How Salesforce.com Plans to Extend Its Enterprise Reach

Salesforce.com is taking steps to build a bigger platform to support collaboration, application development and social networking in order to create a larger enterprise presence.

By Chris Kanaracus
Wed, July 27, 2011

Company: Salesforce.com
Headquarters: San Francisco, Calif.
Employees: 6,000
2010 Revenue: $1.7 billion
CEO: Marc Benioff
What They Do: Salesforce.com is best known for its on-demand CRM software. But the company is expanding rapidly into areas such as enterprise collaboration, application development tools and social software.

The Pitch

Salesforce.com might be synonymous with on-demand CRM software, but the company wants to play a bigger role in enterprise IT.

Originally, the company’s Force.com development platform provided the means for partners and customers to write extensions or add-on applications for its CRM software. But Salesforce.com’s technological reach has broadened through moves such as the acquisition of Ruby on Rails platform vendor Heroku and a Java development partnership with VMware (VMW). Now Salesforce.com can offer developers the ability to develop apps with widely used and accepted tools and languages. It also supports collaboration and social networking with tools like Chatter.

“Enterprise CIOs today are wrestling with speed,” says CEO Marc Benioff. “How to deliver more innovation faster for their customers internally. We offer them a much faster, much easier, low-cost way to do that.”

The Catch

Salesforce.com’s long-term success depends on how Force.com evolves, especially as the company increasingly courts enterprises that are used to the flexibility of custom application development, says analyst Ray Wang, CEO of Constellation Research.

Salesforce.com faces competition in every area for which it offers tools and applications. Its challenge, according to industry experts, is to present itself as a place where CIOs can get all of these capabilities in an integrated manner.

Currently, Salesforce.com lacks strength in some areas—such as software-based tools for running marketing campaigns—that complement its original role as a CRM vendor, says Denis Pombriant, managing principal of Beagle Research. “They need to at least embrace digital marketing and advanced marketing concepts as part of their messaging,” according to Pombriant. “Right now, they’ve got a lot of vendor partners in the marketing space, and they’re being careful not to disrupt it.”

The Score

Salesforce.com is already a presence in the world’s largest enterprises, including DuPont (DD), which has deployed its CRM software globally and recently rolled out Chatter. DuPont CIO Phuong Tram says Salesforce.com has deployed quickly—its big selling point. “It’s the most adoptable system. We needed very little training.”

DuPont is planning to deploy more cloud services in the next couple of years, Tram says, freeing IT staff to “focus a lot more on process and capabilities, not just configuration work. Salesforce.com is one of our top four or five partners in that.”

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