Dreamforce meeting schedule
I’m trying hard to make all meetings at Dreamforce. All that’s left is breakfast Monday to Thursday call for appointments 617-901-2072 cell or office 781-297-0066, Google voice 415-287-0427. Thanks. D.
The Subscription Imperative Revisited
As often happens in evolutionary systems, availability precedes demand. That’s a complicated way to say that we build products then figure out what they’re good for. It’s not that innovators develop things willy-nilly, but no matter how well thought out an innovation is, the marketplace has the last word on its utility. When we speak of early adopters and mainstream users it’s this dynamic we’re referencing.
In recent years one of the best examples of this evolution in action has been subscription billing. Today we speak of the subscription economy and subscription billing as mutually reinforcing but when it was first introduced subscription billing was targeted at a more narrow business problem. Initial buyers were companies that began offering their products as subscription services rather than as products to be bought once and then serviced. Their need was for flexibility, speed and accuracy in the billing process, things that conventional billing systems could not adequately handle given the number of customers and transactions that subscription vendors were encountering.
If subscription billing merely stayed in that expanding niche its future would have been assured as increasing numbers of companies were converting to subscription business models. But then the marketplace changed in two fundamental ways opening up even greater opportunity for the subscription model.
The first change was the rapid adoption of subscriptions as a new way to deliver products to customers. Subscriptions proved to be so much better than conventional purchases with their large cash outlays, that customers rapidly concluded that subscriptions were better. Market demand has driven numerous companies to scrap their decades old business models in favor of subscriptions. Those companies that have not converted see evidence mounting daily that tells them to convert of perish.
The second change, which has not been remarked on nearly enough, is the credit crunch that has hobbled the economy since the housing debacle of 2008. While business is still obviously being done, the economy is barely growing but a consistent bright spot is subscription companies because their business models enable customers to use their products while effectively amortizing the cost — without involving a lender. This enables them to sidestep a conventional financing process that is crippled due to still tight credit conditions resulting from weak bank balance sheets.
The subscription economy isn’t a band-aid that companies put on their business models to weather a tough economy. Driven by customer demand, the subscription economy is increasingly the way that customers prefer to do business and this preference is driving the market.
But the benefits that the subscription economy delivers are hardly one sided in favor of the customer. Vendors have discovered that their old billing systems had been dictating the kinds and types of products they delivered to the market. For instance, a good idea that could be built but not billed accurately and timely — which is the case with many subscription services — was simply a non-starter. But the flexibility of the subscription model enables companies to break their complex products into smaller units that customers can then assemble in ways that make sense for them. Customers are increasingly able to custom design products that fit their needs much better than the one size fits all products that are relics of the industrial age. And vendors can flexibly respond to customer needs even if those needs change very frequently.
The marketplace has discovered many uses for the subscription economy and its enabler, subscription billing in the handful of years since the idea was first introduced. As we can see, some of subscription billing’s uses were not even envisioned a few years ago but alert innovation by users and, especially, Zuora, have made subscriptions a phenomenon.
We’re certainly passed the early adopter stage in this market and mainstream adoption is well under way. Companies that once would not consider a subscription business model are discovering that with subscription billing they can make their transition and preserve their cash flows and in these tough economic times that says a lot.
CRM Idol
The CRM Idol competition starts this week. If you aren’t aware here’s the basic rundown. It’s the brainchild of Paul Greenberg who is no stranger to the speaking circuit and a believer in making CRM entertaining. Idol, as the name implies, is a competition focused on emerging companies and its purpose is to identify one of the hottest emerging CRM companies on the planet, much like its namesake looks for entertainment talent.
There are forty companies competing in the North American division and more in Europe and other parts. I am one of the judges. Our job is to take a one-hour briefing, which will include a presentation and demo from these emerging stars. To help them prepare for this big event Paul has recruited an army of people from many walks of life each of whom has direct experience with CRM to coach the new entrants in how to deal with Homo analystii in case it’s their first time.
We’ll be posting our analyses of these companies products and positioning within 48 hours of the briefing on the official CRMIdol.com site. This should be a lot of fun and I am looking forward to it though the pace for judges is fast. We’re taking four briefings per day for most of two weeks in order to get through all the contestants and to enable us to render our verdict in September.
This competition reminds me of similar competitions held at business schools where entrepreneurial students try to develop a company or product or business plan for cash prizes. CRM is also not new to this experience. Last year at Dreamforce Salesforce.com gave a one hundred thousand dollar prize in a similar competition for new applications based on the Force.com platform. As I recall BranchIt won and they sent me a scan of the check to prove it.
This whole process may be another indication of both the wiki-fication of business and just how embedded the wisdom of crowds is becoming in our culture. I say wiki-fication because this is certainly an acceleration of the company lifecycle and pooling resources to reach a goal faster. Some of the companies in the competition barely have revenues and many have professional investors involved in their success.
In the old days, i.e. last week, you could expect to work with investors and to raise several rounds of venture capital on your way from good idea to self-sustaining company. But the availability of things like cloud computing has driven down the cost of starting up with the result that people with good ideas don’t ask permission by seeking outside capital. They can do it on their own and not give away a big part of their ownership and control.
This is also obviously about crowd wisdom. I can’t say the crowd doing the judging is everyman, there are many knowledgeable CRM heads in the group, so this differs from true Idol voting and the vox populi verdict that the show uses. Still it’s more representative than a few investors trying to pick winners.
Just like the Idol show, the eventual winner will be showered with publicity and prizes and many of the top performers will receive free consulting from some of us involved in the process down the road. So I hope everyone with have fun and learn a few things along the way.
There’s some scary stuff in this too and to me it involves taking a company and in some cases the company’s founders out of their formative stage when they can make mistakes in relative obscurity. Idol shines a bright light on the contestants and while all relish the opportunity, I think I side with the Chinese on this in thinking, be careful what you wish for.
But all that’s beside the point now. The people in the competition knew what they were getting into. Someone will win and the winner will receive some great exposure and a chance to work with some of the biggest companies in CRM. Some CRM companies have promised to integrate with the winner and help them come to market. So there’s no doubt that the winner will have a turbocharged career from here on.
So that’s what’s going on this week and next. While you’re at the beach or preparing for Dreamforce or OpenWorld or all the myriad other events coming in September and October, we’ll be taking briefings with at least one company that will be rather famous a year from now. It will be fun to see how this rolls out.
Previewing Dreamforce
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.
Meet up at Dreamforce
Dreamforce is always crazy and I really try to meet up with as many vendors as possible but it’s a challenge. If you’d like to schedule a meeting with me I have openings on Monday and Tuesday MORNINGS, NO availability on WEDSDAY and I am open all day Thursday. Send a meeting place holder for my calendar and I will do my best to make it happen. Please include a cell phone number and a booth number if that’s where we’re gonna do it, or suggest another place. For your reference my cell is 617-901-2072. No meetings longer than 20 minutes. Thanks a lot!
