I saw Marc Benioff in New York just after Labor Day. He was in town for various business reasons and hosted a dinner for a group of customers, analysts and journalists.
It was a very interesting group though also informal — there were no speeches or presentations and no need to drag out the safe harbor statement. Benioff spent a few minutes with each person and showed a very good understanding of each customer’s use of his software as though he must have taken part in the sale and implementation personally.
What was interesting to me was that some of the customers were nonprofits whose token use fees were not doing anything exciting for Salesforce.com’s bottom line. For example, there was The Bronx Lab School principal Marc Sternberg whose high school used the Salesforce.com service to build a student tracking application that connected students, faculty and parents in what I can only describe as a learning Web. If it takes a village to raise a child, the village schools of the future will probably communicate using a system like this one.
At the end of the night Benioff said goodbye to each and encouraged them to attend Dreamforce, which runs from Sept. 16-19. Most said they would be there and in fact the user group meeting that moved to San Francisco’s Mosconi Center just last year, is expected to set another record for attendance when it convenes in the middle of the month.
Dreamforce has become one of the must-attend events on the IT calendar in the last few years. Its importance ranks with SAP’s Sapphire and Oracle’s Open World as events that transcend being simply meetings of specific product users — these meetings have become the defining events in their spheres. In Salesforce.com’s case, Dreamforce is the epicenter for pioneers and thought leaders in on-demand computing.
As with any gathering of this magnitude, what the company announces will no doubt set at least some of the direction for the industry in the year ahead. What Salesforce.com may announce is a closely guarded secret — the company is watertight when it comes to information leaks — but we can make some educated guesses based on previous announcements and stated directions. Here are my thoughts.
Salesforce.com’s bread and butter is CRM and despite great progress in its platform services, CRM is where the company will earn its living in the year ahead and it needs to continue to exert leadership there. I expect the effort will be focused on vertical markets.
The company has already made some inroads into financial services with an application for financial services advisors and I expect it will continue in that direction with additional modules such as retail banking or insurance. Dreamforce might be the place to make such an announcement. In addition, there will be less flashy but welcome enhancements to the service driven by user feedback.
Other vertical announcements are certainly possible, and the company has skunk-works projects ongoing with customers in a wide variety of fields, so it’s hard to say where the next vertical might be.
I think we will see the fulfillment of some promises made earlier this year relative to doing business on the AppExchange platform. With the recent full release of the Apex programming language I think there will be small enhancements to the technology, but the big news should be in the online store that the company began talking about almost a year ago.
Briefly, Salesforce.com is offering multiple options for its developers that off-loads as much or as little of the responsibility for selling and servicing third party applications as the developer wishes. So for example, a small group of developers that builds a product but does not wish to build a company to market, sell and service it, could assign all of those duties to Salesforce.com.
The net result would be that the company would receive a check on a monthly basis net of any agreed upon costs that Salesforce.com might take for providing those services. Other developers might still choose to operate in a more traditional mode.
A few years ago I suggested in a white paper that on-demand computing might result in this kind of two-tiered business structure with a third party developer, and a central entity I called a publisher and I think this developer/publisher model is coming into view. These are the details that I will be looking for at Dreamforce.
The other area that I see as ripe for a big announcement is in new partnerships especially in ERP. On several occasions Benioff and others including Parker Harris have stated their complete lack of interest in building their own back office/ERP applications but the need remains.
I think it is becoming increasingly important for front office companies to have a stronger story to tell about front-to-back office integration. Up to this point, it has been enough to offer good integration capabilities and to provide the customer with the freedom to implement whatever back office strategy it wanted, but I think that era is ending. Companies are looking for process integration not simply data integration, which means more than typical integration provides and I think delivering pre-integrated process is going to have some appeal.
With the introduction of Workday by Dave Duffield and his partners, we now have the promise of an integrated suite of on-demand back office applications, and I think we could see Workday quickly become a standard, if only because there are so few on-demand back office suites yet. If I was Salesforce.com, I think I would want to get out front on this issue up to the point of announcing a relationship with Workday.
I should point out that I have no special knowledge of what Salesforce.com might announce and I could be wrong on all counts but these are certainly areas that might draw attention.
We just have to wait till the keynote.
Denis Pombriant is the managing principal of the Beagle Research Group, a CRM market research firm and consultancy. Pombriant’s research concentrates on evolving product ideas and emerging companies in the sales, marketing and call center disciplines. His research is freely distributed through a blog and Web site. He is working on a book and can be reached at [email protected].
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