This week’s Dreamforce event saw a lot of announcements – everything from an on-premise storage option for critical data to a development tool to allow customizations for Salesforce.com applications to work on touch-screen smart phones to a move toward ERP in the cloud. Unfortunately, the narrative doesn’t completely hang together, which is a shame; if Salesforce is great at anything, it’s telling a story, but at this point the story is so sprawling and so interconnected that it’s becoming hard to articulate the answer to the question “why.” Part of this is a result of Salesforce.com’s attempt to become an all-things-to-many-people platform, which is difficult at best, but part of it is a matter of “vision” outstripping concrete development efforts. Vision is great, but it’s no match for vision matched with results.
Before Dreamforce, we pondered the idea of questions we’d like to put to Marc Benioff in an ideal one-on-one situation. While getting that opportunity –and getting truly candid answers – is unlikely, a look at Dreamforce this year did provide answers to many of them:
1. Which of the CRM companies today would you say are giving you a run for your money?
Based on the new features introduced this year, Salesforce sees the market the way many do – as a battle between themselves, Microsoft Dynamics CRM and SugarCRM. Things like Data Residency Option (DRO) – a feature that offers the ability to store sensitive data on premises and off of Salesforce’s datacenter – replicate the model that already exists for SugarCRM (although its flexible deployment models come without the management burden that DRO suggests) and is in the offing from Microsoft. In a Q&A with media and analysts, Benioff said that DRO was intended “only for specific large customers to withhold specific information,” and gave the example of large financial institutions.
2. What are the top three innovations of Salesforce.com this year, and how are they reflected in costs charged to customers?
This year’s major push was on the “social enterprise,” and several modifications were added to Chatter to allow the tool to be a little more sociable (like social analytics the ability to invite selected customers to conversations). No news was released around additional charges to Chatter. DRO was also announced without pricing. The third major announcement was Thursday’s unveiling of a marketing automation and ERP partnership with Infor and a manufacturing partnership with Kenandy. Again, no pricing information was made available.
3. Why do you penalize customers for being successful?
This question remains unanswered or unaddressed. The crux of this question is this: as a customer grows, the amount charged by Salesforce increases disproportionately. It actually becomes more expensive to use when it succeeds. This is an unfortunate paradox that perhaps suggests a billing approach lost in time; it may have made sense when Salesforce was a champion of small businesses but it’s now obsolete – and it’s costing customers money.
4. When it comes to features, Salesforce offers an abundance. But why are the most valuable CRM features reserved for the more expensive editions?
Salesforce presents this costly billing issue as a matter of choice for their customers – if you can’t afford these features, you simply don’t have to pay for them. However, to paraphrase Orwell, some animals are more equal than others; at the show, Benioff introduced a “Social Enterprise License Agreement,” which includes access to Sales Cloud, Service Cloud, Chatter, Radian6, Force.com, Heroku and Database.com for the entire enterprise. Benioff characterized this arrangement as “the only way” that a company as large as Coca Cola could have become a Salesforce customer. Landing Coke was a big deal, but tacitly admitting that the Salesforce ecosystem of tools and applications was becoming prohibitively expensive was also a big deal.
5. You’ve said that enterprise software should be like Facebook. Can you provide examples of how Salesforce has been translating that into business results?
To their credit, Salesforce did illustrate how some major companies had implemented more social-like CRM approaches. These certainly paid off handsomely for Salesforce, but it was not clear what return Burberry’s three-week-old implementation or Toyota’s “friend your car” programs had yet delivered.
6. Salesforce.com is consistently one of the overvalued equities in the market. Are you contributing to the new bubble?
Perhaps. During the keynote, Benioff crowed about GroupOn as an example of a star Salesforce customer. GroupOn is the poster child of bubble companies: with an unsustainable 22,000 percent revenue growth last year, it currently owes its customers more money than it takes in annually, and its refusal of a $6 billion buy-out by Google earlier in the year may go down as one of the century’s worst business decisions. Not to be outdone, with costs rising and a second-quarter loss even as it raked in revenue at a $2 billion run rate, Salesforce itself looks poised to be a great Wall Street heartbreaker.
7. According to the Financial Times, you are one of the true masters of the art of sales pitching. Sell me on the higher cost of doing business with Salesforce.
We’re just going to imagine the answer to this one: no comment.
8. If social CRM is about customers, why is Chatter locked up behind the firewall?
In a fascinating response to the question of whether Chatter was social CRM or not, Benioff quite honestly responded that it was an “enterprise social network.” Although it has now added the much-needed ability to invite outsiders into Chatter conversations, these still take place within the firewall. This may appeal to businesses whose leaders fear losing control of discussions, but it’s still not true social CRM since it seeks to control customers and their participation in a manner dictated by the company.
9. What is preventing Salesforce from allowing a customer free access to its own data when it hosts their CRM solution with Salesforce.com?
Data access is still a sore spot with Salesforce. When Benioff was asked about “open data” today, he eluded questions around Salesforce’s obligation to its customers and instead chose to talk about how many potential Salesforce users were afraid of the idea of open data. This is unfortunate; although Salesforce has an impressive retention rate, customers often mention the obstacles placed between them and a useful, easily-migrated version of their data. Should Salesforce develop a more open means of providing customers with their data, they could develop a true measurement of the loyalty of their customers.
10. How did Yammer inspire Chatter?
There was little discussion of this at the show – possibly because Yammer opted to capitalize on the earlier controversy with a campaign describing the two products as “friends with benefits.” Salesforce frequently pays the greatest form of flattery to its forerunners in other fields – Chatter also strongly resembles Facebook, for instance – and this is in keeping with the company’s remarkable effectiveness at taking concepts pioneered by others, adding them to its ecosystem with a Salesforce flavor and linking them with other tools to increase their usefulness. They may not always be original, but they often are the first to reach customers with new ideas.