benefits of a well executed CRM system.

David Taber is the author of the new Prentice Hall book, " Salesforce.com Secrets of Success" and is the CEO of SalesLogistix, a certified Salesforce.com consultancy focused on business process improvement through use of CRM systems. SalesLogistix clients are in North America, Europe, Israel, and India, and David has over 25 years experience in high tech, including 10 years at the VP level or above.

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BY David Taber
Source：CIO.com

Copyright CXO Media Inc., 2009. All rights reserved.

Salesforce releases mobile cloud device

Salesforce has announced the release of an innovative new product, which allows businesses to access it flagship application from handheld devices.
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The introduction of Mobile Lite, which is compatible with the iPhone, BlackBerry and Windows Mobile devices, offers customers of the software-as-a-service provider admittance to its customer relationship management (CRM) product in any location.

Specifically, Salesforce CRM can improve businesses' data quality and manage client relationships and work loads.

Marc Benioff, chairman and chief executive of Salesforce, said: "By delivering mobile access to our cloud, for free, we're accelerating adoption of the cloud and delivering value to customers in times when they need it the most."

Earlier this month, Salesforce revealed that it would be teaming up the popular micro-blogging site Twitter with its CRM program to give customers the opportunity to 'tweet' to their clients.

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BY David Weir
Source：QAS-Experian

Salesforce.com - Twitter integration could spell privacy fears

In March, CRM vendor Salesforce.com announced its Service Cloud would be integrated with Twitter this summer to help companies gauge brand reputation. But experts warn of potential privacy concerns among the Twitter community.
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Salesforce.com Inc.’s announcement that it will integrate Twitter into its Service Cloud offering may be a great way to ascertain brand reputation, but experts warn of "Big Brother" fears among Twitter users.

The San Francisco-based company will release, this summer, its customer relationship management (CRM) tool for Twitter, which will allow companies to perform keyword searches in the social networking platform. The idea is that companies can assess sentiments regarding their products or services, pull that data into their CRM, and even perhaps identify the user who made the comments.

But there is the potential the community will raise privacy concerns, said Aphrodite Brinsmead, New York-based customer interaction technologies analyst with research firm Datamonitor. “If people using Twitter know that someone is pulling every single last word they say like a Big Brother scenario, people might be a bit more wary about what they’re posting,” said Brinsmead.

Another potential issue is the value of information circulating on Twitter. The fact that Twitter entries are limited to 140 characters, said Brinsmead, means that “users might not necessarily be able to explain in full what their problems are.” Adding to that is the identity of Twitter users and the validity of the entries can also come into question, she said.

According to Chris Fletcher, research director with Boston, Mass.-based AMR Research Inc., one concern with a platform like Twitter is the sheer volume of Tweets produced. “The support team could also find itself inundated as conversations on a product multiply exponentially,” wrote Fletcher in a white paper following Salesforce.com’s announcement of its use of Twitter.

But the degree to which a company will find information reaped from Twitter useful will really depend on the individual company, said Warren Shiau, senior associate with Toronto-based consulting firm The Strategic Counsel. Shiau explained his point using the example of a car manufacturer seeking customer sentiment by trolling bulletin boards dedicated to particular makes of cars. “It was an avenue that was fairly easy to get data from because the site was dedicated to that manufacturer or model,” he said. “But Twitter is not dedicated.”

But the ability to identify prospects among the Twitter community is another useful, and perhaps unspoken, objective of the integration of the social networking platform, said Shiau. Echoing Brinsmead’s suggestion of Big Brother fears, Shiau said, “that is the side that isn’t necessarily so much publicized because people always become uneasy when a social networking-type application or platform starts to be used for marketing purposes.”

Shiau can’t say whether remaining mum on the topic is intentional on the part of Salesfore.com, but the company is choosing to play up the customer service side of the offering.

Brinsmead said Salesforce.com’s integration of Twitter into its Service Cloud offering will likely ignite a stronger interest among the major CRM players – Redwood City, Calif.-based Oracle Corp. and Walldorf, Germany-based SAP AG – who have begun to consider social networking sites but “have so far been more tentative.” For instance, Oracle offers enterprises the option to publish information from its CRM OnDemand tool to Twitter, and SAP released its Business Suite 7.0 with a reputation engine that trolls social networking sites like Twitter.

“They will look for ways to pull information and integrate it and watch what Salesforce is doing,” said Brinsmead.

That said, Shiau thinks other CRM vendors will be limited to the larger social networking sites “simply because there is a question of exactly how much relevant content or data you can get out of it.”

But social networking tools like Twitter, Facebook, wikis and blogs should definitely be considered by businesses as customer interaction channels, wrote Fletcher, because “to provide competitive, top-quality customer service, the onus is on companies to be nimble in their adoption and integration of new social media channels.”

And, he continued, newer CRM architectures and delivery models are certainly making this integration easier.

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BY Kathleen Lau
Source：itWorld Canada

©2009 ITworldcanada.com All rights reserved.

Salesforce.com Sees Its Next $1B Market

Salesforce.com, the $1 billion vanguard of the software-as-a-service (SaaS) industry, is betting its next $1 billion in revenues will come from disrupting the call center industry.
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The company that declared death to on-premise software with SFA, its flagship on-demand customer relationship management (CRM) tool, and which has built an entire ecosystem of SaaS offerings around its AppExchange platform, is at something of a crossroads.

Salesforce.com is the first SaaS vendor to generate $1 billion in sales, most of that generated by SFA, and a smaller percentage by its ecosystem. However, Salesforce.com will be hard-pressed to maintain its growth in the largely tapped-out SaaS CRM market, as my colleague Larry Dignan at sister-site ZDNet points out.

Salesforce.com’s answer is a customer service tool that it see as the logical extension of CRM. Just as it disrupted the enterprise software market with SaaS, it plans to disrupt the call center market with the Service Cloud, which it introduced in January, along with integrations with Facebook and Google.

Today, it’s announcing an integration with Twitter.

The idea is that call center agents can monitor conversations about their products on social networks like Facebook, Twitter and on Google, and offer consumers help by pushing content from their corporate knowledge bases.

Granted, though, it sounds creepy to imagine that you could be griping about your Dell laptop on Twitter and have Dell pop up saying “@Mike have you checked to make sure your power cable is plugged in?”

But Salesforce.com is eyeing a market with potentially explosive growth. Alex Dayon, senior vice president of customer service & support at Salesforce.com, told me the market represents a $3.4 billion opportunity.

Dayon was formerly CEO of InStranet, which Salesforce.com acquired in August 2008. According to Salesforce.com’s recent 10-K, InStranet “offers a knowledge management application for business to consumer call centers.”

Dayon told me that Salesforce.com grew 52% in this market in 2008, from around 2,500 customers to over 6,800 today. That’s still a needle in the haystack of the company’s total 55,400 customers (representing 1.5 million actual users), but you can see why the market has Salesforce.com salivating.

Salesforce.com would be going up against many of the usual enterprise software suspects–Remedy, Oracle (via the PeopleSoft and Seibel applications) and Amdocs. But Dayon told me, “it’s more of a green field, it’s a replacement market.”

According to Dayon, Salesforce.com’s customers are looking to refashion their approaches to customer service because they realize that current call center operations leave a lot to be desired, and that 50% of customer-service related questions have migrated to Google and other community sites. “Soon, two-thirds of those interactions are going to be in the cloud,” Dayon said.

The Service Cloud includes a dashboard that is intended to help companies overcome the poor experience of siloed voice, Web and e-mail customer service applications they offer frustrated consumers. But the real hook is the ability to proactively find conversations in the cloud and appear with a solution like Johnny-on-the-Spot.

Of course, there are almost as many ways this could go wrong as there are potential customers. Companies like Starbucks, Dell and Comcast, which are current customers of the Service Cloud, may suffer a backlash if consumers see this activity as intrusive.

Their experience with outsourcing call centers overseas certainly taught them that U.S. consumers will hang up if they hear a foreign-sounding accent and call again and again until hearing an American-sounding one. Each of those calls costs money and resources, more than offsetting any savings that outsourcing was to have produced.

There’s every reason to believe that if consumers are as unhappy with this social approach, they’ll find make it equally painful for Starbucks et. al.

And based on a on search on the word “Dell” which I ran on March 22, I’m not convinced that customers of the Service Cloud get the social Web. In response to one Tweet, a Dell rep responded, “glad to see your tweet. We’ll keep you up to date on all the great deals in the Dell Outlet.” More marketing messages is the last thing consumers want or expect when they use Twitter.

Worse, the one serious customer service issue about Dell on Twitter that day (”OSX on a Dell Latitude D630 but cant get wireless at all: I installed iATKOS on a partition of this laptop…”) has gone unanswered. Granted, it’s a tough one, but people can answers to simple questions off the packaging. If this cloud-based customer service is going to work, it’s going to have to provide answers to complicated questions.

Meanwhile, Twitter users already seem annoyed: “i don’t understand peoples fascinations [sic] with making twitter accounts that only say “win a dell computer” or “I LOVE MY NEW LAPTOP.”

Dell and others will create the opposite effect of what they’re looking for if they don’t approach the social Web on its own terms, and that in turn will have an adverse effect on the Service Cloud that Salesforce.com is counting on as its next-gen growth engine.

Another potential pitfall is the quality and relevancy of results returned by the search technology used by Twitter, Facebook and even Google. This, of course, puts a new light on Twitter’s recent focus on search (it announced the acquisition of search engine vendor Summize in February and introduced a search function earlier this month), but doesn’t give me any more confidence in its efficacy for this purpose.

You can easily see call center agents finding too many false positives for it to be worth their while.

Salesforce.com will officially introduce the new service today with customary fanfare, including a keynote by CEO Marc Benioff at the Sheraton in New York. I’ll be there, and I’ll try to see how Salesforce plans to address those potential pitfalls.

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BY Michael Hickins
Source：BNET

© 2009 CBS Interactive Inc. All rights reserved.

Salesforce sees cloud’s silver lining

Cloud computing is good business for Salesforce.com, which is faring b et t e r than many of its more traditional counterparts in a shaky economy.
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While the credit crunch saw many traditional software companies miss their latest quarterly targets, Salesforce.com reported 34 per cent year on year growth in its last quarter and reachedUS$1billion in revenues in the last fiscal year.

It was the first enterprise cloud computing company to achieve this level of turnover, and one of only about 25 software companies ever to do so. The reason is simply that CRM, as soon as it is installed on a computer’s hard drive, can now be accessed online. As Dr Steve Garnett , EMEA chairperson for Salesforce.com, sees it, Google has changed the world. Garnett said companies realised that there was no need to own the infrastructure their software runs on.

The result, he said, was the unprecedented migration away from traditional CRM software in favour of CRM on demand - or ‘‘as-a-service’’.

‘‘People are happy to use the likes of Yahoo!, eBay, Google and Amazon for personal transactions, where the technology is hosted online. There’s no reason business applications like CRM can’t be as simple to use as customer applications,” said Garnett.

It is estimated that, for 80 per cent of companies, IT budgets mainly go towards maintenance. Describing this figure as ‘‘frightful’’, Garnett said that accessing software packages online, as a managed service, allowed companies to bypass their own IT departments.

Using the cloud computing model, small companies can leverage the power of CRM in the same manner as a large multinational. Cost-saving and reduced complexity are the biggest advantages of accessing CRM applications online.

Since the onset of the global recession, Garnett said companies had refocused their efforts to retain existing customers, improve sales effectiveness and use technology to create new products and services.

‘‘When times are hard, you want to hang on to your traditional customers. You want to be cross-selling to them and getting as much value out of them as possible,” he said.

‘‘Companies are also turning to improving their sales efficiency and effectiveness. If, out of ten sales prospects, they used to close five, how do they increase that to six or seven?”

Information about customers, captured by a CRM package, can be of immense value - possibly more so in a recession where people need every incentive to spend.

‘‘It is important for sales to have visibility of customer service records. If you’re a salesperson and you’re about to call on a customer, it is worth checking that they don’t have 27 outstanding problems that haven’t been fixed,” said Garnett.

‘‘If a customer calls up with a problem and your company has a million-euro opportunity on the table with them, access to up-to-the-minute CRM data can alert you to this and you might prioritise resolving the existing problem in your workflow as a result.”

A big focus for Salesforce.com in the future will be the integration of sales and customer service. The company has already launched what it calls the Service Cloud, an application that enables customer service organisations to join and manage customer service conversations online.

The Service Cloud is built on the firm’s Force.com development platform and, through deals with internet giants like Google, Facebook and Amazon.

com, it enables customer service businesses to capture every conversation that takes place online.

Salesforce.com predicts that, in the future, more than two thirds of all service conversations will take place in the cloud.

This focus on cross-collaboration between customer service agents and salespeople is also central to Salesforce CRM Spring ’09, the company’s recently released CRM package, which has been updated with more than 50 new features.

Clients can also build their own custom applications on the company’s Force.com platform, a recent trend in the field, according to Garnett.

‘‘Our customers are now starting to use our platform to build their own apps. We thought: ‘If we can build a billion dollar business in the CRM space, what about all the other areas where we don’t have industry expertise or intellectual property, for example supply chain management, asset management, human resources, talent management and so on?’,” he said.

‘‘What we decided to do was externalise the tools we used to build Salesforce.com, and allow our partners and customers to build their own applications. Thousands of applications are popping up, created by our customers, and extended to cover any areas within their businesses.”

Cloud computing will dominate in the months ahead, as more companies see the value in leveraging the internet to build applications and websites and interact with their own customers.

‘‘We’re seeing that really explode,” said Garnett. ‘‘There’s huge momentum around custom development on Force.com. It’s a massive market that spans all industries.”

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BY Niall Byrne
Source：THE POST.IE

© Post Publications Limited, 97 South Mall, Cork. Registered in Ireland: 148865.

Salesforce.com Celebrates 10 Years of Customer Success

Ten year anniversary of The End of Software marks a decade of enterprise cloud computing

Company thanks the 55,400 innovative customers behind the cloud computing revolution

Salesforce.com Foundation celebrates 10 years of its 1/1/1 philanthropy model and helping 5,200 nonprofits around the world better serve their missions

21st century business leaders and customers recognize this major cloud computing milestone.
##CONTINUE##
Salesforce.com [NYSE: CRM], the enterprise cloud computing company, today celebrates the ten year anniversary of its founding, and with it, ten years of customer success. A decade ago, salesforce.com was founded with a bold vision for The End of Software. Today, the company’s cloud computing model has enabled new levels of success for more than 1.5 million net paying subscribers at 55,400 companies around the world, and spurred a new industry of SaaS providers.

"I’d like to thank our customers, who have created an unprecedented record of success and inspired our best innovations" said Marc Benioff, chairman and CEO at salesforce.com. "There’s only one way to describe this past decade: The End of Software. As we look forward to the next decade, we see not only applications, but also platforms running in the cloud. The age of enterprise cloud computing is here"

Ten year anniversary recognition from 21st century business leaders and customers
Nicholas G. Carr - "Congratulations on leading the "big switch" to cloud computing"

Michael Dell, chairman and CEO of Dell and salesforce.com customer - "Salesforce.com has brought a fresh wave of innovation to the enterprise software industry and companies around the world. We have a real appreciation for companies that understand and help develop the huge power of the Internet"

Gavin Newsom, San Francisco Mayor - "Congratulations salesforce.com. As the second largest private sector employer in San Francisco, we applaud your company’s success and commitment to the city"

Eric Schmidt, chairman and CEO of Google and salesforce.com customer - "We’re proud of the rich history Google has with salesforce.com, from our common vision for corporate social responsibility to the work we do together to bring the power of cloud computing to business. Here’s to the next 10 years"

Ten years of customer success
Salesforce.com was founded in 1999 with a vision for three new revolutionary models: A new technology model where customers access business services via the cloud rather than buying and installing software; a new subscription-based business model where customers pay as they go; and a new 1/1/1 integrated corporate philanthropy model, where 1 percent of the company’s people, product and equity are given back to the community.

From early customers such as Cars.com and Egencia, an Expedia Inc. Company, to today’s corporate enterprise license agreements with Dell and others, salesforce.com’s 55,400 customers and 1.5 million net paying subscribers represent the benefits of the cloud computing model for companies of all sizes across all industries.

"As one of salesforce.com’s long time customers, we can attest to the benefits of cloud computing" said David Corken, vice president of operations, Cars.com. "It’s hard to remember life before salesforce.com"

Ten years of The End of Software
The cloud computing industry has experienced exponential growth over the past 10 years. In March 2005, IDC estimated the worldwide SaaS market at $4.2 billion in 2004. In December 2008, IDC predicts the market to reach $19.8 billion in 2012 (1) .

"Today IDC estimates that there are more than 1,000 worldwide SaaS providers and more than $33 billion has been invested in SaaS providers globally" according to Robert Mahowald, Director of SaaS and On Demand Research at IDC. More than $600 million in venture capital funding has been invested in companies that have posted applications on the Force.com AppExchange alone.

"Salesforce.com’s vision 10 years ago for ’The End of Software’ has been instrumental in bringing cloud computing to the forefront of the enterprise software market" said Bruce Richardson, chief research officer, AMR Research.

Ten years of cloud computing milestones:

* 1999 Salesforce.com and its Foundation founded - The End of Software begins
* 2000 Salesforce.com launches its first SFA solution
* 2001 Salesforce.com launches its first CRM solution
* 2002 Salesforce.com launches Enterprise Edition
* 2003 Salesforce.com launches Sforce, the world’s first publicly available enterprise cloud computing API
* 2004 First 1,000 subscriber customer - Sungard
* 2005 Force.com AppExchange launches
* 2006 First 15,000 subscriber customer - Cisco
* 2006 Salesforce.com launches Apex, the world’s first cloud computing programming language
* 2007 First 50,000 subscriber customer - Japan Post
* 2007 Hits 1 million net paying subscribers and 100 million transactions a day
* 2007 Salesforce.com launches Force.com development platform
* 2008 Force.com wins a Wall Street Journal Technology Innovation Award
* 2009 First enterprise cloud computing company to reach $1 billion in annual revenue
* 2009 Ranked the #3 fastest-growing technology company behind Google by Forbes
* 2009 1.5 million net paying subscribers
* 2009 First 75,000 subscriber
* 2009 100,000 custom applications built by 124,000 developers on Force.com

"We’re humbled by how far the industry has come over the past 10 years" continued Benioff. "We believe the next decade will be driven by the low costs, low risks, and fast returns of cloud computing. We look forward to seeing where our customers lead us"

Ten years of integrated corporate philanthropy
Along with the company, the Salesforce.com Foundation was founded 10 years ago with a pioneering vision for a new type of corporate philanthropy in which all of a company’s resources and assets contribute to its communities in order to make a deeper impact than traditional corporate philanthropy. This vision was formalized into salesforce.com’s distinctive 1/1/1 Model, which has served as an inspiration to other companies in developing their philanthropic programs and brought the power of cloud computing to nonprofits around the world. As salesforce.com has achieved success, the Salesforce.com Foundation has grown commensurably.

Salesforce.com’s 1/1/1 Model has achieved the following over the past decade:

* 1% Time - Salesforce.com employees have given more 125,000 hours of their time to volunteer in their communities.
* 1% Product - More than 5,200 nonprofits in 60 countries have received donated and discounted Salesforce CRM licenses to help them be more effective in their missions as part of the company’s 1% Product Donation Program.
* 1% Equity - When salesforce.com went public in 2004, 1% of its equity was set aside for the Foundation. Today more than $13 million in grants have been distributed to organizations around the world such as Kiva.org, Room to Read, Transfair, U-Turn Homeless Ministry and World Toilet Organization.

"Salesforce.com’s innovative models for philanthropy and cloud computing are revolutionary for the nonprofit community" said Justin Ricketts, CIO at Susan G. Komen For the Cure. "We congratulate the company on its commitment to making philanthropy such an integral part of its organization from its beginning 10 years ago"

Salesforce.com 10 Year Anniversary Promotional Offer
Salesforce.com’s customers are the foundation of the company’s success. In celebration of its anniversary, salesforce.com is thanking its customers with a gift of free subscribers to help them expand their success with salesforce.com with either Salesforce CRM Customer Service and Support or the Force.com platform. For more information, please go to http://www.salesforce.com/10th.

-----------------------------
BY N/A
Source：WebWire

WebWire® 1995 - 2009.

Salesforce.com squeezes $1B from the cloud

Salesforce.com showed Wednesday that cloud computing can produce serious money--but also that it's not immune from the current unpleasant economic climate.
##CONTINUE##
For its fiscal 2009, which ended January 31, the San Francisco-based company reported revenue of $1.08 billion, a 44 percent increase. But for fiscal 2010, it lowered its forecast to a range of $1.3 billion to $1.33 billion.

In November, the company had forecast $1.35 billion to $1.36 billion, and analysts surveyed by Thomson Reuters expect on average $1.325 billion for the year.

"We've slightly lowered the guidance range. There's increasing uncertainty out there," Chief Financial Officer Graham Smith said on the company's conference call.

For the company's fourth quarter, Salesforce.com reported net income of $13.8 million, or 11 cents per share, on revenue of $290 million. That compared with $7.4 million net income and $217 million revenue for the year-earlier quarter, and it was better than the 7 cents per share on $285 million in revenue analysts expected.

In after-hours trading, Salesforce.com's stock rose $1.50, or 5 percent, to $29.60.

Salesforce.com's core service lets customers track and analyze customers activity; its online approach also features alliances with some other high-profile Internet sites, including Amazon Web Services, Google Apps, and Facebook.

The company competes chiefly with Oracle's Siebel software for customer relationship management, which typically is run on massive computers a company runs on its own.

Salesforce.com has been branching out, though, offering its Force.com system to let companies build their own custom Web-based applications or third-party programmers offer their own extensions to those customers. And in December, the company launched Force.com Sites to house customer's Web sites.

In the fourth quarter, Salesforce.com's technology overall completed more than 12 billion transactions, the company said. The total of more than 1,500 Force.com Sites received more than 15 million page views in the quarter, and there are 166 applications available in the Force.com AppExchange.

"The numbers for the fourth quarter clearly demonstrate increasing adoption of the force.com platform," Chief Executive Marc Benioff said in the conference call.

-----------------------------
BY Stephen Shankland
Source：cnet

Stephen Shankland covers Google, Yahoo, search, online advertising, portals, digital photography, and related subjects. He joined CNET News in 1998 and since then also has covered servers, supercomputing, open-source software, and science. E-mail Stephen.

©2009 CBS Interactive Inc. All rights reserved.

Salesforce forecasts a 'cloudy' Spring

Salesforce.com has rolled out the latest version of its hosted CRM platform.

The company said that while the Spring 09 update to the service will sport more than 50 updates, much of the attention went to the customer service and sales elements of the CRM offering.
##CONTINUE##
Known as the "service cloud" and "sales cloud," the new services will beef up a CRM offering that the company considers to be of increasing importance.

Al Falcione, director of product marketing for Salesforce.com, told vnunet.com that his company thinks managing and maintaining relationships with customers could be a deciding factor in whether companies can come out of the economic crisis.

"It is a big release for us," said Falcione.

"CRM has become more important than ever in the market."

In the 'service cloud', the company is hoping to increase the use of multiple web sources, such as search engines and social networking services to provide customer service and support by way of built-in applications for the sites on the Salesforce CRM service.

This, said Falcione, is aimed at easing reliance on call-centers both for customers and businesses.

In the 'sales cloud,' the company has taken a new approach to the way that it allows users to organize and share data.

The new service will introduce the ability for salespeople to search and tag both presentations and multimedia files regarding a specific client or product and then share the packaged materials on a single website, thus removing the need to send large bundles of files to recipients and allowing multiple forms of content to be presented within single URL.

Additionally, the Spring 09 release will offer the 'opportunity genius,' a feature which categorizes past and current business deals, allowing sales staff to compare notes and share ideas.

Salesforce hopes that the update will allow it to thrive in what chief executive Marc Benioff predicts to be a banner year for hosted services.

"This is the year of cloud computing for the CRM industry and salesforce.com is the undisputed leader," he declared.

"Salesforce.com is helping companies grow their business without growing costs by delivering a cloud computing solution for customer service and sales."

-----------------------------
BY Shaun Nichols, San Francisco
Source：vnunet.com

© Incisive Media Ltd. 2009 Incisive Media Limited, Haymarket House, 28-29 Haymarket, London SW1Y 4RX, is a company registered in the United Kingdom with company registration number 04038503.

Trouble at Salesforce.com?

Steve Cakebread, president and chief strategy officer at Salesforce.com, has resigned, and reports say two top vice presidents have also left the company.
##CONTINUE##
Is there trouble in the house that Benioff built? Salesforce.com's president and chief strategy officer, Steve Cakebread, has resigned and reports say two other vice presidents have also left the fold, possibly in layoffs.

In a filing with the U.S. Securities and Exchange Commission on Feb. 5, the SAAS (software as a service) provider founded by CEO Marc Benioff said Cakebread resigned from the company to "pursue other professional opportunities." Cakebread joined Salesforce.com in 2002 and served as the company's chief financial officer for six years. He took on the role of president and chief strategy officer in 2008.

According to the filing, Cakebread's exit was "for personal reasons and does not involve any controversy or disagreement with the company." The filing said Cakebread will receive a severance payment of $200,000 and a bonus of $225,000.

"Steve did a remarkable job in his time here at Salesforce.com, putting the people and processes in place to build an outstanding company," said Bruce Francis, vice president of corporate strategy at Salesforce.com. "And we wish him all the best in his future endeavors."

Meanwhile, according to published reports, two of Salesforce.com's vice presidents also have left the company, including Gary Hanna, executive vice president for enterprise sales, and another yet unnamed executive vice president.

"We've got no comment on rumors and speculation," said Salesforce.com spokesperson Gordon Evans.

However, sources close to the company said Salesforce.com is moving full speed ahead with hiring and new projects while many of its competitors are delaying products and laying off staff. Salesforce.com ranks with companies such as Google and Amazon.com, which are viewed as leading the industry into the next decade with cloud computing.

In other news, Salesforce.com announced that it has been ranked among the top three IT vendors for overall customer satisfaction in 2008, according to a recently issued report by VendorRate. In addition to Salesforce.com, ChemSW, Informix, Intel, IBM, Hewlett-Packard, Amazon.com, VMware, Apple and Research In Motion were also listed in the top 10 for overall customer satisfaction.

-----------------------------
BY Darryl K. Taft
Source：eWEEK.COM

Copyright ©1996-2009 Ziff Davis Enterprise Holdings Inc. All Rights Reserved.

Service in the Cloud: Salesforce.com's latest gambit

Things are very social over at Salesforce.com as it joins in with the online networking chatter to improve its products and services.
##CONTINUE##
Salesforce.com has expanded its Software as a Service (SaaS) offering so that customer service agents can use social networking to join in conversations about their products and services on the web.

Service Cloud lets businesses create online communities as well as tap into what is being said about their products in existing internet communities such as Facebook. It also allows support staff to contact customers by phone, email and chat, and lets firms set up their own online communities where customers can interact with each other and answer queries.

Salesforce.com CEO Marc Benioff says the idea behind the new offering is to "enable businesses to join the conversation" that is already happening on the web, often without any involvement by the company. "The Service Cloud is the first customer service solution that empowers companies to join and manage all service conversations happening in the Cloud," he said. "This has been made possible through the emergence of native Cloud computing platforms like Force.com that are built to harness the power of other Clouds like Facebook, Google and Amazon.com."

Service Cloud was created from Salesforce.com's $31.5 million purchase of InStranet. Customer services agents in companies such as 3M, Comcast and Business Objects use InStranet to access online reference and policy databases to answer customers' questions. Running on Salesforce.com's Force.com platform, Service Cloud combines the InStranet knowledge bases with the likes of Google search and Facebook connections, enabling customer service agents to communicate with customers via phone, e-mail and chat.

Salesforce.com noted that 50% of customer service interactions now happen on the internet, outside the traditional channels of customer service centres. "It's really a completely new way of looking at customer service," says Salesforce.com's vice president of customer support applications, Alex Dayon, founder of InStranet. "When we have a question, the first thing we do is Google it. The bad news is that those conversations are happening outside the framework of the organisations. Companies are losing touch with the people who are having problems."

The Service Cloud is made up of five main planks around the knowledge base to gather, distil and disseminate the expert knowledge found in Cloud communities to customers, agents and partners. These are:

• Community: Companies can easily set-up and maintain an interactive Cloud community for their customers by leveraging new Salesforce.com technologies such as Salesforce CRM Ideas and Force.com as building blocks.
• Social: The Force.com platform enables the Service Cloud to connect to leading social networking sites and funnel this information directly into their knowledge base to ensure it has the most up-to-date support information sourced from community experts.
• Search: By creating an active online community with the Service Cloud, companies can ensure that their site is one of the top results returned in a customer's search.
• Partners: Using the Service Cloud, companies can now share all of the information in the knowledge base quickly and easily with their partners, allowing companies to share cases, contacts and company information, without the need for complex integration software.
• Phone, email and chat: The Service Cloud will give agents access to knowledge in the Cloud, regardless if they use phones, email or chat to service customers.

Is it all just talk?

So, that's the theory but how does it work in practice? An early user highlighted at the launch event in San Francisco was UK telco Orange. Its Service Cloud deployment has tabs for community, Google, Facebook, business partners and communications channels such as email and chat. For example, customers can connect with the Orange Service Cloud through a Facebook community, enabling other customers to answer questions and have both the questions and the answers stored inside the Salesforce.com system. If eight or more customers vote an answer as correct on the Facebook community, an Orange customer service agent comes into the Service Cloud and reviews that knowledge. If the information is correct, the agent can then disseminate that knowledge to other Service Clouds while the knowledge gets passed on to other Orange customers for whom the problem is relevant.

The Service Cloud will let users create an online customer community with unlimited usage for up to 250 customers, set up a contact centre with up to five agents, connect with sites like Facebook and Google, and invite up to five partners to participate in the Cloud. Eventually, it will not be restricted to Salesforce's existing partners so it can be extended out to firms such as Yahoo or LinkedIn. "We see this market as our next billion-dollar opportunity," says Rayon.

Inevitably, rival vendors were less than impressed by Salesforce.com's latest gambit. "We would like to welcome Salesforce.com to the world of internet customer interaction!," comments Zach Nelson, CEO of NetSuite. "What we heard is that they will announce a 'new' customer service capability that allows online customer interaction and that they will be charging money for this service. NetSuite offers a more robust capability in our own customer centre portal that has been part of NetSuite for more than eight years."

Nonetheless, some analysts saw the move as a step in the right direction if Salesforce.com is to beef up customer service revenues. "The new generation of consumers trusts content created by peers. This consumer expectation that they can create answers and content as part of a community will lead businesses and other organisations to adopt similar techniques to succeed," says Gartner vice president Michael Maoz. "Ultimately, organisations will have to change their singular emphasis on tools for agents to a broader strategy that also supports the role of community experts."

But others point out some potential tension relating to the Instranet element of the offering. Bruce Richardson, of AMR Research, notes the irony of a 'no software' firm like Salesforce.com buying a software company that only sold on premises products. While observing that Salesforce.com had promised to deliver a multi-tenant version of the InStranet offering, he questions whether Service Cloud meets these expectations. "A closer look under the cirrostratus marketing cover shows Service Cloud consists of the existing Salesforce.com platform as well as a hosted version of the InStranet product," he says.

"Hosted software as a Cloud? I don’t mean to play the part of the purist, but I have to believe Mr Benioff would have thrown the red flag at the nearest referee had any competitor tried to position a hosted, single-tenant product as a being in the Cloud. Sure, you can offer the software on a subscription fee like you would SaaS, but you don’t get any of the advantages of multi-tenant, nor are your upgrades relatively seamless."

He questions how new customers who start with the InStranet product will move their data to the new Force.com platform. "What about current Salesforce.com customers that need the new functionality now and are willing to start with InStranet, moving to the Force.com version once it's available?," asks Richardson. "You would have to be in a lot of pain if you're willing to endure the two implementations in a relatively short time span.

"As for staying on the legacy InStranet software indefinitely, how long do you think the "no-software" leader will want to continue to support a foreign antibody?"

-----------------------------
BY Stuart Lauchlan, news and analysis editor
Source：MYCUSTOMER.com

Copyright © 2009 Sift Media. All rights reserved.

Salesforce.com rolls out Service Cloud

Salesforce.com has unveiled its Service Cloud, a customer service application that's designed for cloud computing and plugged into conversations that occur on Google, Facebook, and
##CONTINUE##
The effort is built on the Force.com platform. In a statement, Salesforce.com said that "two-thirds of all service conversations will take place in the cloud."

It appears that the Service Cloud is a part of the InStranet integration. While the details of the Service Cloud seem a bit fuzzy--Dennis Howlett will dissect later--the main pitch here is that Salesforce.com is trying to link up social networking and customer service. The idea isn't exactly unique as Oracle and SAP have similar efforts underway. In general, customer service reps will be better able to monitor feedback from customers wherever they go--including Facebook.

However, Salesforce.com is more likely to provide these linkages quicker given that it's a software-as-a-service vendor.

Key components include:

• Customer communities for interaction not just posting. Salesforce.com wants to host corporate communities.
• Social networking connections. Salesforce.com said its Service Cloud will connect to Facebook, forums, and blogs. The goal: Absorb information into a corporate knowledge base.
• Search ranking. Salesforce.com promises that Service Cloud results will be ranked near the top of Google results.
• Partner information sharing via the cloud.
• Multichannel--phone, e-mail and chat--support hosted in the cloud.

-----------------------------
BY Larry Dignan
Source：ZDNet

Copyright © 2009 CBS Interactive Inc. All rights reserved. Privacy Policy.

Salesforce taps Web 2.0 for Service Cloud

Salesforce.com today launched a new customer service offering, which integrates with Facebook, Google and other resources to help contact centre staff better support customers.
##CONTINUE##
The Service Cloud, which is built on the company's Force.com platform, connects to social networking sites, community forums, blogs and other resources to gather data that can add to an organisation's knowledge base of support information.

The offering allows support staff to contact customers by phone, email and chat, and lets firms set up their own online communities where customers can interact with each other and answer queries.

Salesforce.com argued that building these active online communities will also ensure that a company's web site is one of the top results returned if a customer uses a web search to find the answer to a particular problem.

"The new generation of consumers trusts content created by peers. This consumer expectation that they can create answers and content as part of a community will lead businesses and other organisations to adopt similar techniques to succeed," said Gartner vice president Michael Maoz.

"Ultimately, organisations will have to change their singular emphasis on tools for agents to a broader strategy that also supports the role of community experts."

Salesforce.com rival NetSuite responded to the announcement by claiming that its own Customer Center portal has been offering more robust customer support capabilities for over eight years.

"We would like to welcome Salesforce.com to the world of internet customer interaction," said NetSuite chief executive Zach Nelson.

-----------------------------
BY Phil Muncaster
Source：vnunet.com

© Incisive Media Ltd. 2009 Incisive Media Limited, Haymarket House, 28-29 Haymarket, London SW1Y 4RX, is a company registered in the United Kingdom with company registration number 04038503

Salesforce.com's Secret Sauce

Focusing on multi-tenancy forced the company to create a formidable application.
##CONTINUE##
Multitenancy has become a shibboleth in the software industry. You can tell what a company does just by asking for its opinion on a subject. To the companies raised on it (Salesforce.com, Google), it is a must-have. To the established players (Microsoft, SAP, Oracle), it is considered a threat, irrelevant or an additional delivery model. This week, the JargonSpy takes a close look at multitenancy and how it is shaking up the industry.

The most outspoken champion of multitenancy is Salesforce, which has created both a product and a development platform (Force.com) based on the architecture. Salesforce has an excellent paper that explains what multitenancy is and why it is important.

The core idea of multitenancy is that software is created so that one instance of an application can handle the needs of many clients, or tenants. In Salesforce's model, everyone starts with the same version of the application. The data are stored in a shared database, but each client has access only to its own information. The entire application is described by what is known as metadata, instructions that describe various aspects of how the application works. A client who wants to customize the application creates and configures new metadata that describes the new screens, database fields or desired behavior.

An alternative to multitenancy is single tenancy, a model in which each client has its own instance of software-running that can be configured through metadata or other means. SAP (nyse: SAP - news - people ) uses the single tenancy model for its Business by Design software, which implements a variety of business applications.

There are a lot of potential gray areas between multitenancy and single tenancy that we are going to ignore. A single tenant application can be delivered from a virtualized server in the cloud or on a server inside your data center. Parts of a single tenant application can be shared or not shared. For example, it is not unusual for an application to be single tenant, but with its database shared.

The point that Salesforce makes about multitenancy is that it allows a software vendor to worry only about one version of software running in one operational environment. Multiple versions do not need to be supported for different hardware and software configurations. Because all of Salesforce's customers are running the same version of the same software, they can see what is working well and what needs improvement.

When improvements are made, they become available to all clients at the same time. With more focus and centralization, the pace of innovation is faster. Partners are also able to focus their efforts on supporting one version of the software as they create compatible products.

One of the downsides to multitenancy compared with single tenancy is that a problem with one client can affect the whole system. Also, if centralized operations fail, all customers are affected. No instance of Software as a Service (SaaS) provider has been perfect. All have had major outages. But all look pretty good when compared with the track record of most internal data centers.

Salesforce has extended the benefits of multitenancy to other software developers through the Force.com platform, which allows third-party companies to use the software's raw building blocks to create their own multitenant applications. This model is called Platform-as-a-Service, and other companies like Google (nasdaq: GOOG - news - people ) have similar offerings that support multitenant application creation.

As the building blocks for supporting applications became more general purpose and less adapted to creating multitenant applications, you drift into the Infrastructure-as-a-Service space, which offers raw computing power. Clearly, sorting all of these layers out is a tough job that won't be tackled in this column.

The real question for users and developers is, Why should you care if an application or a platform is multitenant or single tenant? Salesforce CEO Marc Benioff argues in his public speeches that multitenancy is a requirement for a SaaS vendor to be successful. But is this the case? The SaaS model lifts the burden of creating and managing infrastructure from the shoulders of the client. This can be done with single tenancy as well.

The only reason to use an application is for it to do what you want it to do, and Salesforce has proved that thousands of customers want its software. But in other spaces, multitenancy has not proved to be the magic elixir. Netsuite, for example, offers an enterprise resource planning (ERP) package that is multitenant. SAP has its Business by Design product, a set of business applications that is single tenant. Neither has reached the number of customers that Salesforce has.

Another explanation for the success of Salesforce and its multitenant offering has to do with commonality of requirements. If you think of customer relationship management (CRM) as a space of requirements, you can argue that there is a greater commonality of need than for the ERP space.

Most people want the same 20% of all possible functionality from CRM. For ERP, perhaps everyone wants a different 20%. Using this line of reasoning, perhaps the key to success for a SaaS company is to choose the right offering, one that is the most common across all customers. Salesforce has benefited in many ways from pursuing this space using a multitenant approach, but perhaps the smartest thing it did was to choose CRM as a focus in the first place.

From the developer point of view, multitenancy is not the main event. The goal of using a platform is to get the right product done as fast as possible. Some companies will find that Force.com or the Google App Engine gets them where they want to go as fast as possible because of the existing functional footprint. Others will get there faster because of the flexibility they get using Ruby on Rails and Engine Yard for hosting.

Reading the Salesforce white paper, you see a picture of a new metadata- driven programming model that happens to be delivered in a multitenant architecture. To the JargonSpy, multitenancy is a sideshow compared with the accomplishment of so much abstraction through metadata. This perhaps is Salesforce's biggest achievement. If a company can offer customers a way to obtain and configure an application easily through metadata, it can be successful. But software companies have always offered software that is configurable through metadata. Is Salesforce qualitatively different?

The JargonSpy's best guess at an answer is as follows. The secret to Salesforce's success is that the company chose an area, CRM, which has common requirements across many customers. Then Salesforce focused on creating a scalable operational environment (the SaaS model) based on multitenancy. The biggest value of multitenancy is not the benefits that Salesforce points out but the fact that it forced Salesforce into doing a better job of creating a metadata-driven application.

If the JargonSpy is correct, the key aspect of software that will make it successful is its configurability. The easier it is to meet client needs through configuration based on metadata, the more successful an application will be, regardless of tenancy. A question that the JargonSpy cannot answer is whether there are limits to the configurability based on metadata. In other words, is it ever possible to simplify complex things like a chart of accounts that can work in every country in the world? Are some problems so complex that they will always be hard and cannot be configurable?

For the JargonSpy, the compelling question about the future of multitenancy is whether what Salesforce has achieved is just a precursor to the expansion of the operating system, application server layer and programming languages into the virtualized world. Salesforce is getting there from the application out.

Other players will not take the development of Force.com sitting down, and they are going to attack this problem starting from other directions. SAP, Microsoft (nasdaq: MSFT - news - people ), Oracle (nasdaq: ORCL - news - people ), IBM (nyse: IBM - news - people ), Hewlett-Packard (nyse: HPQ - news - people ) and Google (nasdaq: GOOG - news - people ) are on the move with their own offerings. The JargonSpy will explore this battle in next week's column.

-----------------------------
BY Dan Woods
Source：Fobes

Dan Woods is chief technology officer and founder of Evolved Media, a firm that offers content creation, editorial and publishing services.

2009 Forbes.com LLC™ All Rights Reserved.

Salesforce.com's Outage: Will It Derail the SaaS Market?

The service disruption which Salesforce.com (CRM) experienced last week came at a bad time for the Software-as-a-Service (SaaS) and cloud computing markets. Although I believe the long-term prospects for SaaS and cloud computing remain strong, there are plenty of short-term challenges facing SaaS and cloud computing vendors in today’s tough economic environment.
##CONTINUE##
Salesforce.com’s outage reignites the debate about the reliability of web-based services, and will intensify the concerns of those IT and business decision-makers who have been reluctant to adopt on-demand solutions. It also validates the claims of legacy software vendors that SaaS and cloud computing are not viable platforms for enterprise applications.

The ultimate irony is that the public website, which Salesforce.com created after it experienced a series of outages in 2005-2006 to demonstrate greater accountability, www.trust.salesforce.com, also went down during the latest outage. In 2006, Salesforce.com was quick to turn its problems into marketing opportunities. This time, however, there is even more at stake. Salesforce.com will have a hard time convincing software vendors and enterprise customers to adopt its Force.com platform unless it can build greater confidence in its service delivery capabilities.

It is not only important for Salesforce.com to quickly restore its own reputation, but also rebuild customer confidence in the overall SaaS/cloud computing industry. This is essential for SaaS/cloud computing companies to capitalize on their competitive advantage over legacy apps in today’s tough economic environment and rapidly changing workplace.

In fairness, Salesforce.com’s uptime record is still the envy of many IT and business decision-makers. That is why an increasing number of IT organizations are not only supporting the adoption of SaaS and cloud computing, but also benchmarking themselves and their operations against these on-demand service providers. However, legacy software vendors will attempt to exploit this latest disruption to make their case for sticking with on-premise applications. For example, Oracle (ORCL) has publicly stated that it is targeting Salesforce.com accounts and promoting its ‘pod’ approach as a hosted alternative.

-----------------------------
BY Jeffrey M. Kaplan
Source：Seeking Alpha

Salesforce.com outage exposes cloud's dark linings

Exposing the dark side of cloud computing, Salesforce.com suffered an outage that locked more than 900,000 subscribers out of crucial applications and data needed to transact business with customers.
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Salesforce, the 800-pound gorilla in the software-as-a-service jungle, was unreachable for the better part of an hour, beginning around noon California time. Customers who tried to access their accounts alternately were unable to reach the site at all or received an error message when trying to log in.

Even the company's highly touted public health dashboard was also out of commission. That prompted a flurry of tweets on Twitter from customers wondering if they were the only ones unable to reach the site.

Salesforce has long vaunted the speed and availability of its service as reasons businesses should dump their in-house customer relationship management applications and instead rely on its online infrastructure. Indeed, for those selling shoes or coffee, it can make a lot of sense to turn to someone else for IT support so you can focus on your core strengths.

But the outage, which Salesforce has yet to explain, also shows what can happen when close to a million subscribers depend on a single entity to handle some of the most important data in their company. Sure, plenty of organizations suffer hour-long outages, but they're generally spread out. Not so in this case, when a single disruption suddenly paralyzes a small fraction of the world's economy. Can anyone say putting all our eggs in one basket?

Real world sales forces are generally useless without real-time access to CRM apps. If cloud computing catches on the way Salesforce, Amazon, and the other cheerleaders say it will, this dark side is only likely to get worse.

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BY Dan Goodin, San Francisco
Source：The Register