I read Chaucer’s Canterbury Tales in college (yes, in Middle English and no, it wasn’t that long ago) and now every April brings me back to the opening verses about spring time and renewal. This April was especially memorable in our industry and as the month has just passed I wanted to take a moment to discuss some of the things I witnessed.
Mostly, for me, there was an unmistakable sense of renewal in CRM and in the tech sector more generally. Facebook continued to primp for its assumed to be historic IPO and bought Instagram, a company with an application for mobile devices and not much more than a website otherwise. Facebook paid a billion bucks for Instagram, no doubt a sign of the future. Marketo heading for its own IPO at some point bought Crowd Factory combining marketing solutions into a suite that will offer modern and ultra modern marketing.
Thankfully, there was more innovation than just the M&A variety. I went to a couple of analyst briefing sessions that were interesting for different reasons and I will have to assume that the events I couldn’t fit in were much the same. Oracle held a deep briefing to show off progress on all fronts. The event made me a believer that they have a plan or plans that merge into a powerful vision of engineered systems and software that meets some of the challenges of the social/mobile/analytic/big data world we’re moving into at light speed.
SugarCRM raised the bar and showed the world that it is growing rapidly and that its open source approach to business is very much in the mainstream along with operating system, server and database open source projects that support, in one way or another, the innovations in the rest of the industry. It looks to me like Sugar is becoming the go to CRM that everyone has to include on the shopping list. Open source might not be for everybody, but then again Sugar’s growth numbers and recent capital round indicate they just might be.
Salesforce announced its Government Cloud in an effort to capture some of the new business likely to come out of local, state and federal initiatives to cut IT costs and improve constituent service. When government becomes an adopter of a new technology like cloud computing it’s safe to say that it’s not a radical departure anymore.
But that doesn’t mean we stop innovating. As the Salesforce announcement made clear, the big issue for government will be security and, I would add, up time. So I look for a new era of innovation around both security and fault tolerance as cloud computing works to measure up to a nine nines reliability standard found in other utilities.
Finally, sneaking in just under the wire, on April 30, Paul Greenberg announced the second season of CRM Idol, the competition that seeks to discover hot emerging companies with great technology ideas in our space. Full disclosure, I am Paul’s friend, but that category includes about half the world. Last year, Idol’s first, was a great learning experiment. As one of the founding primary judges (others in the U.S. are Brent Leary, Esteban Kolsky, Jesus Hoyos) I was present for all of it and I can say we learned a lot.
We got a stellar crop of finalists last year (both in the U.S. and Europe) including Crowd Factory, Stone Cobra, Assistly and Get Satisfaction, which won the contest. Two of the four were bought — Assistly mid-way through the competition and Crowd Factory last month.
We are expecting big things from this year’s group of contestants too. The announcement by Greenberg on Monday is the opening of the season and companies interested in participating should visit the Idol website for details. There are a few rules that make this a real competition among emerging companies — you can’t be too old or too rich for example — so check it out.
Being a software entrepreneur is not easy. While you might think that venture funding has eased many of the burdens, raising capital is not easy though it can be insightful. VC’s look not just for new companies or new solutions but new categories. And what looked hot last year may no longer be attractive. They’re always looking for something that has never been seen before that nonetheless sparks interest and fills a need. CRM Idol is like that. The companies that do best are those that don’t conform to a pattern but instead break new ground.
If you pay attention to Idol you might get an idea of the future of CRM and possibly other things. Just looking at the Instagram deal tells me potentially that the hottest new companies might be those writing for the smartphone market. That, of course, would be a significant finding — the kind of thing that will make future Aprils so interesting.
Yesterday Salesforce.com unveiled its newest offering, desk.com, a complete rewrite of Assistly, a company and product that Salesforce bought last September. Desk.com completely replaces Assistly in the market and it is designed to be a light weight/light cost customer service solution for the SMB market. The idea has about as many legs as a millipede. Let me explain.
First, customer service is hard for any company but especially for an SMB, which naturally has fewer resources to draw on. Nonetheless, an SMB has to compete with companies much larger and with greater resources—that’s the down side of everybody looking alike sizewise on the Internet.
For the SMB, selling is comparatively easy. From a small hub any company can project to the greater world through search engine optimization, word of mouth and smart use of social media. Service happens in the opposite direction—from the outside in—so the SMB needs a good catcher’s mitt and an extremely efficient means of processing customer requests. Failure at customer service is one of those things that keeps small companies small or enables them to ramp up, which leads to the importance of desk.com.
The Assistly DNA is all over desk.com. Starting with the innovative business model in which a company can simply sign up to use the service to the creative pricing model that provides the first user at no charge, this is a solution that small business can get its arms around. I particularly like the Flex Hours approach that lets anyone in the organization use the system for a buck an hour rather than submit to the $49 monthly seat fee for an occasional user.
At the user level, desk.com is what you might expect a reasonably intelligent person to come up with if asked to design a service system that lets customers communicate to a vendor through social media. Through hash tags and @ signs customers signal their need for assistance and a streamlined dashboard in a browser enables the SMB personnel to respond.
Of course desk.com has a knowledgebase from which they can work. There is also good ability for lateral movement within the SMB so that a service person can send a request to someone within the organization to finalize the solution. And desk.com is native to Salesforce’s supported mobile devices so that a person delivering services can act even from a phone.
You’ll note that I am staying away from the concept of a service agent and that’s intentional. The emphasis on SMBs takes into account that everyone in a small business has the potential to act in a service capacity, which is the genesis of the pricing model.
So desk.com adds to the fleet of service and support applications within the Salesforce Service Cloud. Previously the company has targeted sales solutions for the SMB for instance with small company pricing and with its contact manager configuration. But those were largely packaging decisions and they were easy to accomplish. With desk.com, Salesforce has shown the same dedication to the SMB on the service side. It may not solve the whole customer service need but if it can help the SMB eliminate some of the more easily answered service calls that they receive it will have earned its keep. And at $49 per month, and a free first seat any SMB would be smart to check it out.
Ok, sure, buy another help desk application this time for the small company market, why not. With BMC offering a help desk solution for big companies, this makes for a certain amount of symmetry and product line completeness.
I don’t think the announcement surprised me or any of the judges on the CRM Idol committee. Assistly has been impressive in the competition and we’ll see where it goes. As acquisitions go this was on the small to medium end of the Salesforce spectrum and certainly not the $300 million+ price tag that Radian6 was.
I think the Radian6 deal might have taught Salesforce a lesson — keep a shrewd eye on the marketplace and make your acquisitions while companies with good ideas are still small. You spend less that way.
You can buy a half dozen Assistly’s and still have enough in your pocket for a very nice long weekend in Vegas for what Radian6 cost. That means you can be wrong five out of six times and break even. That’s even better than baseball where a good hitter is right three out of ten times.
Why it took so long for Salesforce to buy Radian6 is a mystery to me. Had they bought earlier when this promising company was less promising they would, I am sure saved some money and Radian6 would still have had a nice liquidity event. But it is what it is Radian6 is proving to be a good pick up and hopefully Assistly will also prove out in the near future.