They have been genre-benders, innovators, and a marketing machine par excellence for the past eight or so years. They’ve planned on being the “Business Web for all your application needs” since 2003 and they have rigorously followed that path with their recent emphasis on Force.com a.k.a Platform as a Service and their drive around cloud computing. They win awards for what they do with incredible frequency including my 2007 Steppin’ Out Award as the company in CRM that made the most impact in 2007 - out of a total field of 82 companies and a finalist group of 6. They even have an excellent core sales force automation product with the AppExchange ecosystem, which they call “the ebay of business software” (pretty accurate) to support their platform in the style its accustomed to - especially when it comes to fililng out the traditional and not-so-traditional pillars of CRM. They have proven to be, as Denis Pombriant identified them back in the beginning, a “disruptive innovation” with their on demand subscription model. They have proven the scalability of SaaS with the first real large enterprise deployments at SunTrust, Merrill Lynch and multiple other multi-thousand seat deployments. They are truly an industry giant, even though they have by far the smallest revenue of the Industry Giants listed here. This year, salesforce interwove Web 2.0 functionality into their applications with their Facebook and Amazon services integration. Since 2007, they productized their community, IdeaExchange, and its now being used by successful UGC-driven sites like MyStarbucksIdea.com. Their vision (not their CRM vision per se) and road map has been as clear as can be. They want to be the the leader of the platform as a service market, and unlike Larry Ellison, Marc Benioff has embraced the cloud. This past Monday, they announced, among other things, their integration with the Google Apps Engine. They are a force (not .com) to be reckoned with. They’ve even made force.com, at least as of Monday, cross-platform compatible beyond just Google. As my colleague, buddy and leading industry analyst Denis Pombriant says, “this is cool stuff.” But even with all this love, I’m concerned about two things. With their growth, their apparent rate of innovation, something they have been known for since their inception, seems to have fallen off. Just to stop some of you right there, I don’t call cross-platform compatibility innovative. I call it shrewd, necessary and smart. But not innovative. I say apparently fallen off, because I’m assured by several senior management folks at salesforce.com that this isn’t the case - but I have to see that before I change what I write. If they are innovating and its not obvious to people like me, then the tree falling in the forest becomes the problem. Who knows they are innovating if there is no way to tell. That said, this isn’t my major concern. They have had one significant weakness for a couple of years now that they seem to have made no effort to correct and, in a world where the customer demand exceeds the grasp of any one company, it is a serious, short-sighted mistake. I’ll explain. As you know, it is remarkably difficult for a contemporary company to fulfill the complete and voracious needs of the social customer that is so empowered now. Consequently, it is more and more the case that partner ecosystems, not just a channel, need to be created to manufacture the appropriate environment that customers need to complete their personal agendas with a given company. No longer are just products and services provided sufficient to satisfy customers. What that means for the partner channel is that needs to morph into something far more complex than it has been in the past. It needs to go from a channel to an ecosystem. Microsoft, for example, with some holes, gets that. There is no one kind of partner anymore. Salesforce.com, of course, has its partner ecosystem in the AppExchange - which is both its strength and its weakness. The value of AppExchange is undeniable. A partner ecosystem that allows the partners who create applications on the salesforce.com platform to benefit from salesforce.com’s industry presence. The partners for the most part operate as ISVs who develop the apps and then sell them on the AppExchange market for a subscription fee on top of the salesforce standard pricing. That’s great. But where there is a weakness is something that I’ve heard complaints about and seen in action personally. Salesforce.com, for the most part, seems unable to distinguish between a strategic partner and an AppExchange ISV partner. They try to reduce ALL relationships to AppExchange applications. Want to partner with SFDC? AppExchange app. I’ve witnessed this approach personally twice - when two companies that clearly would have been strategic partners were told to “build an AppExchange app”, instead of what should have been a more substantial (and, at least from what I could see in the case of one of them, a highly beneficial strategic partnership) discussion. I’m not only a witness to it but have heard it from put-off potential partners too often to dismiss this. This is something that needs to be fixed and asap. I don’t doubt salesforce.com pre-eminence at all. I love the company for the most part and have enjoyed knowing the senior management and staff there I know. I think they are innovators and industry leaders. But they are running into competition now in areas that they owned and they have to step it up this coming year. There are things there that I’m hearing that make me think they will. I’m betting on it.
Source:blogs.zdnet.com/crm
