U.S. firm bets on hosted CRM market

The recent opening of a Toronto office signals a renewed commitment to the Canadian hosted applications market, according to Salesforce.com’s Jim Steele.

The president of worldwide applications for the San Francisco-based hosted customer relationship management (CRM) provider was in Toronto in October for the official launch. The move is part of the firm’s strategy to actively recruit Canadian organizations, Steele told ComputerWorld Canada.

The fact that vendors such as Microsoft Corp., IBM and Siebel Systems Inc. have entered the on-demand CRM market bodes well for the future of “software-as-a-service,” Steele said.

Looking at possible ways to incorporate hosting applications within the enterprise is Gerry Fitzsimmons. As the national service manager for Toronto-based Cimco Refrigeration, Fitzsimmons said the company is seeking to implement a unified process for all its national accounts.

Any concerns regarding hosting applications, including to what extent such applications can be customized, or how easily they can integrate with existing applications, is largely a non-issue, he added. “My concern about a hosting service is that if it goes down, then I lose everything,” Fitzsimmons said. “But I can see easier ramp up and easier go live. You can do it in bits and pieces.”

While he doesn’t foresee his company having all its applications hosted, he acknowledges the growing appeal of the technology. “Hosting services is getting bigger and bigger. Some of the advantages [include] upgrading the version across the board overnight and having access anywhere.”

Also, having a hosted solution is much more amenable to implementing a wireless infrastructure, he added.

Steele noted that rival Siebel Systems Inc. in particular has again embraced the hosted application model. The company recently acquired online CRM provider UpShot, a situation that Salesforce.com hopes to capitalize on. Salesforce.com has recently launched its SureShot Migration Program to Siebel UpShot customers, Steele said, which enables users to import UpShot data into Salesforce.com.

Salesforce.com will offer free training to users in the migration program, Steele said, adding that customers can use Salesforce.com’s CRM service at no cost for three months, after which Salesforce.com will honour the terms of their existing UpShot agreement for an additional nine months.

Siebel’s strategy is designed to give companies the choice – or any combination of – on-premise or hosted CRM. But according to Salesforce.com’s Steele, customers aren’t looking for both on-premise and hosted CRM solutions. Nevertheless, some companies are already using hybrid approaches. Mississauga, Ont.-based Canon Canada Inc., for example, uses RightNow’s hosted eService Center for its consumer Web customer support tool and on-premise PeopleSoft CRM for managing its inbound customer activities.

Steve Mackay, senior manager at the Canon customer information centre, said that linking the two systems allows Canon to apply the same business rules, escalation rules, and notification processes. “It allows the agent to get a holistic approach to the customer experience,” Mackay said.

According to Warren Shiau, a software analyst for IDC Canada Ltd. in Toronto, in Canada the hosted applications model has yet to make a huge splash.

“In general, Canada isn’t a huge hosted applications country…as far as the enterprise applications are concerned.” That’s because Canadian organizations by and large haven’t made the move to outsource applications such as CRM or human resources in the first place, Shiau added.

But the concept of software-as-a-service is gaining momentum, particularly as a product that enterprise vendors feel they need to offer. Canadian companies will likely stick to their current software licensing model, but are looking at the hosted model as an option, Shiau said.

Jockeying for position

Salesforce.com used its inaugural Dreamforce User & Developer Conference earlier this month to launch the Winter 04 release of its hosted CRM service. The company unveiled Version 2 of Sforce, its XML-based platform for corporate developers. Sforce is designed to extend Salesforce.com’s capabilities by providing customizing and integration tools for the application.

Other extensions to the platform include S-Controls, which allows developers to customize the user interface to create forms. It supports any client-side browser technology, including JavaScript, DHTML and .Net controls, and Web services user interfaces such as DreamFactory, according to Salesforce.com.

On the user side, the company is also adding dashboards, real-time alerts, contract management tracking, and workflow automation to trigger business processes.

Siebel is also working on integration and claims to have 140 integration applications in place, of which 70 are specific to vertical industries. According to Siebel, the company has an additional 100 integration applications under development.

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