salesforce.com has had a successful product even as ASPs and other “software as a service” offerings around have faltered.
While analysts have all kinds of explanations for their success, as a user (at my start up) I liked 3 things about their offering
a) they were “vertically integrated”. I got one price for the software, hosting and services. ASPs like Corio expected you to sign a software license with the publisher (like Oracle or Siebel), and you often had to hire a third party SI for the implementation.
b) I liked the low cost of entry,expansion and potential switching. I could export my customer data pretty easily. I did not get the feeling of “lock in” that is so common with other software.
c) It “democratized” data access across the company. Sales people can be data squirrels and they resent having to report – to anyone, anytime. They did not find the tool too onerous (of course they all bitched they still liked Act! better on their laptops) to populate, and executives could access that information on their own anywhere on the web.
Where does the company go next? I know the temptation will be to chase after the bigger ERP and CRM boys. I would like to see them focused on departmental solutions. In the mid '90s, Hyperion had an opportunity to expand beyond budgeting and consolidation applications to other departmental solutions – treasury, taxation etc. They turn a wrong turn towards ERP transaction processing capabilities, and then with Arbor became a more general purpose analytical engine. The market for divisional applications – travel, expense, currency management – is still pretty fragmented and plays well to salesforce.com’s strengths. It also plays well to Intuit’s strengths. Marc Benioff may not agree – but I think he should focus more on Scott Cook than Tom Siebel.
