Salesforce - Participate in the New Competition Saturday, September 16, 2006
I spent last Wednesday at the Salesforce.com London jamboree, where I got to spend some one-on-one time with the poster boy of online services, Mark Benioff (albeit minus his beard).
The day was intended to showcase Salesforce to prospects, customers and partners and the conference probably attracted over 600 people.
Big focus of the day was the AppExchange , which provides a development platform for Salesforce Development Partners to create embedded offerings to complement Salesforce online capabilities. But that's not all - more notable is that it provides those Partners with a direct distribution channel out to the 500,000 customers of Salesforce and presently does so for FREE. This is great news for those firms since
- they get market access to pre-qualified customers that have already bought into buying online services. I spoke with the CEO of Clicktools which is one of the early entrants onto the market and he commented that they had spent many years fighting a losing battle to persuade big companies to use online services and trust their data and infrastructure to third party providers. Now though, thanks to firms like Salesforce, these arguments and related scepticism are ebbing but the AppExchange, puts them directly in touch with those firms that have already "converted" to the new religion. The new believers include Merrill Lynch (5000+ seats), ABN (1000+ seats) and Barclays, who are firms that you would expect to be fairly paranoid about putting their data with an external party both for security reasons and concerns about service reliability/upturn, but who now all represent fabulous reference sites.
- they aren't incurring sales costs [astonishing isn't it, but more of that in a moment]
- they can easily provide demos and free trials to prospects
- they enjoy a direct relationship with customers that sign up, including billing. I found this element bizarre, since to my mind, customers would probably find centralised billing far more convenient that having to settle with many small suppliers, sometimes via credit card. Likewise, Partners would probably prefer to avoid the admin overhead of billing many customers that insist on being invoiced
The shocker of the day for me was the degree of ignorance amongst about 80% of the audience about what's available already on the web. This was evidenced when he spent the first 15 minutes of his 70 minute podium presentation showing the audience, Yahoo mail, Writely and iRows , the latter two of which are embedded into Salesforce, albeit in the same way as any web page could be. Look, he proclaimed to an ignorant audience, you can do email, word processing and play with spreadsheets on the web, hosted by someone else and accessed simply as a service. Perhaps I've known about these for too long to still be wowed, but it's still staggering that an audience familiar with Salesforce isn't more familiar with other online services. Perhaps Benioff is benefiting from this ignorance to some degree, in that Salesforce seems like a completely new innovative way of delivering services and most notably crm. Many I asked for example had never heard of ZohoCRM , userplane , meebome , airset , thinkfree .
Anyway, onto my chat with the 6'7" giant himself. I caught him in the Hotel lobby and managed to briefly prise him away from his entourage of PR "girlies" & helpers. Knowing I had only a few moments at best I asked him 3 questions that struck me based on the day's proceedings.
1. Why wasn't he taking a cut from the AppExchange Partner sales?
2. Why didn't he make life simpler for everyone by offering central billing for AppExchange
3. Will the Salesforce name become a hinderence as the offering expands across disciplines, both through Salesforce's development efforts and those of Partners.
Ok, so you might have come up better than that but these things genuinely intrigued me based on what I'd heard earlier in the day. Why? Well,
Re 1. firstly none of the Partners would have resented paying commission and I personally believe the AppExchange sales could in time account for 25% of the gross sales of Salesforce. Assume a commission of say 15%, this would go straight to bottom line. Not only that but Salesforce is trading at an astonishing 9 times REVENUE. So slip in some extra revenue from external sources and boom, up goes market cap before even the cosy Ovum analyst, who did an on-stage love-in with Mr Benioff, notices. However, having spoken to a number of the Partners who were present at the event, none of them believed they would ever be charged - you know why? Because a) their revenues would be to tiny and b) they were doing Salesforce a favour by rapidly adding capabilties that would make it competitive with Oracle and the like [no alcohol was served at the event, in case you were wondering and I never saw any drugs either]
Belioff answer to 1. : Of course we will do, but I haven't told them yet [I do have a witness to this conversation]. Equally its early days and the offering is being expanded more rapidly at no cost to us
Re 2. I think customers would appreciate dealing with a single supplier, at least from a billing perspective. Additionally, Salesforce would benefit from additional cashflow and be able to deduct their commission at source. However, I suspected that they simply hadn't given this enough thought at the outset and so didn't have system to support it as yet.
Belioff answer to 2. : We will do, probably when we introduce fees [I do have a witness to this conversation]
Re 3. Salesforce may have started as a CRM system to help the sales team but is now a far broader offering including configuration offerings to support Recruitment, HR, Call Centres, Support teams, Self Service, Partners Programmes and even some Finance functions. Thing is, you're not going to appreciate this breadth from the corporate name/logo/brand. Now this might seem like a trivial point but how many potentials are going to misconstrue the name to be a guide as to the product focus.
Linguistic expert Frank Monaghan reckons there are 6 name types for a business, namely Family Focus (Bloggs & Sons); Think and Link (Lip-Smacking Catering Company); Geo-name (Clapham Plumbers); Straight to the Point (The Towbar Shop); Pun-ter (Pine and Dandy); and Obscure (37 Signals). The fourth of these is where Salesforce began its journey to goliathdom, but what about now?
Belioff answer to 3. : (Most indignant and evidently displeased by this notion) We have a very well known brand but what would you call it?
So, I responded that perhaps he should do what firms like the "Easy" group had done after having launched EasyJet when they launched their follow ons - Easymoney; Easycafe; Easycar; Easycruises and maybe use "force" as a suffix. But anyway, I'm pleased and proud to announce the competition to rename Benioff's empire and provide him with his suite of new titles. Simply add a comment to this entry with your ideas or better yet email Mark direct with your thoughts. Can't promise any prizes or even thanks from him.....
posted by John Wilson @ 12:32 AM Permanent Link
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1 Comments:
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At 5:51 PM,
said...
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Glad that you have tried Zoho CRM, John! Hope you have tried all the other Zoho services as well.
It would be great to hear your thoughts about Zoho.
Regards,
Arvind
aravind[at]zoho.com
