By Renee Boucher Ferguson  |  Posted 2006-08-23 Print this article Print

The billion-dollar mark is a huge milestone for any software company, let alone an on-demand pure play vendor like Salesforce. Its one that few companies have achieved (SAP, Oracle and Microsoft are there). "The billion-dollar mark is also a tripping point for a lot of companies," said Nemeroff, in New York City. "They get really close—really close—and then they trip over it. Its a psychological point. Its a very difficult task to get there and maintain it. A lot of companies fall short."
Asked how he plans to double his business, Benioff said its more of the same, rather than new technology.
"Its more of what were doing," said Benioff. "More AppExchange, more Salesforce, more CRM, more PRM. All the things were doing now, we think are the things to get there. We dont think there are any missing pieces. Its all about execution. Thats what we have to do every day." Salesforce will lean heavily on its heritage as a multitenant SAAS (software as a service) provider—both in providing software to customers and in enabling users to develop their own multitenant applications through AppExchange. Multitenancy is the practice of running every customers software on the same server, with upgrades occurring frequently (about once a quarter) and implemented simultaneously. But Salesforce isnt the only company beating the multitenant drum. Microsoft announced Project Titan in July, its plan to add multitenant capabilities to its CRM software. Earlier this year SAP announced a "hybrid" brand of CRM software, one that promises multitenant capabilities but loads each customers installation on a separate server. Oracle, too, is heavily invested in on-demand (though no word yet on multitenancy plans) with its $5 billion acquisition of Siebel earlier this year. Then there are pure-play on-demand companies like NetSuite and Sugar CRM (which is open source) that offer comparable functionality in a multitenant model. NetSuite develops on-demand CRM and ERP (enterprise resource planning) software. On Aug. 22 the company announced its NetSuite Keyword Marketing module for sussing out the efficacy of Google advertising. "We obviously didnt write this code overnight and we have released announcements about our earlier versions of this technology last year," said Zach Nelson, NetSuites CEO. "Salesforce.coms acquisition is an attempt to catch up with NetSuite in this space. Ultimately the fact that NetSuite has order management [functionality] integrated in its system will always give us a better solution as we can track word-to-close." Nelson pointed out that NetSuite Keyword Marketing Module also supports Yahoo—between 20 and 30 percent of all keyword purchases—while Salesforce.com is limited to Google. Kieden founder Swensrud confirmed Aug. 22 that the company had planned to offer AdWords for both Google and Microsoft adCenter, and will continue down that path if customer demand is there. "When we started we had plans to do Google and Yahoo," said Swensrud. "But the response from customers was so much toward Google, to focus on doing that right." Benioff said hes not too worried about the mounting competition from bigger software companies making a play in the on-demand world—particularly Microsoft. "Microsoft ought to change the [multitenant project] name from Titan to Titanic," said Benioff, with obvious glee. "The issue is that theyve made a number of statements that indicate they have no idea what multitenancy is—that customers, partners and Microsoft will all run the same code. Its not about customers running multitenant code, which is why Microsoft has no clue." Benioff also points to the venture capital industry as a sure sign the Salesforce strategy is working. "You talk to [venture capitalists] and theyre going to tell you theyre not funding software companies, only service companies. And only those companies that have multitenant capabilities," he said. "I dont care what SAP and Oracle have to say; the venture capitalists have spoken." Check out eWEEK.coms for the latest news, reviews and analysis about customer relationship management solutions.


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