Salesforce.Com Yields to Pressure Over Analytics Pricing

IDG News Service — Salesforce.com will include some new analytics capabilities at no additional cost with the Enterprise and Unlimited editions of its CRM (customer relationship management) software, following complaints from customers who argued that the features should have been used to fill long-standing gaps in the products' core functionality, not sold separately.

IDG News Service first reported the user discontent last week.

Salesforce.com Chief Operating Officer George Hu announced the change in a blog post due to be posted late Tuesday.

"We got it wrong, and we sincerely apologize to our customers," he wrote. While Salesforce.com initially considered the analytics capabilities to be an entirely new product, "feedback from customers clearly show they view these features as enhancements to our current functionality."

The features, first announced as an Analytics edition, now will not be sold separately, Hu said in an interview. Salesforce.com planned to charge US$40 per user per month for the capabilities. It charges $125 per user per month for the Enterprise edition of its CRM suite, and $250 for the Unlimited edition.

A user affected by the turnabout expressed pleasure at the move.

"It's an amazing example of a company listening to their customers and responding quickly," said Salesforce.com customer Jeremy Farber, who mounted a social media campaign against the pricing last week.

Salesforce.com has made social media in businesses a central theme of its marketing and product strategies. In Farber's view, the pricing reversal is an explicit demonstration of "the power of social media."

"They certainly could have just sat on [the complaints] and ignored it," Farber said. "Ten years ago I'd just be in my office [complaining] to myself."

The outcry gave Salesforce.com a chance to show it can listen to its customers, and perhaps get some good publicity as well.

"We've been preaching for a while now about the power of the social enterprise," Hu said. "We want to practice what we preach."

That doesn't mean Salesforce.com will relent in every case, but complaints like these haven't been the norm, Hu said. "We've announced many products over the years with a separate price and had little to no push-back. This is the first time we've seen this, and that's a message from our customers."

One industry analyst took a measured view of the announcement.

"Analytics is the last frontier for Salesforce.com. They've got social, they've got mobile. The weakest piece of the link is analytics," said analyst Ray Wang, CEO of Constellation Research. "The good news is it's being included in the pricing. The bad news is that there are probably third-party tools that can do a better job."

That said, "the bottom line is, other than exporting out to Excel, people want to use analytics in the environment they're in."

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris's e-mail address is Chris_Kanaracus@idg.com