Needs to Focus on Fundamentals

Opinion: 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. has hit a couple of speed bumps in its drive to prove that an on-demand software company can be just as successful and—more importantly—just as effective as companies selling software thats 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.coms online CRM (customer relationship management) application service werent limited to these two incidents. Instead, they said they have had to repeatedly contend with "outages" and performance slowdowns in recent months.

The problems call into question whether, or any on-demand application service provider, can deliver consistently good service and meet its service-level agreements.

/zimages/1/28571.gifRead more here about performance slowdowns and outages that and its customers have had to deal with.

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 services reliability. 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 ISPs service isnt an acceptable excuse.

Its not just a question of Salesforce.coms 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 isnt Salesforce.coms 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 wouldnt want to see performance problems continue for months more without end.

Benioff contends that 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.

John Pallatto

John Pallatto

John Pallatto has been editor in chief of QuinStreet Inc.'s since October 2012. He has more than 40 years of experience as a professional journalist working at a daily newspaper and...