Posts Tagged ‘Salesforce’


A door closed this quarter and another opened.  We’re now oriented on a new computing paradigm that will serve us for the rest of the decade.  There is now broad agreement on the big IT issues of our time and they can be summarized in the Four Big Buzzwords mobile, social, big data (and analytics) and real time.

We’ve been bantering these words around individually and in groups but in Q2 2012 most vendors came to a tacit agreement that these would be the issues around which marketing campaigns would orbit for the intermediate future.  Since Oracle’s CEO Larry Ellison is the original proponent of decadal cadence I will use his company as the measure of the short timeline that brought us to this moment.

April 2009.  Oracle buys Sun Microsystems.  The purchase of a failing Sun was seen as a retrograde effort.  The conventional software company buys a conventional hardware company and many of us expected them to fade into the sunset together.  It didn’t go that way.

September 2009.  In an interview at the Churchill Club Ellison said that cloud computing was a bunch of hot air.  Less sincere words have rarely left his mouth as subsequent events would prove.  No matter that by then, Ellison disciple Marc Benioff had already built a billion dollar business offering nothing but cloud computing as a delivery mechanism.  The prior decade bred an entire industry devoted to cloud computing and multi-tenancy but no matter.  Ellison had the database that drove these cloud companies and not much else.  He also had a huge installed base dedicated to conventional on-premise computing, so he was a late arriver intent on making up ground.  The first step might have been this bit of indirection.

OpenWorld 2009.  Oracle announced a new strategy and line of hardware starting with Exadata a huge database server with monster truck-like capabilities for serving data and crunching it into submission ten times faster than conventional technologies.  Exadata was followed by Exalogic, a compute server and Exalytics an analytics appliance.  There were other things too.  Before long little boys playing in sandboxes had traded their toy trucks, backhoes and other construction paraphernalia for Exatoys and Oracle had announced its engineered systems strategy.  Ok, I made that up just to see if you are still with me.

2011 Anthony Lye plus Oracle’s checkbook proved to be a potent combination as Lye developed a vision of Fusion driven applications and business processes of tomorrow.  Lye bought five companies proving that while you might not be able to buy love you can certainly buy R&D.  By the end of 2011 Lye had purchased ATG (ecommerce), RightNow (customer experience, service and support) Endeca (ecommerce and business intelligence), FatWire (web content and web experience management) and Inquira (service knowledge management software).  The combination, when knitted together positions Oracle as a contender in the Four Big Buzzword Categories.

But it wasn’t just Oracle that was making moves.  As early as late 2010 Microsoft and then others began preaching a gospel of multi-tier ERP, a strategy that would keep existing ERP systems and their pricy maintenance contracts in place while providing much of the new functionality required by the Four Big Buzzwords through a second tier of ERP from up and coming players like NetSuite and Zuora.

The approach ended a potentially disruptive moment for ERP vendors and their customers who were beginning to contemplate rip and replace on a scale not seen since four digit date formats were all the rage.  But beware ERP vendors, you are being surrounded and at some point you will be made irrelevant by the increasing functionality of the second tier and at some point there will be a bloodless coup d’état.

So what happened this quarter is that one ERP vendor after another admitted defeat of a sort.  No one any longer pooh-poohs cloud computing (even Ellison) or questions the validity of social technologies in business.  It’s all SOP today in what some are calling the post-digital era.  Post-digital doesn’t mean we’re beyond it, simply that it’s established fact and beyond debate just like evolution, global warming and a round earth are in most precincts today.  Yes, there are laggards who haven’t bought into the message yet but increasingly they are to be pitied, not argued with.

So, as they say in the reality shows, Who’s safe? And Who’s going home right now?

Well, as it happens very few need to go home provided they’re cloud oriented all ready and that they’re at least making noises about the other three Big Buzzwords.  Companies entering the market with anything that enhances the two-tier strategy will be welcome and some, like NetSuite, which has announced a defacto three-tier strategy should do fine.

In the years ahead look for the following ideas to gain primacy in business and enterprise computing as the post-digital era gains momentum.

Increasing use of the Four Big Buzzwords.  This will show up most obviously in mobility technologies but they will be supported by increasing use of centralized analytics crunching big data derived from social media.

Social will continue to be a big draw, not so much for what we know of social right now but for advances such as gamification that will become key drivers.

Multiple-tier solutions will continue to blur the distinction between on-premise, cloud and single vs. multi-tenant.

We will need to turn our attention to the internet of things later in the decade as machines increasingly talk to machines a la buy more milk, eggs and bread.

The key battleground will become platform and development tools.  Increasingly, the goal in business is to project agility through the capacity to change with customer demand.  Tools will be important but platform will be key.  Platform increasingly is the place where security, social, mobile and all the other Big Buzzwords have to be built in.  You can’t add any of them on after the fact.

Platform therefore is key and positions companies like Oracle (Fusion) and Salesforce (Force.com, Heroku, Sites.com, Database.com), NetSuite and others in the catbird seat.  Vendors with older platforms rejiggered for the cloud may not fare as well.

So there it is.  They’ve figured out what to do about cloud, as inelegant as it might seem, they’ve embraced the big Four Buzzwords and for the next several years, provided the economy holds up, we’ll see renewed competition as different vendors compete on slightly different permutations of a similar story.  We can already see Salesforce focusing on the social enterprise, Oracle the customer experience, NetSuite commerce, Microsoft catering to its large installed base with cloud versions of the things it used to sell in boxes.

SAP will do something but it’s still hard for me to figure out what.  They’re working with NetSuite according to Zach Nelson, CEO of NetSuite and Business by Design appears to be catching fire.  Never a strong marketing presence they need to get an elevator pitch for a small building.

Later in this cycle we’ll begin talking about video and voice embedded in the front office suite.  They’re about where social technologies were in 2006 and moving toward the center.


With the Facebook IPO just around the corner some people have started wondering if a “Facebook killer” might be lurking in the bushes and the new photo sharing website Pinterest has become the new darling.  Well, maybe.

I got a message from an industry watcher today, Kenneth Wisnefski, social media expert and founder / CEO of WebiMax, that said Pinterest was up and coming and a threat to Facebook’s IPO, but I disagree.  Here are some bullets from the email and my thoughts.

  • I expect Facebook’s stock price will soar in the beginning of the trading session, however once investors look closely at their fundamentals they will realize that Facebook really lacks a solid revenue stream (90% of revenue stems from advertising).
  • Facebook’s dependency on advertising revenue in addition to their vulnerability from smaller social media firms, like Pinterest, decreases my confidence in their long-term sustainable growth that we once expected.
  • Pinterest’s ease of use makes it more attractive to small businesses and we have already seen small business marketers shift toward using Pinterest and divert away from Facebook.  If this is sustained, consumers may gravitate toward Pinterest versus Facebook.

Well, then, here’s what I think.

  1. Advertising is not necessarily a bad business model.  It’s done good things for the likes of Google but as more companies enter the space and become good at the model, the demand for ads will prove to be less elastic than the supply and we will see tightening in the market and a decrease in profitability for the model.  Nonetheless, Facebook is early to the party and I believe their SEC filings make the point that they want to diversify so calling the business model a liability at this point is overblown.
  2. “Vulnerability from smaller social media firms”?  This sounds like somebody is trying to repeal the law of gravity.  It doesn’t work this way.  Certainly markets are open to disruption and certainly small companies disrupt bigger ones.  But for disruption to occur the disrupter has to demonstrate superior attributes in a market slightly adjacent to the disruptee.  Salesforce disrupted Siebel not in CRM but in the delivery mechanism.  I don’t see a sustainable difference between Pinterest and Facebook, especially since Facebook bought Instagram.  I think Pinterest will be a niche player in photo sharing.
  3. Pinterest might have the ease of use thing down simply because there is less of it than there is of Facebook.  When Salesforce started out with just four tabs they claimed ease of use and simplicity.  But that doesn’t say anything about the richness of the product or the experience.
  4. There is also the issue of switching costs which most people take into account when they consider going with a rival.  Facebook is a network and according to Metcalf’s law, networks are valuable because they have lots of connections.  A new network by definition has fewer connections than an established one, which makes switching more problematic.  Switching here gets you less not more and for the vast majority, Facebook’s network is a walled garden.

As I look at Pinterest I see a consumer site for sharing photos whereas Facebook has developed from those roots to a budding platform for doing real business and for hosting applications.  This platform is what enables Facebook to look toward other revenue forms and what makes it a better business solution.  So while Pinterest might very well be better than Facebook in some ways, to say it is superior or that it is a disrupter is to overstate the case.  It is a mistake to think that better technology wins the day.

Time after time we see that the company in first and with greater marketing resources is the winner.  If you doubt this, check out “The 22 Immutable Laws of Marketing” by Trout and Reiss.  It was published in 1994 and while it shows some wear and tear, it still gets this idea right.


I was surprised by the Salesforce.com announcement coming out of the company’s road show, Cloudforce Washington this week.  In the nation’s capital the company announced Government Cloud, which is just what you’d think it is if you’d been following Salesforce at all.

Beginning this summer, the company plans to deploy a secure and separate infrastructure to support cloud based applications for state and federal governments.  It will also open a new application store in the cloud just for government apps vendors and their Force.com wares — AppExchange for Government.

The announcement came and went on an average news day while I was in San Francisco attending SugarCon, the SugarCRM user meeting.  That surprised me because the implication, if I am understanding the announcement correctly, is that for the very first time, Salesforce is cleaving its service into two parts more or less.  Potentially that means separate and equal secure servers and a separate image of the software.

If that’s true it represents a milestone of sorts for the company and the technology.  While I have no doubts that the company will maintain its software so that there is no difference between the government and commercial systems, it appears that the development of separate infrastructure was needed to prove to the potential customers that security is paramount.

Again, if true, this would seem to open the door to additional future instances of separate infrastructure for Salesforce and at that point I don’t know what the difference is between a private and public cloud (Ok, I do know but, you know what I mean).  The government is, according to the same article, getting ready to award a contract for government wide email and other office services and Google and Microsoft are in contention.

So it appears that the market for cloud services is heating up and the ultimate prize of thousands of seats is causing some jockeying for position among the big vendors.  This would seem to mark turning point in how we define cloud services and is no doubt brought about by the plethora of offerings that promote multitenancy as an option.  Nonetheless, you can still call me skeptical of any solution that simply lets a company move all of its bad habits to the cloud.  “Your mess, elsewhere for less,” isn’t what I signed up for.  But that’s just me.

On another note, with government jumping into cloud computing, it makes me wonder if the market for Oracle Exa-stuff got a shot of adrenalin this week.  If government is going to play in the cloud you can bet on a couple of things.  First, with lots of users there will be lots of data and second, lots of users will require big husky servers with fault tolerant capabilities.  All this suggests the latest high end computing gear and companies like Oracle bubble up in this discussion.

So I want more information.  I am flying home as I post this and it will be high on a crammed agenda tomorrow.  I wonder why there’s been so little reaction.


Note to self: Write something nice about Microsoft Convergence 2012.  They did a great job in Houston and most importantly you can really see the CRM focus coming together with social, mobile, analytics, back office and a lot more.  It’s taken a long time because there are a lot of moving parts for Microsoft but Convergence was impressive.

To get a sense of all the wonderfulness surrounding Convergence you need only glance at some of the many observations made by the likes of Paul Greenberg, Brent Leary, Dennis Howlett, Josh Greenbaum and many others.  So Kudos to Microsoft.

My observations will be somewhat different.  While I also think Microsoft has made important strides and I applaud their CRM team, I want to focus on what’s around the bend.  First there’s the new CRM GM, Dennis Michalis who took over from Brad Wilson after Wilson turned Microsoft into a CRM power almost by sheer force of will.

Michalis is a find, the kind of acquisition that, if he was a stock, would have been overlooked by everyone but Warren Buffet.  From what I can tell, Michalis has spent most of his career in Europe or the Far East and did well in those market; however, he was somewhat off the radar when Microsoft saw his talent and scooped him up.  Michalis has been with the company only a few months so this year’s Convergence was still mostly the result of Wilson’s efforts.  Michalis will have to stand on some big shoulders to do better and I think he can.

For starters, he will need to flesh out the social, and to a lesser degree, mobile strategies and product lines to be truly competitive.  Microsoft is not a social powerhouse and trails in the mobility wars, at least on the mobile operating system side (and that’s a lot).  But they have a strategy to offer their CRM on multiple browsers and in fact, demoed a mobile application for the iPad, which was impressive.  Their analytics package for sales, form what I saw, is powerful and sports a nice and intuitive interface though overall the product still has a straight from the software lab look to it.

The company’s biggest advances were, in my opinion, not software related though — they more clearly relate to the company evolving from an ERP company to more of a CRM company.  This needs some explaining.

First, it was nice to see Kirill Tatarinov speak about the drivers that his organization takes into account when trying to figure out product direction.  He said they include economics, geopolitics, people and technology, and I think that’s hugely important, though I don’t think it has been the case in the past.

The business climate, the cost of fuel and raw materials, the stability of the local political regime including personal freedom and free markets, all go into what will drive demand as well as the nature and character of demand.  They drive what people will buy and the style of the technologies they will use in their personal and professional lives.  All this might seem to affect ERP more than CRM but I think the distribution of influence is roughly equal.

But those are high level ideas and truth be told, it’s an ongoing effort to get them down to street level and there are some key things that I think Microsoft can do better in that regard.  For starters, the company culture is one of a vendor selling through distribution to others who will produce a final full product.  In ERP they’ve been successful at imagining customer business practices and driving solutions to market in some key areas, especially manufacturing.  This hasn’t been the case, to the same degree in CRM and it needs to be.

Microsoft needs to do a better job now of connecting its many dots.  For example, it is still at the point where it is hitting checklist items like social — so that it can compete with the likes of Salesforce — but without offering a compelling story of how a business progresses because it adopts new technology.  Salesforce calls it the social enterprise and Microsoft has no counter.  It is still selling components, modules, and it needs to elevate its game.

Also, too frequently for my taste, Microsoft likes to show off customers who have heavily customized their CRM instance, especially non-profits.  It’s nice to see non-profits in the mix, but the focus needs to be on for profit business.  Also, this makes points for their XRM strategy which goes against Salesforce’s Force.com platform, but it is wide of the mark for a customer that wants out of the box functionality that works the way its business works and drives improvement.

Cloud computing is another area for tightening up.  Here Microsoft joins the rest of the market excepting Salesforce, in highlighting the benefits of a go-it-yourself, roll-your-own strategy of hybrid clouds in which customers get to decide where their data resides.  I don’t think this is the right strategy for any vendor and here’s why.  We see too many examples of companies who manage their own data being hacked and increasingly the hackers are not individuals with an ax to grind but nations like China stealing IP or radicals like Anonymous aiming for industrial scale mayhem.

In this world, the strategy shouldn’t be building your own bomb shelter.  Microsoft and the other vendors have a credible case to make that they can and do perform a superior job of keeping data safe and that the time for going it alone is rapidly ending.  A more credible and strategic program might be for all vendors to say, “Hey, we’re the pros at this, let us handle it.”  If I ruled the world (hahaha!) that’s the tactic I would take.  It will take some years to accomplish this education but we need to start now.  And we need to quit deluding ourselves with a cowboy ethos that individuals can do a better job of data security than an organization dedicated to the task because the evidence shows this is just paranoia.

Ok, back to Convergence.  My last point — that Microsoft needs to do a better job connecting the dots has another element.  I am sorry to keep comparing Microsoft to Salesforce, because I think the two are more different than similar, but in the area of philanthropy I think Microsoft is trailing Salesforce when it could be leading.

You know that Salesforce has this 1:1:1 model in which it donates one percent of its equity, time and product to a 501 (3) (c) charity, the Salesforce Foundation.  At major events like Dreamforce, they have charitable activities in which customers can easily donate an hour of their time to do some public good.  All this activity is always tied back to the charity.

At Convergence Microsoft tried to do the same thing and the effort was inspiring but it wasn’t tied back to anything in particular.  Volunteers worked with Habitat for Humanity to renovate a house and when attendees filled out evaluation forms, Microsoft donated a dollar to a Houston charity, which was great.  But without some over-arching program I think Microsoft misses getting credit for its largess and also for its community outreach, which is important.

Last point.  Microsoft has not been a leader in any aspect of CRM.  It has taken a less risky fast-follower approach and it has breathed in other peoples’ exhaust as a result.  It’s time for the company to take a leadership position in something if it expects to reach the highest plateau in the business.  That plateau is unified communications (UCS).

Microsoft has Lync, a UCS that it offers and also uses in-house; Microsoft people tell me it works well.  UCS is, I think, potentially the next iteration of social networking.  It has enormous potential to save companies money and improve the links with customers.  To say the least, it would be smart of the company to step up its emphasis on UCS.  The window of opportunity is closing and I hope the company takes advantage of it.

If this sounds too critical, let me end on a more positive note.  Microsoft is a rising star in CRM and Convergence polished its reputation.  It has end-to-end technology from the back office to the front and from landlines to airwaves.  It is making headway in social, mobile and analytics — the next wave.  It has a good handle on at least some of the critical business processes that its customers depend on.  Like any software company, it will always be building out functionality, but its focus now must include, to a greater degree, all the many things that go into making a whole product in the social age.


Doubtless you have heard of the social enterprise by now.  It is Marc Benioff’s leading salient in a world he is convinced needs his solution to modern business.  But you also know that, like many other trends, this one is a work in progress.  For every Kimberly-Clark, Burberry’s and NBC Universal there are, what?  Banks!

No, not the banks that ran fast, free and loose with investor’s money or made up mortgage backed securities and cleverly also invented derivative insurance at the same time on the theory that every boat needs a lifeboat.  No, those were investment banks.  Regular old banks that do the mundane tasks of balancing the books, offering free checking, loans and credit cards are among the late adopters of the social enterprise or so says an article in today’s Ne York Times.

According to the Times article, most banks are slow on the uptake of social technologies.  While many have social outposts like Facebook pages these banks do a minimal job of patrolling social media for customer comments and other signals that something might need doing.  Experts quoted in the article used words like “hibernating,” and “amateurish,” to describe banks’ efforts along with, “displaying tokenism attitudes.”  Ouch!

Let’s call them “Social In Name Only” or SINOs after RINOs, a group of upstanding and principled people the Republican Party apparently no longer has room for.  I’d say that SINOs are different in many ways.  For starters, they haven’t abandoned anything or been abandoned by the society at large.  They simply are late to the party.

A better question to ask about SINOs is why they are late.  Is it that they are organized top down and the message simply has not gotten up to the head cheese?  Or is it possible the intense regulatory climate that they live in (which investment banking cousins somehow evaded) has not caught up with the social tsunami due to older customer demographics?  Or is it possible that a certain amount of risk aversion keeps banks from dealing with their customers on their own terms?  The article suggests that high net worth customers under 50 might be about to lead a charge to social.

I don’t know but I expect some combine of forces is at work.  I also smell a business opportunity and it’s bi-directional.  We can figure out the upside pretty easily — better customer outreach and interaction resulting in more banking activity.  But the bigger win for banks might actually be on the cost avoidance side.  If you’ve ever tried to understand a statement or get a question answered about that check you bounced you know that many banks are still mired in phone hell caused by call center business processes that were engineered during the very first Bush administration.

Seems to me that your average bank could ramp up service AND cut costs significantly if it paid attention to social media and leveraged it like any other social enterprise would.  But then what would we call them?  Having just invented SINOs I am fatigued from my creative efforts and don’t want to think about it.  Look at how short the idea cycle has become.


Yammer announced an impressive $85 million financing last week.  You can get the details here http://mwne.ws/wp4GtZ .

You might already know that Yammer provides enterprise social networks, the kind of collaborative spaces that enable employees to “swarm” on issues to achieve resolution or deal with a customer issue for instance.  Yammer claims that more than 85% of the Fortune 500 use their products.  (The swarm idea comes from business writer Stephen Denning in The Leaders’ Guide to Radical Management).

If enterprise social networks sounds familiar it may be because Salesforce.com has put so much into it with its own product, Chatter, which has penetrated enterprises such as Dell, NBC, Comcast and Burberry’s.  Though off hand I don’t know what percent of the F500 use it the company talks about tens of thousands of customers though since Chatter is included the basic monthly service.

Suffice it to say that Salesforce has been carrying the water to educate the market so far — Yammer’s PR said they would launch their first ad campaign March 1, for instance.  But ads or not, these companies and some others are carrying an important new message to enterprises — get on the social express or you’ll be dog meat in a little while — or words like that.

Permit me to change course here.  So far the rollout of social media in the enterprise follows a normal hype cycle curve.  It’s the same idea that Geoffrey Moore documented in the 1990’s in the Crossing the Chasm series — everybody needs to buy the new gizmo to secure competitive advantage.  This is great because the companies that offer the new, new thing sell it like crazy for a few years.  Some of them burn out, sometimes in spectacular fashion, and a few limp across the first finish line (an IPO) and become real companies.

But this hype cycle is a bit different.  In fact many companies are finding the cycle has changed due to the pervasive nature of the freemium idea.  That’s where the vendor offers a subset of the functionality free in the hope of snagging a big sale down the road.  This is also called the puppy dog close because once your kid takes the puppy home it’s yours regardless of what they told you at the pet store — “Just bring it back tomorrow!”

But freemium has a different set of issues.  Some companies are just fine with the free version, some don’t use it and vendors discover that only a small portion of the initial users turn into paying customers.  That’s life.  With a freemium approach you don’t need an expensive sales team and marketing can be minimal because customers show themselves the value of the product, which might explain why most don’t turn into buyers.

Rather than the freemium approach, I offer a different way to appeal to companies to buy social wares.  I just finished the Steve Jobs bio and one of the things that struck me was how much Jobs wanted to leave a legacy, a company that would be great for a long time after him, like HP had been in his youth.

There may be many C-level officers who really only care about making money because cash is how they keep score.  But under the power suits I think you are more likely to also find a person who puts in many hours and for whom the enterprise is the achievement of a lifetime — dare I say a monument to the executive’s cunning and ability to lead?

If money was the only important thing I have to believe executives would not work as hard as they do.  Flying to China or Japan might sound exotic but it gets old.  Once you’re certain that the next generation or two of your kids will have a good life, your attention turns to the legacy, what you’ll leave behind for the next guy and the shareholders.

So here’s my proposition.  The vast majority of the new products coming onto the scene in any decade are things that make money, contain costs or, occasionally improve customer satisfaction.  But social is different.  It is no stretch of the imagination to say that social can do all three and even more important, it is giving companies the ability to change who and what they are.

When you get down to it, social’s core offer and benefit is that it enables you to make a great business by leapfrogging over old ideas, processes and procedures to make customers more satisfied which in turn leads to everything else like money.  By making information ubiquitous social (i.e. employee collaboration) ensures decisions can get made for the right reasons and in the right time frame and helps build a great business.  Building a great business, a great company — the legacy — is where it’s at.

So the big mystery to me is why the vendors in this fantastic market are selling their wares as technologies or services.  Sure, social technologies in all their forms are new and the market requires a certain amount of massaging to get early buyers.  But rather than selling social as an end in itself to mid-level managers, I think I’d be selling the legacy idea to the C-suite.  You don’t get to make a pitch like this every day and it would be a shame not to take advantage of the opportunity.


Here’s a quick shout out to Jobscience, one of my clients, for winning a Salesforce.com AppExchange Best of ’11 Award for Human Resources and Recruiting.  What’s especially sweet about this award is that it is crowd sourced form Salesforce customers.  That’s right.  The people who buy and use the stuff said this is the best on the AppExchange.

As you know there’s been a goodly amount of M&A activity in HR lately with Oracle buying Taleo and SAP buying Success Factors.  That’s because HR is an important new frontier for companies who are often competing on the talent they attract as much as they are competing with other forms of capital like VC money and IP.

At least out in the Valley, there are more job openings than there are people to fill them.  The talent drought has made recruiting and holding on to people a more serious thing.  And with this comes the realization that old style HR systems that are attached to the ERP side of the house have a distinct disadvantage.

In his biography, Steve Jobs talked about the importance of hiring the right people and it has made a strong impression on me.  He said,

“…I realized that A players like to work with A players, they just didn’t like working with C players.  At Pixar, it was a whole company of A players.  When I got back to Apple, that’s what I decided to try to do.  You need to have a collaborative hiring process [my emphasis added].  When we hire someone, even if they’re going to be in marketing, I will have them talk to the design folks and the engineers.

In this environment, with a plethora of unqualified applicants trying for advanced jobs and a regulatory environment that sees to it that everyone gets a fair shot, the pressure on companies to conduct those collaborative hiring processes quickly so that they can put out offers ahead of the competition is intense.  Jobscience takes a front office approach to the HR challenge and the people who know best, have said that it’s got the right stuff.

Equally important, Salesforce didn’t have to spend a billion bucks to get Jobscience.  This is just another example of the power of real cloud computing.