several important 'platform provider' milestones loom in 2008Salesforce.com is ramping up the New Year with a focus on its platform play, Force.com. The company announced Jan. 3 it hired a new executive, Polly Sumner, to lead the Force.com team (the last one left after 4 months on the job) and a big customer win with Carlson. Salesforce is also hosting a Tour de Force event later this month in San Francisco to showcase the platform's capabilities to developers.
But Salesforce.com - like its competitors in the emerging on demand development sector - still has several important milestones to reach in 2008 before Force.com can be deemed a critical success, and the company's savior from a one trick pony status suggested by some analysts. The company's main proof points for the year: a critical number of SI's [system integrators] and ISVs [independent software vendors] utilizing Force.com - in a significant manner - and a clear revenue stream for partners.
"They are heading in the right direction," said Ovum analyst David Bradshaw. "The point of being a platform is not just the platform itself; it's a healthy ecosystem playing in [the company's] direction. Right now Salesforce.com is the place to look for an ecosystem."
Bradshaw said that in the coming year Salesforce needs to have some "really major" ISVs on the platform – that utilize the platform to develop applications rather than just using it to point into their own products and services. Analysts will also look to see some partner revenues around Force.com. "Salesforce hasn't said how much revenue the partners have made on the platform," said Bradshaw. "I am sure that at some point the company will want to publicize a number. That really is a significant part of the platform – when it's generating a significant amount of revenue [for partners]. The obvious measure is how it compares to Salesforce.com's own revenue. Ultimately [as a platform provider] I would want partner revenue to exceed my own revenue. That would mean I am succeeding as a platform vendor."
While Salesforce.com is not giving up any specific metrics around Force.com – or its corresponding applications marketplace, AppExchange – the company is making strides in landing big customer deals around Force.com. Carlson, a company with businesses in the travel, cruise, hotel, restaurant and marketing industries, is using Force.com and AppExchange to develop a customized CRM [customer relationship management] system for its global Salesforce.com users.
"We had built a global enterprise, but did not have the tools necessary to utilize all of our valuable business account information and make it available to staff dispersed across 40 countries," said Anthony Forbes-Roberts, enterprise CRM manager at Carlson in a statement. "We explored a number of vendors in the market, but salesforce.com and the Force.com platform stood out for its product breadth and rich functionality."
After deploying Salesforce.com's CRM software, Carlson used Force.com to develop customized applications for five separate operating groups. At the same time Carlson tapped AppExchange to download partner applications, including Newmarket Commex, an event and meeting management application from Newmarket International, and CRMSurveyor, a customer survey tool from Vovici Corp., according to the statement from Salesforce.com.
Japan Post is probably Salesforce.com's most well known Force.com customer win at this point. As Japan's largest financial services institution (which also provides the nation's postal services) Japan Post is transitioning from a government-owned agency to a privately run company. And it's using Force.com to build and deploy a number of applications to help it sell financial products to its huge customer base.
The key with Japan Post: It's not using Salesforce.com's CRM applications. Likewise The Walt Disney Co is using Force.com to build homegrown applications – a deal Salesforce won against Microsoft's .Net development stack.
Despite Salesforce.com's win against Microsoft in the Disney deal, Microsoft – and SAP with its on demand Business ByDesign suite – look to be formidable competitors in the on demand development sector. Both companies have massive brand appeal, particularly for partners. Microsoft released its multi-tenanted CRM 4.0 software in December 2007 and SAP released Business ByDesign a few months earlier, in September. While SAP has been clear in its intentions to market Business ByDesign as a development platform – a nice lead in opportunity for partners - Microsoft has been less clear about its on demand development plans. Regardless, some partners are ready to roll with CRM 4.0 as a platform.
"We've always looked at CRM as a tool set and our clients are always asking us to model their business within CRM, so we've always looked at CRM as an application framework," said Richard Smith, vice president and CRM practice director at Green Beacon, a software consulting firm and Microsoft partner. "[CRM 4.0] provides a framework that is very module and a good basis to start building applications on. We're definitely thinking of it that way. I don't know if Microsoft is, but it wouldn't surprise me. We are absolutely on the band wagon using this as a platform."
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