Salesforce.com's EMEA co-president, Lindsey Armstrong debates what is really innovative in the CRM space and speaks out on the arrival of SAP on the SaaS scene.
By Chris Middleton
It’s more than 10 years since MIT’s Nicholas Negroponte began forecasting the death of the dinosaurs of packaged software and huge enterprise installations, and the birth of nimbler, faster software as a service (SaaS). A decade ago, the world was sceptical of such claims, as they joined a lengthy list of eccentric futures being promised by industry ‘futurologists’ who were mainly keen to keep their employers in the news. Most sceptical of all was an IT industry that was gearing up for the big enterprise sell.
Not long after those predictions were aired, of course, we witnessed the dot-com boom and bust, but few of the big beasts were wiped out; indeed, many of the new breed of supposedly more agile companies were swept aside, usually by their own meteoric stock price inflation and collapse (not to mention a lack of profits or revenues).
However, what has also happened in the years since then has been the spread of broadband, the consumer web and social networking, all of which have made technology simpler and information more globally accessible. Networks are no longer top-down and exclusive, but many to many – or any to any – and a new generation of users has found that the simplicity and flexibility of the consumer web is not replicated in the enterprise. This has created an undercurrent of frustration with plodding enterprise systems, and a lingering suspicion about the cost of installing and maintaining them.
"For companies, it’s all about metrics and finances now, and SaaS is very compelling there." Lindsey Armstrong, co-president EMEA, Salesforce.comSo why has it taken so long for SaaS to take off in enterprise systems and customer management?
“In software, we often overestimate what will happen. But in the middle of the ten-year period you describe, we had the dot-com crash, and that made a big difference to people’s usage," says Lindsey Armstrong, co-president EMEA of Salesforce.com. "Businesses got badly burned by the crash and people perhaps became more risk averse. But I would say the balance [in the market] has been redressed, and it’s probably back where it should be.
“For companies, it’s all about metrics and finances now, and SaaS is very compelling there… For example, we have 35,300 customers already, while SAP has only amassed 41,000 [in a much longer timescale]. And we can really measure how many people are actually using our services.”
In terms of market statistics, speakers at Salesforce.com's September ‘07 Dreamforce gathering in San Francisco made much of the importance of Japan as the next big market after the US. Where does that leave Europe? “Obviously it’s very important for me and for Salesforce!” says Armstrong. “But you must remember that Japan bears a strong resemblance to the US. It’s a single, unified market, whereas in Europe you have to go into each market differently, and that is not easy. Even the UK is not one country.”
Innovation or invention?
Despite the applause of more than 7,000 delegates, customers, partners and prospects at the event, many of the much-vaunted ‘innovations’ unveiled at Dreamforce, including those of partners such as Cisco, seemed to be mere corporate spins on concepts that are already familiar to users of the consumer web.
Can this rehashing of established ideas really be claimed as innovation? Isn’t it more that customers would like business to be as simple as MySpace, Google, YouTube and Facebook, and they are beginning to vote with their feet when it isn’t? “That’s a very good question,” says Armstrong. “Is innovation actually invention, or simply stuff that’s ‘new to you’? I agree that a lot [of developments in this market] are the latter, and not real invention. But platform as a service, that’s invention.
“But what’s driving the market is that the customer is changing. CIOs are changing. If you want a report, then you want it straight away. People have grown up with the consumer web. But the web can be an unhealthy place too: it’s often a case of ‘feed me, feed me: don’t make me think!’, and that’s not always a good thing.
“One of the reasons that on-premise CRM systems failed was that they were not well-liked and well adopted. But when customers put in Salesforce.com they are equipped. That’s one major difference between us and SAP. We seriously punch above our weight, and that’s about community. With us, the community is more powerful than the company, unlike SAP where the company is more powerful. You have to be willing to learn as well as to teach.”
Of course, much of the impetus of the consumer web is towards free services, and Google looms large in the minds of many a business-focused technology company. What if Google crosses over and capitalises on the latent desire for simpler, cheaper business systems that imitate hot-ticket consumer web destinations? Many businesses are already seriously occupying these spaces, even the virtual world of Second Life (whose parent company was a partner at the Dreamforce event).
“It’s an interesting prospect,” says Armstrong. “But someone always pays somewhere. A lot of our main competition is free, but free is not always what people want. Free isn’t everything. You pay for what you get. That said, Google is a partner. We address different bits of the market. We’re a big Google fan and customer.”
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