People keep calling me to ask what Salesforce is going to announce and Dreamforce. My standard answer is, how would I know? I get briefings like a lot of analysts but in a situation like this you usually have to promise to hold the news until the company makes its announcements. This is not new or unique to Salesforce, every vendor does this and I am happy to comply. But this is being written before my briefing so please do not think I am simply being coy. I am guessing here, based on my experience following the company.
My conjecture about what Salesforce is likely to announce is usually generally right and often underestimates what the company can do. Now that it has a two billion dollar run rate and the resources that such revenue implies, Salesforce can do a lot of development and make a lot of announcements. Add to that the company’s hard-core belief in delighting its customers and you can see that there’s always a lot to do but it’s easy to guess wrong.
But generally, Salesforce has a number of product lines and it is not one to miss the opportunity to make an announcement in each area. Also Dreamforce is where they tell you about the whole year ahead and they use subsequent events to deliver against the promises made at Dreamforce — another reason to cover all the bases. So, let’s look at the product lines and read some tea leaves.
Sales Cloud and Service Cloud have both been dipped in the social secret sauce over the last couple of years and I see nothing slowing in the social arena. So look for more social in each product line. Perhaps some news about social and Chatter would make sense. There was also some talk earlier this year about a Marketing Cloud and no one I know at Salesforce did much to discourage that line of thought so I look for some kind of marketing announcement. It would be a strange announcement though since Salesforce holds its marketing partners in high esteem and would be disinclined to look like it was being competitive with them.
Also, Chatter is now a default part of the baseline product with over one hundred thousand companies using it or at least having access. It would surprise me if they didn’t make some announcement about making Chatter more elaborate. How that happens is a guess because it seems like they’ve rolled it out to everyone inside the organization who might be able to use it. It would behoove them to find a way to sell more seats though because the Street is already wondering when they’ll get to $3 billion and every seat helps.
Salesforce also has a big development suite that includes the Force.com platform, database.com (introduced last year) and Heroku for building Web apps. There’s also the VMForce product for moving Java applications into Force.com. That’s a lot of development capability and it represents one of the biggest growth opportunities for Salesforce so I would expect multiple announcements around the development suites. It’s a wild guess but this might be the Dreamforce that gets dominated by development. Maybe. I would expect that before that happened that Salesforce would break off a separate show just for developers. I don’t think we’re there yet though.
Beyond the pure product announcements I am sure Marc will probably have a few comments about the foundation or the children’s hospital or the new headquarters campus. Maybe they’ll have some architectural drawings, that would be nice. Then there’s Metalica and all the entertainment that’s planned. But this is a digression of sorts.
There are also multiple user group meetings going on early in the week as AppExchange partners take advantage of the location and the customer traffic to bring their users together. Zuora and Cloud9 have told me they are holding events and I am sure there are others. Perhaps that’s why Dreamforce starts in the middle of the week.
So that’s what I know, or rather these are my hunches. After more than a decade, this company is still growing like a weed, customers give it high approval ratings (which I have checked), the company keeps on innovating and Dreamforce has become one of the milestones on the IT calendar. Bring it on.
It’s amazing to me how we overuse words. Bothering to notice is an occupational hazard of the writing life, I suppose. For instance, consider the word unique, which means one of a kind, if you add very or any other modifier to it, you get mush. Today’s word might be amazing. There is entirely too much use of amazing in my opinion but curiously, Dreamforce Wednesday was an amazing day and I say that without hesitation or irony.
On Day Two of Dreamforce the company introduced two new clouds, which is becoming one of its new favorite product words—another would be force though I suspect at this point that Microsoft has had enough of it by now. The new clouds are for IT service desk in a creative partnership between BMC, which ported its leading help desk product, Remedy, to Force.com; and Heroku, a Ruby on Rails application platform. That brings the total number of platforms to eight and if you are keeping score at home they are: Sales, Service, RemedyForce, Jigsaw, Chatter, Force.com, Database.com, Heroku.
What’s interesting to me about this is that there is a rough division between business applications and platform technology. I had thought that this Dreamforce would focus on business applications because Chatter has been a big success for the company. But applications were for Day One and while Chatter received its due, it really was the second story of the conference. The top line stories were all about foundation technology and they show a maturation of Salesforce as a technology company that supplies the enterprise with some very sophisticated and interesting tools.
In hindsight, announcing database.com on Day One was a dead giveaway that Day Two would bring some kind of developer news. After all, a database is only valuable when you can write applications against it. So a logical announcement could have included some new alliance with a company like VMware but that’s been done before. Instead, Salesforce simply announced the intent to buy Heroku a development platform for Ruby on Rails that will be especially useful for quickly developing and deploying mobile and Web applications.
So now Salesforce is a company offering a robust suite of cloud based applications that support front office business processes and it is a company that provides tools that enable developers and ISVs to build advanced applications for the Web, mobile devices and the cloud. This takes me back about five years to a conversation I had with Marc Benioff about S-force, the progenitor of Force.com and the company’s initial foray into opening up its tools to enable developers to customize the Salesforce application.
I told Benioff then that I thought the platform business would some day eclipse the application business in revenues. That obviously pleased him but his limited response was to give a wry smile and say, “Well, I am a systems guy.” So the systems guy is returning to his roots and his company is delivering some very interesting technology that will continue to bend the price curve making advanced information processing more accessible to many more business users around the world.
The sub-text of these announcements is worth a comment too. More than at any other time, Salesforce has embarked on an effort to deliver to its customers not only powerful and flexible tools but it has also made a big deal of openness and standards, two attributes that it simply has to offer if it wants to succeed in the enterprise. I heard this message from Marc as well as Parker Harris, George Hu, Kendall Collins, Bret Queener and anyone else I spoke with.
Nonetheless, if you look at the now eight clouds you are likely to miss or underestimate the reach of the Salesforce solution set. The naming of all products is not stable yet and some things are called clouds while others are Forces but leaving this aside consider the following developer environments that have either been delivered already or announced for delivery in 2011.
Force.com — Plain vanilla application development for the Salesforce platform, buy it now
SiteForce —Website development tools, WYSIWYG available around mid-year 2011
VMForce—enterprise Java development, GA Next year
Heroku—Ruby application development, available next year
RemedyForce — IT service desk running on the Salesforce platform, buy it now
That’s a lot and it neatly aligns Salesforce’s new products against Microsoft’s database and development tools. Salesforce and Benioff see some obvious weakness in the Microsoft offerings because, although they have been made cloud resident through Azure and CRM friendly through Dynamics, Benioff is clearly positioning his company as the new alternative to not only old technology but old fashioned (read software licensing) business processes. The comparison may not be letter perfect but as we saw this week, it’s all about perception and right now the market perceives Salesforce as a leader in many areas.
It’s sort of like the funny story about a young person discovering that Paul McCartney was in another group before Wings. Marc Benioff had another company sandwiched in between his Oracle (Nasdaq: ORCL) days and founding Salesforce.com (NYSE: CRM). So for those of us who knew that, Database.com had the same kind of retro vibe when it was announced at Dreamforce.
Database.com was Marc’s other company, and I had assumed that they’d simply kept renewing the URL registration for the last 10 years, but I was told differently. At any rate, Salesforce is now in the database business. I guess if Larry Ellison can buy Sun Microsystems and jump into the hardware business, then Marc can get into the database business.
In truth, Database.com is more of a confirmation of what Salesforce had been doing through Force.com for a long time. The big difference now is that anyone with almost any application development tool can build an application that leverages the database in the cloud. There are some other differences too. For instance, the application you build using Database.com is separate from the Salesforce and Force.com world, meaning that you can’t expect to use the pre-built applications or fields of the base product. No, sireee, this looks like a database for developers.
Now, admittedly, database.com runs on the same Salesforce infrastructure, and so it will exist in the multi-tenant world, but for all intents and purposes, that will remain a background issue.
What Kind of ‘aaS’ Are We Looking At?
So this introduction leaves those of us fixated on categorizing new developments in something of a quandary. Is this platform as a service (PaaS)? Or is it simply infrastructure as a service (IaaS)? I’d say it’s infrastructure because a naked DB isn’t enough to call a platform, but a naked DB is not so naked considering that it has to have a place to live and work. So my vote is that it’s IaaS.
Who does it compete with? That’s an interesting question. The obvious candidates include the database vendors such as Oracle (Oracle, MySQL), Microsoft (Nasdaq: MSFT) (Access, SQL Server) and IBM (NYSE: IBM) (DB2). There are also specialized DBs that run in memory and other products, but that’s enough for now.
Database.com will certainly appeal to anyone building a cloud-based application for internal use as well as individuals who want more flexibility and accessibility than what’s offered on the desktop. This announcement is a direct challenge to Microsoft’s cloud aspirations, which include its database. So this could get interesting.
On to Chatter
My second observation from Dreamforce is the new configuration and deployment options for Chatter, the collaboration application. Chatter now comes in three flavors, each offering more functionality. A free edition (Chatter Free) is available through invitation within any organization that has so much as a single paid Salesforce seat operating. Free will operate much like an internal Facebook and will have read-only access to some Salesforce files.
For a mere 15 bucks a month per seat, Chatter can be used by all members of the organization, and it will offer greater access to data throughout the company. I suggest you look over the actual announcement to see what gets connected at this level so that I can forestall carpel tunnel syndrome.
Finally, Chatter integrated with the core CRM applications, Sales Cloud and Service Cloud, is already available, and nothing much changes here. If you are paying for any level or edition of these products, Chatter continues to be something else you have to work with.
Note the difference — CRM users already have Chatter and pay no additional fee; it’s only the additional users making steam below decks or running the engine room that you have to pay for, and you can be as selective as you want at that level.
In reality, Salesforce representatives tell me they expect every customer organization to have a mix of users, some paying, some not. I think that’s a great idea because it provides one level of simple security keeping information in the hands of those who use it. It’s nothing against the guys in the engine room, but it’s a pragmatic decision for any company.
Chatter Free went live over the weekend.