Analyst Perspectives

On Wednesday, September 9, 2010 the massive marketing machine called salesforce.com rolled into London to stage its 2010 Cloudforce event at the Royal Festival Hall. The clout of CEO Mark Benioff and his team in the IT industry was evident in the fact that at short notice they could postpone the event by a day and still get about 3,000 attendees, stage a massive partner show and put on a keynote speech and side events that kept the attendees busy and informed about latest developments with salesforce.com and its customers and partners. But through it all one thing stood out – Chatter.

For the few who haven’t heard of it, Chatter is one of the latest offerings from salesforce.com, and some observers call it “Facebook for the enterprise.” Being a very entrepreneurial and innovative CEO, Benioff had spotted that many of his employees, and millions of other people, had changed their communication habits and instead of using the phone (and to a certain extent, e-mail) had turned to social media sites such as Facebook, Twitter and YouTube to interact with their friends and colleagues. Eager not to miss out on this trend, and determined to make this sort of environment safer and thus more attractive to the enterprise, the team created Chatter. It includes many of Facebook’s central capabilities: You can write on someone’s wall, you can have groups and followers, you can get notices when other people send you “stuff,” and you can collaborate on chosen issues. Chatter adds some enterprise-focused capabilities; for example, you can tag a data item – a word processing document or presentation, let’s say – and if anyone changes that item all followers will be notified immediately. To jump-start adoption, the company made it free for all salesforce customers and is Chatter-enabling many of its applications. For example, Chatter enables users of Service Cloud 2 to collaborate easily on trying to resolve a customer case in the CRM application as I have written that customer service is expanding with the new age of social media (See: “Customer Service in the Social Media Age“).

One can’t but agree that social media use is going to keep growing and could become the primary way younger generations interact with each other and companies. But what does Chatter do for business? As I have already said, it is free for existing customers, and I spoke to half a dozen early adopters, asking what benefits they have found and whether they would still use it if it wasn’t free. Their answers have been pretty similar: E-mail volumes have gone down, actions happen more quickly (people said sales get closed quicker, customer cases get closed quicker, and presentations and proposals are prepared faster), there is more cooperation across business units, more users are adopting the core applications because “it kind of makes you,” and management knows more about what is going on. These are clearly benefits, perhaps intangible because no one could actually quantify their value monetarily. This is interesting because everyone I talked to said they would go on using it even if they had to pay for it. One CEO in fact said he turned it off and almost had a riot on his hands!

During one discussion there was a difference of opinion on how to implement Chatter, and it does seem that size matters here. For smaller companies the recommendation was simply to turn it on, and people will start using it to good effect within hours, whereas for larger companies it seems that a more measured approach is recommended, perhaps starting in one area and then expanding as best practice emerges. The CEO of one larger company highlighted the need to be careful about what groups you use, what information goes out on Chatter and what stays in e-mail, and who you allow to chat with whom. This last point was illustrated by a user I spoke with who found that because it is easy to send messages to people without needing to know their e-mail address, the way to get noticed is to send it to the top-ranking person in the group; even if that individual doesn’t respond, it is likely that several followers will – and your objective is achieved.

There is an option for non-salesforce customers to subscribe to Chatter, and I am assured that some have done so, but I haven’t been able to speak to any yet. One way or another it seems chattering is here to stay, and salesforce’s main message to customers is to use it and their business will benefit. For others, putting together a business case might not be easy. It looks like Chatter is ready for business and has made some great progress since my colleague assessed it at the announcement in 2009 (See: “Salesforce Chatter Brings Social Collaboration and Media into Business “) and my assessment on its impact to customer service (See: “Salesforce Cloudforce – Socializing and Servicing Customers in the Clouds“). But Chatter does enable collaboration across a company, and this alone might justify an expenditure to rent and use it in the cloud. Are you a fan or user of Chatter? If so let me know.

Let me know your thoughts or come and collaborate with me on Facebook, LinkedIn and Twitter.

Regards,

Richard Snow – VP & Global Research Director