How Salesforce.com Plans to Extend Its Enterprise Reach

• 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. 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, 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.”

Pombriant says Salesforce.com will no doubt want to sell customers on its notion of social enterprises, which it conceives of as both connecting with customers through social media and collaborating internally through Chatter. “Unlike many other vendors of collaboration, they’re not trying to go out and sell tech for tech’s sake. They’re doing a decent job of telling you how you win with it,” Pombriant says.

Most companies have not bought into the notion of a social enterprise so far, Pombriant says. “They need to do some hard examining of their business processes and how they interact with their customers, and ask themselves if the methods they are using are going to take them through the next 10 to 12 years. I think the answer is no.” Meanwhile, Salesforce.com is positioning itself as a place companies can turn to help them evolve.