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Dreamforce 2010: Of Cloud Proliferation - Part 1
Dreamforce 2010: Of Cloud Proliferation - Part 1
’s annual user conference, has over the past several years become a highly anticipated and entertaining end-of-the-year fixture for the enterprise applications market observers (surprisingly,
will take place in late August, and let’s see how that new timing will feel). Namely, in these prolonged times of bad economic news and businesses recoiling across the board, one could always enjoy the unusually high attendance and upbeat and “never a dull moment” atmosphere of the multi-day event, courtesy of salesforce.com’s CEO Marc Benioff and his executive team.
was mostly about the continued growth of the vendor and the unveiling of
, the company’s nascent social platform and collaboration cloud (
as duly covered by my blog series)
, the overall
theme was the cloud proliferation (and salesforce.com’s further diversification). Needless to say, this was in addition to the theme of continued growth.
Indeed, we are now talking about a $1.7 billion
behemoth with nearly 90,000 corporate customers, and
named the second-fastest growing software company in 2010 by
. Also needless to say, Benioff’s admirable philanthropy theme continues at every Dreamforce, this time based on the
UCSF Benioff Children’s Hospital
, somewhat in tune with the spirit of the upcoming the holiday season.
Another curiosity in 2010 was the event’s coincidence with salesforce's archrival
, and there were many great blog posts comparing the two events and vendors. Let me just recommend here the
articles from Ben Kepes
’s Denniss Howlett
Not Keeping All of Its Eggs in One Basket (er, Cloud)
In any case, in spite of their huge brand equity importance, salesforce.com’s name and stock ticker symbol (CRM) suggests only a fraction of the company’s purpose today, over a decade since its inception. Sure, salesforce.com is still best known for its original on-demand
sales force automation (SFA)
and customer service management realms of
customer relationship management (CRM)
Sales Cloud 2
Service Cloud 2
respectively). But the company has for quite some time also been trying to expand its charter, aspiring to be the world’s leading cloud computing enterprise solutions provider.
Make no mistake, there has been explosive growth of salesforce.com’s CRM applications (or clouds, if you will), which added 4,800 new customers in the last financial quarter alone. Especially well performing of late has been the aforementioned Service Cloud 2, with 13,000 customers gained since its launch a few years ago (
following the 2008
. But the vendor cannot rely on this ever more commoditized market segment to continue to grow at the same pace in the long term.
RightNow, SAP CRM, Oracle CRM, Sage CRM, CDC Pivotal CRM, Consona CRM
, etc. are all offering both on-premise and on-demand flavors. They have all garnered strong install bases or carved their defendable niches. But even at this event it appeared that the most direct competition has been coming from
Microsoft Dynamics CRM
Fighting Off the “Evil Empire”
Microsoft Dynamics CRM has come a long way from being regarded as a laughing stock in its early (1.0 and 1.2) releases in the early 2000s. This particulalrly true in terms of functional and technical features in its current 4.0 release and the upcoming
Microsoft Dynamics CRM 2011
release. As described in
my 2009 blog series
, together with its
Microsoft Office Communicator
siblings, Microsoft Dynamics CRM has been the fastest growing product of late within the entire Microsoft house.
The product is slowly but surely reaching functional parity with salesforce.com’s CRM products as well as developing a sizeable customer base (23,000), the number of partners in total (1,200) and hosting partners (100), and global coverage (80 countries and 40 languages). The solution can no longer be dismissed as “old school on-premise only” either, given the
Microsoft Dynamics CRM Online
option and the
Microsoft Dynamics Marketplace
(which is similar to salesforce.com’s
, although still very nascent).
But where Microsoft can certainly put the most pressure on salesforce.com is in terms of pricing, which is currently at a very affordable US$34 per user per month. Even with the bundled
Microsoft Office 365
cloud offering (which includes online versions of SharePoint, Office, and Lync)
, Dynamics CRM Online comes much cheaper than salesforce.com’s equivalent editions. For more information, see
Frank Scavo’s blog post
Josh Greenbaum’s post on the
Enterprise Irregulars blog
, both from our recent attendance of the
Microsoft Dynamics Fall Analyst Event (FAE)
Microsoft has thus far made many promotional campaign attempts to lure salesforce.com and
Oracle CRM OnDemand
customers. And just prior to Dreamforce 2010, the software titan announced that it was offering salesforce.com’s customers rebates of US$200 per license for switching to its own and significantly cheaper Dynamics CRM Online service.
Microsoft Substantiates Its Claims ("The Price is Right")
Lately, Microsoft has published a number of stories about concrete and named salesforce.com customers switching to Microsoft Dynamics CRM. Since completing their migration, these new Microsoft customers typically report doubled user adoption, improved reporting, reduced customer management inconsistencies, and projected cost reductions through the automation of manual marketing and sales processes.
Other reported reasons why these companies have decided to switch to Microsoft Dynamics CRM include the ease of use, customization capabilities,
total cost of ownership (TCO)
, and interoperability with other familiar Microsoft business productivity products, including Microsoft SharePoint, Microsoft Office,
Microsoft SQL Server
. Some companies have also recognized Microsoft’s partner ecosystem, which supported them with the migration to Microsoft Dynamics CRM.
To learn more about Microsoft Dynamics CRM customers who have switched from Salesforce.com, one can visit
the aptly named “Don’t Get Forced” Web site
. The latest information on updates and offers for Microsoft Dynamics CRM can be found at
the CRM 2011 beta site
site wittily named “Cloud CRM for Less.”
As the bottom line, salesforce.com will have ever more difficulties with dismissing Microsoft Dynamics CRM as “an inferior product that is thus offered cheaply.” While the Dreamforce 2010 stage stunt with the model (actor) featured in Microsoft’s “Don’t Get Forced” campaign (Bernard, or whatever his name might be) had an entertaining value for the keynote presentation audience, it did not explain why that particular customer left salesforce.com in the first place and why (and when) he will now (allegedly) come back from Microsoft.
Similar price pressure has also been coming from the open source competitor
, as noted in
Albert Pang’s blog post
. Salesforce.com still has some breathing space due to Microsoft Dynamics CRM Online current unavailability outside North America and because the product is not yet on
Microsoft Windows Azure
(but rather on its own makeshift multi-tenant on-demand infrastructure). But we are not talking about eternity here before Microsoft catches up in that regard as well.
What Else Has salesforce.com Been Pursuing?
Not letting grass grow under its feet, salesforce.com has long pursued the cloud platform play, to attract developers and
independent software vendors (ISV’s)
to produce cloud solutions well beyond the realm of CRM. To that end, in 2007 salesforce.com launched
offering, allowing developers to build apps directly on top of Salesforce.com’s cloud infrastructure using the multi-tenant
code that was first unveiled in 2006.
The vendor does not break out how much revenue it earns from Force.com, but in 2009
estimated that Force.com had over 1,000 customers. Not too shabby, but not exceptional either, as measured in salesforce.com’s aforementioned growth standards and aspirations. One of the reasons for the platform’s somewhat subdued adoption could be its proprietary and esoteric nature. Namely, although Oracle and Microsoft are proprietary technologies too, Java and the
languages have respectively reached the mainstream.
To give salesforce.com credit, the company is open to criticism and proposed course correction. Thus, having realized the attractiveness (if not the utmost prominence) of Java, i
n early 2010, salesforce.com and
as the cloud platform for Java developers
. The VMforce discussion and decision was admittedly the seminal moment for Benioff and his co-founder Parker Harris to decide to decouple Force.com into a more open application layer (for PaaS purposes) and a database layer for providing
Infrastructure as a Service (IaaS)
Part 2 of this series will analyze the cloud offerings proliferation at salesforce.com and the vendor’s multiplied PaaS offerings. Until then, your comments and opinions with regards to salesforce.com’s strategy and prospects are very welcome.
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