TECH BLOG
Nimble Salesforce Scoops Sluggish Giants With Facebook Play

You can't say you were not warned or that you had no idea of what was happening. The socialization of CRM took a big step forward on Monday when Salesforce.com (NYSE: CRM) CEO Marc Benioff told the keynote audience at Dreamforce 2008 in San Francisco that his company has developed technology that will integrate Facebook and Salesforce.com.

Amazingly, despite all of the talk about marrying social media and CRM that has taken place over the last two to three years, it was not any of the larger and older (and richer) software giants that made the announcement. Instead, it was a relative newcomer yet to celebrate its 10th birthday, and with revenues only a fraction of Oracle (Nasdaq: ORCL) , SAP (NYSE: SAP) or Microsoft (Nasdaq: MSFT) , that made the news. Perhaps that was not surprising since Benioff has made a career of upsetting the other players' applecart.

In a two-hour speech that only covered the company's platform technology (applications are scheduled to be addressed on Tuesday) Benioff announced new application development technology for the Force.com platform, which the company calls "Sites" and showed how Sites enables developers to build customer-facing applications that link in data from such popular social media sites as Facebook and soon other social sites such as MySpace and LinkedIn.

Integrating With the Top Dogs

At a luncheon meeting that featured a two-hour question and answer session for industry analysts, bloggers, reporters and financial analysts, Benioff said there is no reason to assume that the Facebook integration will be unique. "We just think that when you do something like this, you work first with the leading vendor," he said at the session. Indeed, the company also announced that Force.com Sites has already been integrated with Amazon.com's (Nasdaq: AMZN) and Google's (Nasdaq: GOOG) platform technologies as well.

The significance of these announcements can be easily missed. On one level, building functionality that enables companies to create customer-facing applications on the Web sounds like an evolutionary step but one that is hardly revolutionary. The use case cited in discussions was a recruiting application posted on a company's Web site in which developers use Force.com Sites technology to build the application rather than an array of Web development tools and databases that need to be managed in-house. In the example, developers simply use the Force.com tools they are familiar with and turn them toward the Web site and the public.

Salesforce.com sees a market not only for customer-facing applications but whole Web sites as well, though the technology is not targeted at simple sites that act more or less as brochures for their sponsors.

Because It Can

The announcement takes on greater significance when social sites like Facebook are brought into the mix. Using Facebook's widgets and up-to-date demographic data, companies can develop applications that leverage customer knowledge that enables them to better sponsor and understand communities of interest without the expensive and time-consuming effort of keeping a customer list current.

By definition, a user of Facebook or other social site will keep his or her data current out of necessity, and this will move us a long way toward relieving the problems associated with aging lists and duplicate entries.

So why didn't Oracle or SAP or Microsoft come to this conclusion and build a product? A good question. The answer rests less on technology -- any of them could develop the technology -- and more on temperament. Of the four companies, only Salesforce.com has an on-demand or Software as a Service vision not clouded by the need to preserve a massive legacy code base and the considerable revenue stream it represents. In short, Salesforce.com did this because it could and because it has a clear understanding of the future of computing.

Other companies -- most notably Oracle -- have recently introduced social CRM applications, and they have been good and welcome additions to the technology mix. However, these introductions, by comparison, nibble around the edges of social CRM using some of the "wisdom of crowds" ideas inherent in social media without solving the biggest issue of incorporating customers in the mix.

Of course, there was a lot more announced and introduced on day one of Dreamforce, but this analysis is only intended to focus on what I consider to be the biggest news.