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Read/WriteWeb / Weblog
Web Technology news, reviews and analysis.
10 Things to Know About Salesforce.com
20 11 2008 These are reflections from having spent a few days at the annual Salesforce.com event, Dreamforce. We hope they are valuable to people who need an executive summary-level understanding of the company and its position in the cloud and SaaS marketplace. Full disclosure, the company paid for my flight and hotel to attend Dreamforce.

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''

1. They Are Ambitious

Salesforce wants to be the dominant cloud platform for business. Their view is that computing has seen two waves: the first was the mainframe, and then the PC client server, and now the third is cloud computing. They have been consistent about this since their inception in March 1999, so this is no recent bandwagon hopping.

2. They Have a Good Shot at Meeting This Ambition

They have a powerful mix of capability and relentless focus. They have the resources -- cash, cash flow, clients, track record, management team, and so on -- needed to execute on this vision. Their competitors are bigger, but Salesforce has the advantage of focus. They are pure play, and they have no legacy to protect.

3. They Are a Marketing Machine with Flair

Having attended a few big rah-rah events, such as Java One, I see that Dreamforce compares well on scale, details, and flair. Its messaging and visuals were consistent and powerful, and everything just worked well. This all costs a lot of money (which relates to the next point), but that money has to be well spent, and they seem to be doing that. The presentations had real flair and humor. Benioff knows how to be controversial to get press. They are a billion-dollar business that still acts like a start-up. Even the music was good.

4. Their Biggest Issue Is Maybe Price

There are many lower-cost competitors to their base CRM application. Now that SaaS is increasingly accepted, due in part to Salesforce's evangelical marketing, smaller competitors spending a tiny fraction of what they spend on marketing can undercut them. Their most visible competitor is Zoho, and it does not look like Zoho is going to shy away from this battle, and they have staying power. So Salesforce is fighting on two fronts. On the one hand they are competing with Oracle and SAP for big enterprise accounts. On the other hand they are fighting low-cost competitors, such as Zoho. This will require all their marketing and management skills.

5. They See Today's Troubled Economy as Their Moment to Win Big

They got their early big traction in the last downturn around 2001 and 2002 and have never looked back. They are greedy while others are fearful. They spend more, grow, and hire, while other firms lay off people. The basic economic advantages of cloud computing, such as lower capital expenditures and a faster time to market, resonate in a downturn to the point that they overcome the resistance of conservative buyers to cloud computing.

6. Their Vendor Eco-System Is Making Money and Acting Bullish

Salesforce knows that this matters. This is the lesson they learned from Microsoft. Will they move into the spaces currently occupied by vendors? Of course they will. Vendors will have to be agile; that is just how the game works. But today, in these tough markets, we see vendors that are profitable, growing, hiring, and raising money. The winners in many segments are being defined now. It is a great time to be an entrepreneur in this space. Salesforce knows how to leverage all its capability to make a few winners do very well and then promote that success big time, thus inspiring others to come on board.

7. They Believe That Good Software Design Matters to the Core Economics of Cloud Computing

They refer constantly to their "multi-tenant kernel," which sounds very techie for a such a marketing-driven company. It does appear that they are not suffering from the scaling and reliability problems that we have seen affecting consumer Web 2.0 ventures such as Twitter and Facebook.

8. They Also Know How to Partner with Big Companies to Make Themselves Look Bigger

They wheeled out large companies, such as Google, Facebook, and Amazon, as partners. The message was, "We are at the center of an eco-system with big partners." This makes large conservative enterprise buyers feel comfortable.

9. Focused Research and Development

They have a predictable and focused R&D plan, with a major theme each year. This again makes large conservative buyers feel comfortable: they know what to expect.

10. They Will Need to be Careful About Usability Issues

They are adding so much functionality and so many partners that they face the danger of users getting confused and going to simpler point solutions. That "hairball-of-complexity" problem bedeviled Microsoft as it grew fast, but Microsoft enjoyed a lock-in that Salesforce cannot count on. The SaaS world is naturally lock-in resistant, with low switching costs. There is no sign of this being an immediate problem for the company, but it is something they will have to look out for. See also our most recent story about Salesforce: Salesforce.com Says Hello World.Discuss
IT Must Learn to Bend or Business Will Break
20 11 2008 The current economic climate is having a devastating effect on almost every business around. In order to adapt to changing conditions and opportunities, businesses will need to use flexible, adaptable systems to survive. The days of expensive year-long implementations of behind-the-firewall software look to be behind us.

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'' I recently attended a Forrester Briefing and listened to comments by analyst Peter Burris, a very smart guy. The company has done a host of studies showing that technology will be a growing part of how businesses compete and differentiate themselves in the future. While systems and software used to be very "behind the scenes" and often transaction-based, that is the case no longer. Consumers and businesses alike buy differently, consume differently, and recommend differently. Trends such as social networking, video on demand, and e-commerce will continue to force businesses to adapt to keep up with their customers. They cannot rely on systems that take years to implement, and most don't have the budgets to make large investments, at least they won't for the next couple of years. The growing focus on SaaS, cloud computing, application platforms, etc. are all responses to this growing trend in the market. There will be other solutions in the future for mobile, etc. that we haven't even imagined. They all drive businesses to use systems that they can deploy, change, and retire quickly. In my main job, I remember meeting a venture capitalist who talked about how his firm looks for opportunities in which it sees lots of "wiggling." He couldn't describe what that really meant, or how one gets paid for wiggling. I thought he was a lunatic. In retrospect, he does make a good point. Things happen quickly on the Internet and in this changing global economy. When a business sees wiggling (or opportunities), either positive or negative, they need agile systems to respond. One-size-fits-all software and packaging are going the way of the VCR. I think this will continue to grow in importance and focus as enterprises evaluate new systems and invest in new technology. What do you think?Discuss

Google Lively Is Dead-ly
20 11 2008 LivelyIn an economic environment where a number of companies are stumbling, it's important to remember that sometimes even Google makes bad decisions. Such would be the case with Lively, a browser-based virtual world environment - and purported Second Life killer - that Google launched this summer to great fanfare. Now, a little over four months after Lively's launch, Google has decided to turn the lights out on the alternate reality, announcing that they are discontinuing Lively at the end of this year.

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'' Google tried to be polite about pulling the plug:

"Since Lively's launch, we have been delighted to see the creative ways you've used the product. We enjoyed hanging out in Jen's coffee house, and checking out the Brasil Party room. We got a kick out of the YouTube videos in a variety of languages telling stories about your avatars. And we've been awed by the elaborate rooms that you've constructed, using mosaic tiles and photo gadgets in novel ways."
Sad Lively AvatarBut ultimately, it decided to shut the whole thing down. Why? There will be all varieties of speculation as to why Lively failed to remain a viable application for Google. Perhaps the traffic Google expected never materialized? Maybe it was going to be too distracting to take on a well-entrenched Linden Labs and its faithful user base? Was the "Windows only" format a problem? Could it be that, in today's economic conditions, Google simply couldn't afford to fund it? I think we can take Ockham's Razor to this one. Because I think the answer is quite simple: It seemed like a good idea at the time. But, in actuality, Lively didn't offer Google any relevant data. And that, ultimately, is what killed Lively. The world of Google - everything on which Google focuses its time and effort - is built on relevant data. A portion of that world involves making that data searchable. But the far more lucrative portion of that world involves analyzing how users are accessing that data and finding ways to monetize those behaviors. Example? Think of the silliest Google app that you can. I'll pick Google Mail Goggles, a Gmail Labs feature that makes you answer math questions before you're allowed to send an email to prevent you from drunk-emailing your friends. But you could take Gmail emoticons, because - honestly - that's pretty silly too. Even those seemingly ridiculous apps provide thousands of data points through their use: Which users deem themselves "at risk" for sending unwarranted emails? How good are inebriated people at math? What's the trend of sad emoticons now that the economy has turned? How many people opt for traditional emoticons versus graphic ones? You could go on and on with the potential data points. But those examples only make sense because of one thing: users. It's much more difficult to make that leap with Lively - which didn't boast anywhere near the traffic of Gmail - and as such, it just simply didn't fit in to Google's larger plan. And when traffic started to tank, it wasn't worth additional investment, because Google likely wasn't seeing any relevant application for the data as part of its core structure. Yes, I'm sure other factors came into play, and I'm sure it wasn't easy to pull the plug on a splashy product that launched mere months earlier. But it's an important reminder that Google has a larger goal in mind and you're a big part of it. If you're not playing, nobody's paying.Discuss
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