Salesforce.com Needs to Focus on FundamentalsBy John Pallatto | Posted 2006-01-18 Email Print
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Opinion: Salesforce.com is counting on its new data centers and its AppExchange software-as-a-service platform to drive future growth. But its strategy could fail if the new facilities don't also deliver reliable services for its basic CRM service.Salesforce.com has hit a couple of speed bumps in its drive to prove that an on-demand software company can be just as successful andmore importantlyjust as effective as companies selling software that's installed on premises.
The company has confirmed two services outages, one lasting nearly 6 hours on Dec. 20 that affected most of its customers and what it called a "minor" overnight outage in its Europe, Middle East and African market.
But as a number of customers have told eWEEK, problems with Salesforce.com's online CRM (customer relationship management) application service weren't limited to these two incidents. Instead, they said they have had to repeatedly contend with "outages" and performance slowdowns in recent months.
But the company officially has been very tight-lipped when it comes to talking about the cause, scope and solution to the problems. That attitude conflicts with the reality and the goal of the on-demand application market, which is that customers need to have the utmost confidence in the service's reliability.
Salesforce.com CEO Marc Benioff says company system uptime has never fallen below 99 percent, but some of its customers may take issue with that claim when subscription renewal time comes.
You know whose head should roll when the application totally crashes. But whom do you blame when your Web application slows down? Is the fault of the hosted service provider, or is it due to local Internet conditions?
However, when a company stakes its credibility on the quality of service on the Internet anywhere on the globe, blaming it on local Web conditions or the quality of the ISP's service isn't an acceptable excuse.
It's not just a question of Salesforce.com's long-term success and prosperity. The viability of the whole software-as-a-service concept is challenged when customers complain about application performance and availability.
Granted, so far it appears that it isn't Salesforce.com's biggest companies that are complaining the loudest. But major customers like Phoenix Technologies and Analog Devices have noticed performance problems and have expressed their concern. While they say they remain generally satisfied with the service, they also indicate that their patience is limited and they wouldn't want to see performance problems continue for months more without end.
Benioff contends that Salesforce.com has plenty of large-scale customers that it works overtime to keep happy, including Cisco Systems with 4,500 subscribers, Automated Data Processing with 6,700 customers, and Sprint Communications with 3,100 customers.
Next Page: Growth from AppExchange.
That's why Tuesday's announcement about the introduction of the Winter '06 release of Salesforce.com's online CRM service and the general release of its AppExchange on-demand applications platform is important to the company's future growth.
To prepare for this release, Salesforce.com spent $50 million to build two new data centers with new servers and networking equipment. It plans to mirror these two data centers in February so that customer data is automatically backed up for added data security and availability.
It was the launch and debugging of the new data centers that caused at least some of the performance problems that customers experienced. Benioff says it will be these data centers that provide the capacity, scalability and reliability that will enable the company to grow to 1 million subscribers.
But it's AppExchange that gives Salesforce.com the best change of reaching that goal. The company says that AppExchange gives it the opportunity to become the eBay of software as a service because it will be the interface through which any company can launch on-demand Web applications.
Salesforce.com is pitching AppExchange as a Web operating system that can serve as the development platform for countless business applications in the same way that Windows serves as the operating system for desktop PC applications. The company launched AppExchange Tuesday with in excess of 160 applications and more than 50 Salesforce.com add-on components.
The development of software as a service is spearheading the development of what Salesforce.com calls the "business Web" as the successor of the "consumer Web" that evolved in the 1990s.
Salesforce.com contends that AppExchange and its entire on-demand infrastructure will be robust enough to handle not only its expanding population of 351,000 subscribers but also a nascent community of development partners and nearly 19,000 customers who all can be contributing to applications to AppExchange.
Ideally this will generate a critical mass of "social" application production in which any of Salesforce.com's customers or subscribers could be contributing new applications.
But the big test will be whether Salesforce.com's newly tested and presumably debugged data center can deliver the robust service required to support all of this activity. Salesforce.com's ambitious plans will all come to naught if the basic features of its.com platform don't leap onto the screen with every mouse click.
John Pallatto is a veteran journalist in the field of enterprise software and Internet technology. He can be reached at email@example.com.
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