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Saturday, July 30, 2005

Salesforce.com As Microsoft Of The On-Demand World

I came across this report titled -"Salesforce.com As Microsoft Of the On-Demand World" authored by Tom Kucharvy of summit strategies. The report notes that Salesforce.com is now intent on establishing itself as the leading platform provider and solutions aggregator of the on demand world. It has already made significant strides toward laying the foundation for this goal. But it must go much further—and it must do so before larger, more powerful potential competitors—such as Microsoft, IBM, Google and eBay—stake their own claims to this mantle. The report set me thinking - I do not share the perception that Salesforce.com is a great success(not yet) in the enteprise software market - not atleast till 10% of Fortune 100 companies begin to use it and claim unique success and testify value generation. Some key points to be considered:
- Third-party software vendors in the fields of CRM, ERP (enterprise resource planning) and others can use the Salesforce.com platform as it provides a ready-made hosted data management-data sharing environment, provides the widely touted cost advantages of on-demand software, and can be readily customized to fit their needs.
- Salesforce.com is already heading in this direction because other on-demand software applications are linking up with the Salesforce.com platform. The report also says Salesforce.com is claiming that more than 150 add-on applications have been developed for its platform and that it serves an expanding community of more than 8,000 corporate and independent software vendors.

Some key thoughts here:
- Salesforce.com has a long way to go before it demonstrates that it really has a business strategy that can make it market-dominating company.
- Salesforce.com has not spelt out its vison or direction in clear terms - in terms of segment coverage it would own and what would be partner's space( I am not too sure what benefit partners may get - given that distribution and scale up is not a significant challenge in the on-demand world)
- It is not appealing to think that salesforce.com would begin to be as successful as Microsoft is in the on-demand industry given the fact that Salesforce.com hasn't even achieved the distinction of being the Siebel Systems of CRM in the ondemand world. Salesforce.com has substantial incumbents to take on - Oracel, SAP, Microsoft included.
- CRM itself is a niche application and even Siebel is struggling to outgrow the space - there are definitve views that the enteprise CRM market itself could be saturated.
- Broadbased platform is the key - develop some to fill in segments, acquire some to fill spaces and selectivey partner to make things work - thats the approach taken by winners in enterprise software segment.
- CRM is a specialised applications - there are several bigger, better CRM players than Salesforce.com and it has such a big journey ahead to be counted as a leader in the CRM space before looking at seemingly impossible stretch targets like being teh on-demand platform for all.
John Pallatto offers good perspective on this theme.
- On-demand itself has a long journey ahead to be counted as mainstream application for large corporations see my here- that means salesforce.com may have to compete with a myriad of dozen or so big enterprise players like SAP, Oracle etc to gain size and stature - not an easy journey even to think about.

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Sadagopan's Weblog on Emerging Technologies, Trends,Thoughts, Ideas & Cyberworld
"All views expressed are my personal views are not related in any way to my employer"