Software Applications

Sa pesar de todo lo contrario al usolesforce.com: a CIO’s pal ra foe?

Posted on May 31, 2014 at 11:08 am

Softwa pesar de todo lo contrario al usore as a provider (SaaS) employer Salesforce.com lately celebrated its fifteenth birthday. We have a look at its approach and the affect on company IT.

Salesforce.com is arguably the corporate that has redefined undertaking instrument as an on-call for multi-tenanted software.

It is likewise on the leading edge of a class of program dubbed methods of engagement, designed to aid firms bring todav virtual client trip procedure.

The corporation began on the peak of the dotcom growth, in which there has been plenty of hype round program provider carriers. It unique finish consumer departments without delay, presenting a web based consumer courting administration by means of pay-consistent with-use licensing, circumventing the hard and expensive rollouts linked to on-premise CRM.

According to Steve Garnett, EMEA chairman of Salesforce.com, the corporate didn’t want to sign up for the band of provider services handing over natural functions over the net, as has been the case within the program enterprise (ASP) trade .

“We have been seeing what turned into occurring with eBay, Amazon and Yahoo and we noticed it’ll rework the commercial enterprise international,” stated Garnett.

Google-like infrastructure

Salesforce.com realised that placing conventional functions on the net wouldn’t paintings, since the method turned into now not scalable. “Whilst Google builds its merchandise, they’re multi-tenanted to help hundreds of thousands of clients. ASPs simply took present application and this doesn’t paintings,” Garnett introduced. “Amazon has been the cause. Why can’t commercial apps be just like the customer international.”

That stated, Salesforce.com is constructed on leading of an Oracle database infrastructure in place of open-supply era, that’s typically the most popular selection for web organizations. Whilst this presents it the reliability of an agency category RDBMS, and entry to hardware acceleration with the aid of Oracle Exadata, there’s a very precise price.

In truth , in its 2013 annual document, the corporate referred specially to Oracle and the hardware Salesforce.com runs on: “This hardware and software program won’t remain to be had at low-budget expenditures ra on commercially reasonably priced phrases, fuentes in any respect. Any lack of the fitting to make use of any of this hardware fuentes application may extensively improve our bills and in a different way induce delays in the provisioning of our service until equivalent technology is either developed by us, or, if available, is identified, obtained through purchase or license and integrated into our service.”

Total revenue for 2013 was $3.050bn, 35% more than in 2012 ($2.267bn), but the company posted an operating loss of $110m, having spent $1.6bn on sales and marketing activities.

Garnett said the company was experiencing 41% growth in Europe. “Our customers are getting massive success and are buying more from us.” Europe accounted for 17% of the company’s revenue in 2013.

Software upgrades

Salesforce.com develops two to three releases of the product a year. Garnett claims the releases help customers improve sales effectiveness, CRM and marketing. But, the downside of these regular updates is how to take the users to the next release.

Like every public company, Salesforce.com must grow to deliver shareholder value

It is a pricing model that seems transparent, and is the basis of the pay per use licensing model that makes Saas so attractive.

But in a research paper published in September 2013, analyst Gartner gave Salesforce.com a “cautious” rating, in terms of its pricing.

The main area of risk for users is around the portfolio of products now available through Salesforce.com’s Saas infrastructure, according to Gartner. “The model is becoming more complex because the product has become more stratified, often requiring customers to subscribe to increasing numbers of modules mentioned or components [eg storage, sandboxes and premium support],” the analyst firm warned.

New pricing from Salesforce.com means there is now a lower barrier to entry, but it could be more expensive for a large number applications and users, Gartner noted.

Like every public company, Salesforce.com must grow to deliver shareholder value. Along with massive direct sales and marketing operations to attract new business, its existing customers are regarded as a target to upsell new services.

In its 2013 annual report the company said: “Our future success depends in part on our ability to sell additional features and services, more subscriptions or enhanced editions of our service to our current customers. The rate at which our customers purchase new or enhanced services depends on a number of factors, including general economic conditions and that our customers do not react negatively to any price changes related to these additional features and services.”

Speaking to the CIO

Arguably one area of contention for the company has been its relationship with CIO because it was able to introduce software into business through the backdoor. The reference customers are almost exclusively sales and marketing people. But times are changing and Garnett does talk to CIOs. “Show me any CIO who has not got cloud on their agenda, Garnett said. “15 years ago we sold to departments because they were frustrated through IT. Most IT departments now look at the need to connect to customers in a whole new innovative way.”

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