Dreamforce Report: a disturbance in the Force

Dreamforce 2007 sees Salesforce.com set out its stall with new tools, new brands... and Mr Star Wars himself, George Lucas.

By Stuart Lauchlan, news and analysis editor

Not so long ago, in an apartment not too far away from San Fransciso’s Moscone Convention Centre, Salesforce.com was born. Nine years later – at a conference keynoted by Star Wars creator George Lucas – the Force was stirring as the firm went through its latest rebranding exercise. It’s been a long journey in a short space of time...

“We had been drivers of innovation at Oracle around client server We wanted to become the driver of innovation in on demand. We wanted to stand on shoulders of Google and Amazon who had come before us,” recalled CEO Marc Benioff this week as he opened day one of the Dreamforce conference. “Some of the largest companies in the world are [at the conference] and some of the smallest. The power of that is multi-tenancy. You cannot have on demand without multi-tenancy.”

"It’s platform as a service, but we needed a better name for it. So the name is Force.com." Marc Benioff, CEO, Salesforce.com

This week’s main announcements for the SaaS faithful included the launch of Force.com, Salesforce.com's new brand for its platform efforts, and Visualforce, a toolset for building custom user interfaces. “We’re talking about the platform as a service,” declared Benioff, insisting that this focus was also inspiring an unusual feeling in a post-IPO firm. “The more time we spend with our platform, the more it feels like a start-up again. Even though we’ve been going for nine years, it feels like a start-up.

“Our story started in a small apartment in Montgomery Street in San Francisco. We wanted to build a simple contact manager, but something amazing happened when we released it. We talked to our customers who said we are in different markets and geographies and time zones. Customers said we are in healthcare, we don’t talk about accounts. There’s no way we are going to build every application for every market. Customers wanted custom tabs, for example, so we let them do it.

“They have made 6.2 million customisations that we store in our database. They’ve created 44,000 custom applications. They’ve made 18.7 billion API calls on our database. They have made 176,000 custom objects. It’s amazing what they are doing: they are modifying the system to make it just for them. They’re creating new SaaS apps that we didn’t even dream of. We’re building more platform services for them and more operational services for them so that they can focus on the fun stuff. We want them to take care of the innovation and we take care of the infrastructure. It’s platform as a service, but we needed a better name for it. The name is Force.com.”

Corporate name change?

But does the firm really need more rebranding? “We needed a name change because the message wasn’t clear enough. The most important thing is to communicate to customers that we have an applications strategy, that we are a multi applications company,” said Benioff. “A lot of our customers still think we have only one application. Customers need continual communication and evangelism. We want to explain and demonstrate the full range of applications and platform.

“We might have a customer where we have a 10-20 percent penetration. We might run the sales organisation, we may run the call centre, but we don’t run their truck drivers, we’re not on their shop floors, we’re not doing the content automation and so on. For customers we have to take a long view. It’s taken almost a decade of work to get where we are with SFA. Oracle is almost three decades old, Microsoft started in 1977. For us we’re trying to create these application markets and create evangelists. Even though I get it, I can’t take for granted that customers do.”

But there’s no prospect of a corporate name change. “The company name is still Salesforce.com and the ticker symbol is still CRM,” observed Benioff. “We lead with our applications and particularly with our salesforce automation. CRM is a good market and on-demand CRM is great. Once we own the on-demand CRM market and we can defend our position with the platform as the weapon, then let’s ask what else we can do for customers. I would never change the company name unless we had a name that had significant equity that would excite customers. The deals that we work on remain the biggest in the IT industry. CRM is hot. The name is such good karma for us. We’ve made it mean more than CRM and SFA.”

Despite the presence of Lucas, the Force angle is not a Star Wars thing. The rebranding is such that www.force.com - which might be expected to have belonged to the Skywalker camp – now takes you to Salesforce.com. (This is presumably a nice bonus for the original owner, one Gordon Force, Snr, who registered the domain in the mid-1990s to host the website of Force Technology and has been sitting on the URL for the past four years while Salesforce.com tried to buy it off him!)

So what is Force.com? It’s a developer platform which provides developers with the back-end infrastructure and logic to design applications. A major plank is Visualforce, an on-demand user interface capability that lets customers and ISVs build a user interface with the look and feel of their choice. Users are able to take a standard Salesforce user interface and tweak it to look like a stand-alone application.

Taking the Mickey

None of this impressed rival SaaS vendor NetSuite. “What they've announced is basically what we announced at our developer conference last October with SuiteScript UI Objects,” said NetSuite CEO Zach Nelson. "Visualforce is being positioned by Salesforce.com as a means to allow developers to build custom interfaces within the salesforce.com environment. Great idea – that’s why we came up with the idea. Our partner community has been using these technologies to build vertical and value-added solutions for over a year; the new Visualforce tools won’t be available until early 2008.

"As part of Visualforce, Salesforce.com is touting that they will have a built-in visual editor for their proprietary APEX language. We think this is a negative, not a positive thing. We believe our approach of allowing developers to use JavaScript is actually better because developers can use the standards-based editor tools they are already familiar with.

“The other stuff they are touting as new – in-line editing and historical currency rates... NetSuite has had both of these for more than four years. [They say] ‘inline editing is the most popular feature included in Salesforce Winter '08.’ We introduced it in version 9 in 2003, only four years ago. I’m surprised it took them that long to copy it! Support for multiple currency rates is such an obvious requirement for supporting multi-national transactions that we’ve never announced it! We’ve had it since 2002."

But Benioff was able to cite some happy customers and partners, among the more interesting of which was Walt Disney, which doesn’t have a big sales organisation but did have a problem. When Mickey Mouse goes out and about on public appearances, he can’t be like Santa Claus and appear all over the place. In fact, he’s not allowed to appear in more than one place over any particular period of time. Disney needed to have an application which could manage his brand appearance and ensure that the mouse was never in the same place twice or ended up in any compromising environments. “Disney needed tabs like cast member and costumes and external events,” said Benioff. “It wasn’t a Mickey Mouse application; it was an application to manage Mickey Mouse.”

Following a shoot out with a developer team from Microsoft, Salesforce.com was named as one of only three approved development tools at Disney. According to Anthony Scott, CIO Disney: “I can create apps faster and cheaper with Force.com than what I used to do with Notes PBUilder, Visual Basic and SQL Server or client server tools.“

A new vision

From an ISV point of view, CODA is to develop an on-demand financial system built natively on Salesforce.com’s Force.com on-demand platform. CODA 2go will be “a real-time, global finance system” delivered on-demand. The first release of CODA 2go is expected for delivery during early 2008, and will address revenue management, including creating and managing sales orders, generating invoices, posting cash and cash management. The service will then be quickly expanded to cover procurement and the full range of financial management activities.

“Software as a Service is a logical extension of CODA’s ‘open platform’ commitment. Delivering CODA 2go on salesforce.com’s Force.com platform will allow CODA to offer our product portfolio to a far wider range of businesses,” said Jeremy Roche, CEO of CODA. “CODA 2go is a powerful unified ledger accounting system that addresses the needs of organisations from tens of employees to tens of thousands. Good financial control matters to big and small organisations alike.

"We decided that we wanted to take enterprise-level accounting functionality and offer it to customers of any size, anywhere in the world. The only way to do that was through multi-tenant services. We decided that we wanted to do for accounting what Salesforce.com has done for CRM.”

Analyst firm Ovum largely approved of the announcements. "Looking first at the applications domain, salesforce is very keen to position itself as the 'multi-application' company, in other words it's not just about salesforce automation," said analyst David Bradshaw. "As we've said before, we think that the service capabilities in Salesforce are a hidden gem, and one that customer are largely ignorant of. Salesforce's customer base remains one largely for salesforce automation, with much lower uptake of the other applications like partner relationship management, marketing automation as well as service and support. Salesforce seems a little ambiguous over this situation, perhaps with good reason, because sales force automation is still bringing in strong growth for the company, and the other applications remain potential sources of more revenue - but it's frustrating that the penetration of the other applications remains so low.

“Turning to 'platform as a service', this means offering an on-line platform with the application development, data storage and other tools required to run multi-tenanted massively scalable applications. Salesforce already proving a on-line platform for the applications of its App Exchange partners, though some of them place most of the functionality on other servers. Also Salesforce has CRM customers who have developed their own applications and have them hosted by salesforce. However, it is keen to extend this type of business further.

“The added spice to the mix is Visualforce, a tool for building user interfaces that quite different from the traditional salesforce look and feel, and that also can run on different devices, suck as kiosks or mobile phones - an example UI running on the iPhone was showed on-stage.

“Visualforce removes a major restriction on the appeal of salesforce's platform to third-party developers. Until now any applications on the salesforce platform had to look like Salesforce's own applications, because they had to use the same look-and-feel as salesforce's own application. This doesn't matter to much for applications on the AppExchange because targeted on the salesforce customer base, either directly - they are extensions to Salesforce's capabilities - or indirectly - they are aimed at the salesforce user base). In contrast, Visualforce makes it possible to write 'independent' applications that look nothing like 'traditional' Salesforce applications and that can be aimed at a wider audience.”

All of this means a shift in the nature of computing, said Benioff and in the role of the CIO. “It’s evolving. The CIO used to be the chief infrastructure officer, hooking everything up and putting in the wires and the hubs and the routers,” he noted. “Once the infrastructure was installed, they became the chief information officer, but they were held back by updates and upgrades that they had to manage and with the problem of not delivering value to the business that it needed as changes occurred.

“The new role of the CIO is the chief innovation officer, the hero to the business. Gartner Group says that $8 out of $10 spent on IT is dead money. The old software model is obsolete. Customers don’t want to buy the directory servers and the database servers and have to update and maintain them. That way, they can’t deliver enough value. They want a new vision, not a new version.”

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