Analyst Perspectives

Salesforce.com (SFDC) brought five customers to a recent U.K. analyst event to talk about how they used different SFDC services to solve what turned out to be down-to-earth business issues. SFDC of course would have us believe that moving to the cloud is the only way to purchase IT systems (in its parlance, services) and that it has all the services to solve any issue concerning CRM, sales management, customer service, contact center, social media or software development. Only individual users can judge how successful these services are in their organizations, but the five chosen customers all seemed happy. I want to share with you some observations I gleaned from listening to them. 

All five confirmed one key SFDC message: The cloud is here to stay. None of the speakers mentioned a bad experience in moving to the cloud, and all implied they wouldn’t be where they are today if they hadn’t moved to the cloud. One customer went as far as to suggest moving to the cloud enhanced the organization’s green credentials, but several skeptics questioned this view. Three other themes stood out: 

1. Flexibility - Each of the customers spoke about different aspects of flexibility they found in working with SFDC, in number of users, location of users, functionality, ease of configuration and availability of customizable fields. 
2. Innovation – Three of the customers mentioned innovation as a benefit, either in replacing an outdated systems architecture, supplementing existing functionality with new capabilities that would have been unaffordable with on-premises applications, or gaining the ability to build or buy applications developed in the force.com environment. 
3. Relationship with IT – This was a constant theme. A lot of frustration seemed to have built up in the companies over the relationship with IT. They had to wait too long for projects to get off the ground, projects took too long to complete or were too expensive, users weren’t consulted enough, or other complaints emerged. Moving to the cloud had changed all this, and although each speaker acknowledged the necessity of working with IT, the relationship now was more of a partnership and the users felt more in control. 

So what were the projects? Surprisingly they didn’t involve Sales Cloud, Service Cloud, CRM or Chatter. Instead the customers talked about sales force automation, case management and several instances of portals. In the main each used SFDC to solve critical but very tactical issues associated with making sales and case management more efficient and providing people with access to information through portals (which received several mentions about “ease of use”). One common theme that undercut the presentations was that many of the projects were far from strategic and were one-off projects addressing a particular issue in one location, department or business unit with an organization. I was disappointed not to hear companies taking an enterprise view. 

One project stood out for its size and complexity, and the speaker had to admit that if he was starting again, he would “do it differently.” The project was the nearly complete replacement of the company’s IT architecture, consolidating several hundred servers into a handful and replacing many applications. The applications weren’t the problem; the big issue was migration of the data. As I found out in my benchmark research into customer information management, over time most companies’ data gets messy: It becomes out-of-date in places, the quality drops, the amount of incomplete data goes up, and it becomes inconsistent across systems. The lesson here is that before starting a project of this type, sort out your data strategy first.  

I can’t finish without going back to Chatter, which is receiving so much notice as intracompany social media. Two of the speakers did mention it but only in passing. One basically said it had been turned on as an experiment just to assess user demand and had no results as yet. The other used it to enable collaboration between groups and projects, such as for putting together a sales proposal. The company found this successful, especially when executives joined in, which seemed to stimulate more active participation from others in the group. 

In conclusion, I came away thinking that SFDC is a remarkable marketing machine that has changed the IT industry and has prodded many product vendors to move to a cloud-based model. But the reality is not quite as grand as the top-level messages; I advise you to look behind these claims; perhaps like these customers you will find solutions to some core business issues, and perhaps that will be enough. Are you adopting the cloud? If so, I’d love to know what you are doing, so please come and collaborate with us. 

Regards 

Richard Snow – VP & Research Director