A subscription to enterprise-level CRM

For companies wary of committing to an 18-month CRM software rollout with a five, six or seven figure price tag, San Francisco-based ASP Salesforce.com Inc. has recently released the Enterprise Edition of its hosted CRM service.

Along with CRM features such as revenue tracking and the ability to redirect customer inquiries to an online service channel, the new Enterprise Edition promises customization, integration and administration capabilities so it can link to back-office applications, and is priced as US$125 per user, per month.

But with 3800 companies signed on to its various subscription services in only three years of operations, CEO Marc Benioff has an even bigger promise on the table. “We’re doing something very different and our message is very simple – we’re calling for the end of software,” he said.

Benioff said that Salesforce.com’s architecture is very similar to that of Amazon.com, another heavyweight online service.

“We run one of the largest Oracle databases in the world…in fact all 3800 companies run from the same computer in Sunnyvale, Calif. It’s a Sun E10000 surrounded by Dell computers running Linux, with our application server running on top of that. We’ve put an XML wrapper around this utility so that it’s a full Web service and it can operate with other utilities or software that’s running inside or outside your company,” Benioff said.

Although hosted applications are generally perceived to be less robust than licensed CRM suites, Benioff said Salesforce.com rolls out major updates every six to eight weeks. Additionally, he said “If somebody finds a bug, we fix the bug and every customer gets the change that day. And it gets populated into every system, independent of which of the four languages the customer is using.”

Noting that Benioff and company have captured a fair amount of business in the sales force automation sector, Mississauga, Ont.-based Elroy Jopling, principal analyst with Gartner Inc., said that they are doing some interesting things within the ASP format.

“Often with ASPs what they end up doing is just kind of replicating an application that’s out there already and don’t really bring in the advantages of what an ASP model can be. A good example is the way Salesforce.com is addressing the road warriors who are out there. If you start using wireless and hooking it up with your PDAs you certainly can have a much richer application than what (existed) prior to an ASP model, and you can offer the tools to a mobile sales force,” Jopling said.

This built-in mobility has been a big help to Tara McFadden, an inside sales co-ordinator for Guest-Tek, a Calgary- and Chicago-based company that builds high-speed Internet solutions for the hospitality market.

“It snowed in Calgary today and I didn’t get to the office, so I just hopped online and I was able to do most of my work,” she said. “I use [Salesforce.com] for lead processing, and it’s really flexible for keeping track of data, organizing data, pulling reports.”

McFadden said that at Guest-Tek both operations and sales staff – about 80 per cent of the company – use the service. So far her only complaints are the large number of options that make the application a bit cumbersome as it saves itself, and the fact that its speed slows down when she accesses it through the less-than-ideal servers at some remote locations she visits.

Although he said ASPs can make sense as a pricing delivery model, Gartner’s Jopling is not quite ready to predict the imminent end of software as we know it.

“Actually all the other software players that are strong players – the Siebels and the Oracles – will move in this direction. It kind of got carried away and there was a lot of bad press about ASPs and a lot went under, but that was a lot to do with poor financing and poor conceptualizing of the market. I still expect this model to become more significant,” he said.

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