Salesforce.coms Growing Pains Irk Customers

Customers say recent outages at have caused them some pain. Does this reflect on the software-as-a-service industry, and is anything less than 99.999 percent reliability good enough?

Charlie Crystle, CEO of Mission Research, a developer of fund-raising software for nonprofit organizations, based in Lancaster, Pa., dropped on-demand software vendor Inc. over recent outages. Cliff Bell, CIO of Phoenix Technologies Ltd., a developer of embedded software in Milpitas, Calif., is forgiving about outages. And Melissa Caylor, director of IT at mortgage broker First New England Mortgage Corp., of Newton, Mass., will change her internal practices to cope with any pain caused by downtime.

Add it up and CEO Marc Benioff may have some explaining to do at the companys Jan. 17 AppExchange Day and Winter 06 release conference in San Francisco.

On Dec. 20,, which provides CRM (customer relationship management) software, suffered an outage for nearly 5 hours.

On Jan. 6, the company confirmed "a minor interruption" in the Europe, Middle East and Africa regions.

In a dozen interviews with customers and partners, eWEEK has found sporadic outages over the last year.

Bruce Francis, the companys vice president of corporate strategy, said the Dec. 20 outage was caused by an "extremely rare, undocumented bug" in its databases provided by Oracle Corp. Francis said the Jan. 6 outage was resolved quickly but didnt elaborate further.

In addition, Benioff said some customers saw "performance degradation" in the last 90 days because the company was prepping a new data center, which was turned on in November and can support 1 million subscribers, up from 350,000. "We, of course, had to work out a few kinks," Benioff said, adding that the Dec. 20 outage wasnt related to the data center startup.

/zimages/3/28571.gifClick here to read more about a recent CRM outage.

Salesforce.coms recent problems are far from becoming an epidemic, but they do raise key questions about on-demand software. Should customers expect 99.999 percent reliability from a hosted application service? Is the proverbial canary in the coal mine as other hosted services grow? How should customers deal with these outages when they occur?

Salesforce.Com: Is software as a service reliable?

Any problems at may be a product of its own success, customers say. As of Oct. 31, had 18,700 customers, up 115 percent from the 8,700 it had on Jan. 31, 2004, and up 434 percent from the 3,500 it had on Jan. 31, 2002. That growth has made a Wall Street darling, with shares gaining 248 percent through Jan. 11, up from an $11 IPO (initial public offering) price on June 23, 2004.

Too much, too fast?

While Salesforce.coms growth has been stellar, it worries customers such as Don Devost, director of finance and administration in the worldwide sales division at Analog Devices Inc., a Norwood, Mass., electronics manufacturer.

"I am concerned about Salesforce managing their growth and being able to deliver high uptime and good service," Devost said.

Analog Devices, which uses to support 800 salespeople, has seen an increase in alerts from reporting that its "experiencing problems with the server."

"Generally, what we see is periodic slowdowns, and weve not had very many user complaints," Devost said. These problems are appearing "at the same time their customer base is growing rapidly, so I would have to say there is a correlation," he said. "I wouldnt want to keep on this trajectory for another 12 to 18 months. That would be problematic."

/zimages/3/28571.gifA "rare" database bug causes a outage. Read more here.

Phoenix Technologies Bell said Salesforce.coms outages are getting attention largely because its system is "out in the open" on the Internet and outages are high-profile, compared with downtime at internal technology departments. He compared Salesforce.coms problems to the high-profile outages eBay Inc. had to contend with in the late 1990s. "[eBay] had to clean that up, and they did," Bell said.

Customer choices

The big question for customers of, or any other hosted application service, is, What are your choices in an outage?

Benioff maintains that outages are not commonplace. He said Salesforce.coms system availability is still more than 99 percent and "has never been below 99 percent in our entire history."

However, some customers interviewed by eWEEK said Benioffs benchmark may not be enough. These customers take three approaches: Find a new provider, live with outages or come up with a workaround to get access to applications offline.

Mission Researchs Crystle, who signed up with in March, is moving on. He said the performance of Salesforce.coms CRM applications started declining in July and August and became a big issue in September.

Meanwhile, slowdowns seemed to occur during the last 10 days of the month—a time when Mission Research closes the bulk of its sales. "We are very much based on that monthly close. And that last week is always just terrible, with a lot of click and wait, click and wait," Crystle said.

On Dec. 20, privately held Mission Research booked near "zero sales." "That was a huge hit to us," Crystle said, adding that the outage cost his company 5 percent of monthly sales. He declined to estimate his cash loss.

By that last outage, Mission Research had already made plans to bail out on Crystle decided in early November that the company needed to build its own internal application based on its fund-raising software for nonprofits. Crystle acknowledged that his internal system "isnt without its glitches," but he said they are his and he can fix them. Crystle will retain one account to compile historical reports for 2005.

Next Page: Other solutions to the downtime problem.