By Jeff Vance
November 9, 2009
"Compare that to us," Francis said. "When we sign a three-year deal with a large company, we can only recognize 1/36th of the revenue each month. We're very much tied to success of our customers."
The company divides its cloud suite into three distinct offerings: the Sales Cloud, its flagship SFA and CRM products; its Service Cloud, a solution for customer service and support call centers and self-service Web portals; and the Custom Cloud, the Force.com platform for developing and running custom applications.
As a sign of things to come, the company's Q2 earnings showed that the Service and Custom Cloud services have grown to represent more than 25% of its new business signings.
A Salesforce.com Customer Speaks Out
FindAPro is typical of Salesforce.com's early customer base. An SMB that provides a review site where homeowners can rate home improvement professionals, FindAPro built its entire site on Force.com.
CEO Justin Rattigan has been a Salesforce.com customer since 2000, sticking with them as he moved from a small Web design firm to e-commerce company Solid Cactus and on to FindAPro.
Back in 2000, when Rattigan first started using Salesforce.com, most CRM and SFA offerings were designed for large enterprises. SMBs were left out in the cold. "Everything else was either far too expensive or pretty much useless," he said.
A lot has changed in the decade since Rattigan signed on with Salesforce.com. However, Rattigan hasn't been lured away by lower-priced competitors. Moreover, he's grown to embrace the broader Salesforce.com portfolio.
"Salesfore.com is more of a platform now, and using Force.com, I was able to build out my entire site, pretty much by myself, in about a week," he said.
Even if FindAPro one day grows into a large company, Rattigan believes that they'll stick with Salesforce.com. He pointed to the open nature of the platform, noting that major players like Oracle and Microsoft will have to fundamentally change how they do business in order to give end users the openness and flexibility that they now have with Salesforce.com.
The Acquisition Landscape
Clearly, there are strong arguments to be made both for and against a Saleforce.com acquisition. But this is a speculative article, so I'm going to go ahead and handicap the most likely outcomes:
An acquisition by Microsoft: 15-1P: Microsoft is too in love with their own CRM and cloud efforts to buy anyone else's. The company prefers the divide-and-conquer strategy over the acquire-and-integrate one.
By Oracle: 10-1: For a while, pundits loved the idea of an Oracle acquisition. However, Oracle is busy building out its On Demand suite and has its sights set on beating Salesforce.com at its own game. Moreover, wouldn't Oracle be more likely to acquire SAP?
By SAP: 9-1: It makes perfect sense, which means it's not likely to happen. Despite some movement towards SaaS offerings, SAP is still an old-fashioned shrink-warp software company. A major acquisition could radically change their culture, which means they'll pass.
By Google, 5-1: Rumors flew in 2008 that Google would acquire Salesforce.com. It didn't' happen. However, Google has made no secret of its desire to unseat Microsoft in, well, just about everything that Microsoft does. Salesforce.com would give them greater penetration into the cubicle, and, at the very least, the acquisition would give Microsoft a few more gray hairs.
A current partner, such as IBM, Dell or Cisco: 5-2: Last year, IBM rolled out its "Center of Excellence," which is intended to "assist organizations worldwide in evaluating, implementing and driving value from SaaS for customer relationship management (CRM)." There are other CRM vendors who stand to benefit from this, but Salesforce.com was widely seen as the big winner. Would an even closer association make sense for Big Blue?
Other partnerships of note include a cloud computing effort aimed at SMBs with Dell and a "contact center in the cloud" undertaking with Cisco. It wouldn't be a surprise if either of them came calling one day.
Salesforce.com remains autonomous: even: The case is spelled out above. Sure, the company faces steep competitive pressure, but it's well positioned going forward. I wouldn't be the least bit surprised if a few years down the road they were the one doing the acquiring.
