Service Cloud

  • February 3, 2010

    • 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.

    Published: 635 days ago


    One of the more revealing things I heard from Marc Benioff at Cloudforce 2011 in New York last week was his idea about how his company will continue to build out its product line.  Marc’s never been super secretive about his general direction though product specifics have always been closely kept.  But in our conversation, he reiterated a long held belief that makes more sense than ever.

    For a long time the natural assumption has been that a software company needs to balance out its offerings.  So, a company focusing on back office financials should build or buy CRM and a CRM company should build or buy ERP.  But the number of companies that succeeded at this approach is small.  Only a few companies I can think of actually succeeded in this and they were all back office software companies to start with.

    SAP, Oracle and Microsoft come to mind and you can add Sage too if you also add the caveat that Sage buys everything.  NetSuite built everything at once, more or less, but started as an ERP company and its DNA remains squarely in the back office.  Ask CEO Zach Nelson about his approach and he’ll tell you that ERP is the system of record, period.  I am not saying any idea is good or bad.  The companies I’ve named have been very successful and they are long lived.  But past performance is no indicator of the future, as they keep telling me in the mutual fund industry.

    Siebel was a successful front office company that never expressed interest in developing back office technology.  Siebel’s expressed strategy was to be a good integration partner.  They might have pursued a strategy like what I think Salesforce is pursuing but they ran out of runway.  The product had issues and there were reputation issues that may or may not have been their fault and the investors grew impatient.  At any rate, Siebel became an asset of Oracle and continues to be the backbone of Oracle’s CRM platform and it is integrated well with Oracle Financials at this point.

    The other day at a lunchtime Q & A in New York, Benioff was asked directly if Salesforce would turn more attention to the back office.  It was a logical question for many reasons.  We are in the midst of a replacement cycle in ERP for one thing.  The systems in use today were put there a decade ago or longer largely by companies looking to beat the millennial clock.  Ten years is a long time in the software business and those ERP systems are ripe for replacement.  Indeed many vendors are staking their strategic lives on the replacement cycle.  But not Benioff.

    At the Cloudforce 2011 lunch in New York, Benioff patiently explained that Salesforce has a budding ERP system in FinancialForce and the company has a strong partner base and that its products are open allowing for easy integration with any products including ERP.  But he resisted the idea of becoming a back office company saying that Salesforce would not build an ERP system and instead questioned the logic of the front to back office product line approach today.

    According to Marc, with partners and integration capabilities and openness the primary reason for integrated front to back office solutions looses steam.  What was once received wisdom just a few years ago, that customers ought to buy all their software from the same source — products already integrated — no longer holds in the modern cloud economy.  As important a statement as that is though, it was not Benioff’s major point.

    Marc’s big idea and strategic vision is that the front office is still being built out and Salesforce intends to continue leading the charge into what it sees as fertile, if still undiscovered, new territory.  One might think that sales, marketing, service, support, help desk and field service filled up the available niches and for a long time there was little argument with that idea.  But the application of social technology to conventional systems has raised everyone’s sights.

    The introduction of Chatter and the less well appreciated (as social applications) Sales Cloud and Service Cloud indicate that Benioff might be right.  The biggest part of the front office might still be awaiting invention.  This idea motivates Salesforce and Benioff’s belief that his company is building a customer information system.  The final form of the customer information system may still be years in the making and it might not come to fruition or Salesforce might not be the company to accomplish the task.  But as things look today, it’s hard to argue with — and hard to find a company with a better front office vision.

    So as the rest of the industry’s suite vendors pursue a front and back office strategy Salesforce is pursuing a market whose outlines may be clearly defined as social but their forms still need filling in.

    In addition to social aspects there is also the multi-tenant cloud computing imperative.  In a world of increasing energy and transportation costs and increasingly mobile computing the future looks less like a front to back hierarchy and much more like a mashup governed by openness and standards based API’s.  In that world Benioff’s strategy makes very good sense.

    Published: 803 days ago


    Sometimes I feel like we’re stuck in the weeds with Social CRM.  Hopefully I will get a lot of mail for this, LOL!

    No, really.  Sometimes I feel like we’re missing the bigger point of social CRM because we’re spending so many brain cells focusing on the technology and not so much on what it does beyond the basics.

    I know, there are plenty of examples of analyses that say what a wonderful job social media does in connecting everyone or improving the customer experience, but the discussion tends to stop there.  If it went on, which I admit it sometimes does, it would talk about the wonderful reasons for caring to connect everyone, namely the opportunity for mass collaboration.

    I have been guilty of coming from the other direction for a long time and talking almost exclusively about mass collaboration.  Neither has been terribly useful IMHO though the technology approach at least got a lot of people to try it out while the mass collaboration approach is known to a smaller group of technology aficionados.

    The “Gee isn’t this cool technology” approach is a phase but so is the other.  Cool technology launches early adopters and who is to say they’re wrong?  They are the folks who actually come up with the practical applications for a technology that guys like me write about.  We’ve been in the cool technology phase for a while now with Social and perhaps that time has been extended by the recession.  Fewer companies are willing to take on something that has little track record when the name of the game is revenue.

    Perhaps that’s why I am becoming such a fan of Chatter from Salesforce.  It’s not a perfect product, but for something so new it commands a lot of attention.  It’s often compared to Twitter or Facebook but for the enterprise.  Not a bad strategy for a new category—compare it to something that is popular—but the comparison leaves Chatter at a disadvantage because it’s more than that.

    While Facebook and Twitter enable a certain kind of mass collaboration, it’s all personal—you and your friends massively collaborating about things tangential to or part of your life, pretty much.  Chatter does the same thing but if we leave the discussion here, we miss much.  In a business context massive collaboration has an output associated with it called co-creation of value.

    Co-creation of value is most commonly surfaced when we talk about interactions with customers that surface unmet needs and desires.  But the massive collaboration within an enterprise can be just as powerful if it surfaces needs that exist in the moment and if those needs can be communicated to all those who have a stake in a customer outcome.

    Salesforce’s approach to capturing input through social media in ways that can be monetized goes deeper than Chatter to the Sales Cloud and the Service Cloud.  In their own ways, these tools capture input from sales people and customers respectively that can do much more than trade information about personal matters.  They all create some form of intellectual property that is of value to the organization.

    This is all a long way from being “like” Facebook or Twitter and it’s a dividing line between social media for personal use and social media for corporate use and that’s why I say Chatter is a new category.

    Even more important than figuring this out—I am sure you already did, I am just slow—is that for social CRM to be an important attribute leading us out of the recession, it has to be able to show an ROI and I think this is how you do it.  Massive collaboration leads to unique intellectual property.  What could be better?

    Well, have you seen at gas prices lately?  They jumped twenty cents at the beginning of October in my neighborhood and they were already in nosebleed territory when I was in San Francisco for Open World.  Four bucks a gallon was a contributor to the recession and we’re getting back to that range now.

    That price won’t stop people from driving totally but the Transportation Department did note that we drove 122 billion miles less in the year when gas prices spiked, so it had some effect on business.  Add to that jet fuel prices synch with gasoline and you get some worrying signs.

    If we’re heading toward costly transportation in the near future, we’ll need some help replacing transportation with the next best thing.  To my mind that isn’t massive adoption of Skype video calls, though that’s a good idea too.  To me the no-brainer is enabling massive collaboration throughout your shop.

    I just wanted to share this with you—and I do not own any Salesforce stock by the way (NYSE:CRM).

    Published: 950 days ago


    One of the fun things about being an analyst in a market where there is as much innovation as you can find in CRM is that it’s all so unpredictable and surprising.  As I was researching social media in the context of Salesforce.com’s Sales Cloud and Service Cloud recently, it struck me that something very different was going on.

    Very often vendors describe their social CRM offerings as extensions to an older paradigm of CRM, one that I think is vanishing and becoming hard to reconcile with the reality of today’s marketplace.  Over the last several years I’ve watched as social CRM has tried to find its voice and I have not always been in agreement with its early deployments.

    Social media in general are powerful tools for researching, reaching and maintaining contact with large numbers of people, most of whom are casual acquaintances.  To many, it would seem that social media would therefore be an ideal mechanism with which to advertise and market to a large homogeneous market.  But though the market is large it is no longer uniform — if indeed it ever was.

    Social media’s dominant characteristic, its social aspect, means that recipients can screen or block out unwanted content.  That might not be something new, for instance, in broadcast advertising you can always walk away, lower the volume or use a DVR device to record and then skip over unwanted content.  However if you want the programming, the good stuff, eventually you have to let yourself be minimally impacted by the ads.  Not so with social media.  There’s no sponsor and therefore no bills to pay, broadcaster and content are fused and the receiver has a simple choice to follow or not.

    So, for many reasons I have never thought of the marketing idea as a particularly great fit for social media or social CRM.  That’s not to say that social media can’t be made integral to CRM.  I believe it can but that the integration has not been figured out yet with the possible exception of the Sales and Service Clouds from Salesforce.com.

    The Salesforce Clouds are mature in their deployments but possibly they are not so mature in market perception.  While they are somewhat outward focused, there is a lot that they do that is focused on the internal workings of the company — a trait that appears to be held in common with the soon to be released Chatter product.  The internal focus is surprisingly powerful and productive and even opens up a new way of looking at common business processes in sales and service.

    The commonality in these products is that in very different ways each helps an organization to capture intellectual property from sales and service almost like a device that re-captures waste heat from an industrial process can improve efficiency and reduce costs.  For me that revelation was both surprising and showed an elegance of understanding the core processes.  It also hints at one of social media’s true benefits for CRM.

    If you haven’t studied Salesforce’s application of social media to sales and service, here’s a quick primer.  The Sales Cloud captures metadata generated by a sales team in the course of its work.  In a short time, the metadata can, using simple analytics, tell a user about success and failure patterns inherent in the sales practice.  So which documents, strategies, tactics and presentations work best.  The system has many other attributes such as enabling a user to select, edit and transmit appropriate documents, identify prior deals for study and emulation and more.  Social techniques for ranking and sampling the wisdom of one’s colleagues makes all this work.

    Salesforce is not the only vendor exploring this fertile ground — Oracle has a content library that aims at a similar process and independent companies like Kadient refer to this collection of specialized knowledge as “playbooks”.

    On the service side, search engines, Twitter and Facebook play an integral role in helping an organization to know about its customers service issues so that it can take appropriate action.  Often that action includes dispatching solutions that other customers might have already voluntarily provided to others either directly or through social media.

    These descriptions are oversimplifications of the real processes and I leave it to you to check them out in more detail.  But my point about intellectual property holds.  A company generates a great deal of intellectual property within its business processes and while companies do a good job in the back office, operations and manufacturing, there’s never been a good way to capture that waste heat in the front office.

    Sales teams often reinvent the wheel for every sales process or sales representatives cling to one course of action, or maybe one product, because that’s where their expertise is.  Capturing intellectual property generated by the whole sales team offers at least the chance that it can be shared and that it can positively influence future deals.

    You can say much the same about service intellectual property because service solutions are unique to an organization and using social media to capture user generated service solutions is a great way to lower costs and improve service.

    Taken separately or together, these solutions represent an improvement on older processes and represent a great fit for social media.  This is a great productivity boost and it’s worth noting that it couldn’t have happened until employees and customers developed facility with the Internet and Web based social applications.  Observing the human element’s impact is what makes my job so much fun.

    Published: 1175 days ago


    What exactly is Cloud Computing?  The question just doesn’t go away and as the year starts SugarCRM has just released a white paper — “The Sugar Open Cloud” —offering its definition and its argument for why its vision is superior.  I am not sure about either.

    Full disclosure: I like SugarCRM and have a lot of respect for what they are trying to do.  The idea of open-source CRM is very appealing and can be very successful — like open-source operating systems (think Linux), open encyclopedias (like Wikipedia) and open source web servers like Apache.  All of these open source products are very good in their own right and highly sought after.  Let me give just one example of open-source success — Apache has 52% of the market for web server software.

    In his new book, “Drive: The Surprising Truth About What Motivates Us,” Daniel Pink says that one of the key values to those who contribute to open-source technology is the sense of accomplishment that goes with participating in a project whose goal is the greater good, to solving a really tough problem.  To this idea, I would also add customers leveraging products like Salesforce’s Service Cloud to provide accurate support aid to their fellows using social media, search, email and other modern technologies.  They get no pay other than to stamp their name on a solution and that’s a surprisingly effective motivator.

    The only issue I have with open source is the business model and how you make money with it.  Well, how do you make money with it?  It’s a question that has vexed me and probably a lot of B-school kids, professors and practitioners for a long time.  The psychic rewards are good but they just aren’t enough.

    It is with this frame of mind that I read the Sugar white paper.  The paper says that we have entered the third phase of the evolution of whatever you wish to call SaaS.  First there was the ASP model that crashed and burned for economic reasons — you couldn’t get enough client-server users onto a server to be cost effective.  Then there was multi-tenant SaaS, which has had our attention for the first decade of the century.  Now, according to Sugar, there’s “multi-instance distributed SaaS”.

    According to the paper the multi-instance version is superior for many of the reasons we heard when multi-instance went by the name of “hybrid” such as you could deploy it in an on-demand way (single or multi-tenant) or in a traditional premise-based configuration.  What’s different with multi-instance is the freedom to pick your infrastructure provider, and here the waters get murky.

    Sugar claims its solution is superior because it enables users to choose which servers the applications run on such as Microsoft Azure or Amazon EC2.  This is superior to vendor lock-in according to the paper which makes the incredible and self-contradicting claim, “In the first phases of SaaS (ASP and multi-tenant SaaS models) customers had no options around who hosted their business applications as the software vendor was the only service provider.”

    Really?  Two pages earlier the paper displays a table of data titled “The ASP Model” the bottom row lists Key Providers as Corio and USi.  I was a CRM analyst (still am) when those companies roamed the earth and neither one was a software house.  The big dog in that period was Siebel and they didn’t care who hosted their product.

    Sugar makes the point that Cloud Computing is becoming an indeterminate term, meaning that the definition is set in Jell-o.  That’s fair.  The Cloud needs to have three parts — infrastructure as a service (IaaS), software (SaaS) and, now, a development platform (PaaS).  Companies that want to offer infrastructure or software only or to cobble together best of breed Clouds are free to do so and I am sure you can get a lot of value that way, though you will need to invest more effort and cash to accomplish your own integration.  But don’t worry, there’s an (Sugar Cloud Console) app. for that.

    What concerns me about all this is what manages to not be said.  Cloud Computing is largely an economic issue and a necessity at that.  It’s about a great deal more than lowering the cost of computing so that a larger audience in emerging markets can access technology.  And it is certainly about more than where data is stored.  From what I have seen about hackers stealing sensitive data, corporate IT departments are the last place I feel comfortable storing my personal information.

    Cloud Computing is not about the tired arguments about where data is stored or the “freedom” to move it from one vendor to another — that base has been covered.  The Cloud is about ubiquity of computing access and that’s an economic driver.  Historically, when computing power has become abundant and cheap innovations such as relational databases, the graphical user interface and the Internet have swallowed it up.

    The new ubiquity spawned by Cloud Computing — all three components — is spawning new, fast and, above all, mobile business processes, not just applications.  This may not seem like much but in a world that is growing increasingly “Hot, Flat, and Crowded” as Thomas Friedman would say, this is the bedrock of sustainability.  In this context arguments about where data is stored and vendor lock-in seem trivial.

    Published: 1202 days ago