Salesforce Enters the REAL Cloud -- I Think

Summary:As many of you probably know, salesforce.com acquired Jigsaw a few days ago for an incredible (incredible for Jigsaw that is) $142,000,000. Salesforce.com is making an effort to become not just a PaaS provider, born a CRM provider, but now a complete cloud offering.

As many of you probably know, salesforce.com acquired Jigsaw a few days ago for an incredible (incredible for Jigsaw that is) $142,000,000. If you don't know what Jigsaw is, be patient, grasshopper, all will come clear in a minute or two.  But  it's an acquisition that seems to have an actual context - not just a way for salesforce.com to spend some of that half billion that they put together earlier this year (or was it late last year?).

Think "partnership with VMWare."  The combination of the two tells me that salesforce.com is making an effort to become not just a PaaS provider, born a CRM provider, but now a complete cloud offering.  They are seemingly the classic components of the cloud to customers.

  1. Platform as a Service - salesforce.com has been in this business for a few years - and has planned this since 2003. Force.com has been the first result of that strategy - with the CRM application that gave them their name the opening gambit.
  2. Infrastructure as a Service - I have to think that the partnership with VMWare is what's going to provide this. Cloud infrastructure is virtual though as Larry Ellison said in his actually very funny monologue at at the Churchill Club last fall, there's a real server somewhere. I guess we'll find out something more on this April 27 or 28 when salesforce.com announces "VMforce." - the name of whatever the partnership of VMWare and salesforce.com is going to deliver.
  3. Storage as a Service - This is still a missing component - though I suppose to some degree its the multi tenant architecture of salesforce.com that provides this - e.g data is stored on the salesforce.com side of the house.  However, what about apps that may be cloud based or data that doesn't reside in a salesforce.com data store?  A document for example? A gazillion lines of code waiting to be compiled?
  4. Cloud Services - The acquisition of Jigsaw is a perfect example of salesforce.com being able to provide an important cloud service - data services.
  5. Cloud Applications - no dearth of cloud applications that's for sure - Service Cloud 2, Sales Cloud 2 and everything that partners are providing on the AppExchange are examples of this.

This seems to be an attempt by salesforce.com to do what they've been promising since 2003 - to be the "Business Web," the cute term which seems so archaic and arcane now, for the place where a business would run all of its business needs. Their vision then was to be the underlying foundation that all business applications would run on - courtesy of salesforce.com  They are continuing to do that - right along the path they defined then - in an extraordinarily focused way, given the ups and downs, crazy veering of most of their competitors as they've attempted to understand and respond to the new social business world.

This is far more serious than their continued announcements of Sales Cloud 2, Service Cloud 2, Custom Cloud 2 and Chatter as the 1st, 2nd, 3rd, and 4th "clouds" as recently as Dreamforce 2009 when in fact, in the context of a cloud they are 2 applications, a platform and a layer in the platform. None of them were "clouds."

What about Jigsaw?

First, I want to congratulate Jim Fowler, CEO of Jigsaw. He's such a good guy, I can't help but be happy for him personally. Sometimes I forget these aren't just business moves that affect "a market" but moves that affect the lives of the people involved. This isn't (and I think shouldn't be) a dispassionate analysis of things that will drive stock prices and impact abstract institutions or forces.  There are human beings involved in this and when they are good human beings I think we (at least I, since that's all I can speak for) should acknowledge how its going to affect them - good or bad. In this case, I have to assume good and thus, once again, congratulations to Jim Fowler.

What is Jigsaw?

Jigsaw's model, given salesforce.com's recent creation of Chatter is almost perfect for salesforce.com's plans.  The idea behind Jigsaw was crowd sourced rich contact data that would be of real value to a company because it was constantly refreshed.  That means that the contact data on me for example would be entered by someone who is a participant in either the Jigsaw Open Data Initiative (which I have to presume will be ending and might be one of the problems that salesforce.com will face - though I can't imagine that they didn't anticipate it.) or as an individual who had knowledge of particular contacts. The value proposition for individuals especially in sales was that in return for providing their contacts data to the Jigsaw database, they would get access to that database.  Jigsaw made money via corporate subscriptions to the data.  Because it's a "data on demand" service, it's a subscription fee (though how much for any edition especially Enterprise is not evident on their site)  - just like every other subscription.

There are two things that I wonder about with this acquisition though.  First, I remember the fervent entreaties that this data was really "clean" meaning free of duplications and imperfections.   The folks at Jigsaw claimed a strong data cleansing effort that went on nightly (I think).  I always had a bit of a problem thinking that it could be as clean as all that, though I never doubted that they did what they claimed. But one of the weaknesses of crowd sourcing is that it can be nastily inaccurate. There is a strong element of self-policing that claimed by the strongest crowd-sourcing advocates, but that's if there is a truly vested interest in that self-policing.  For example, even Wikipedia, where this self-policing was a very powerful force because of the vested interests that Wikipedia participants had, still had to create institutional (and quite traditional) editorial controls to guarantee accuracy and impartiality as best as possible.

I don't see how that's going to be anything less a question (not an issue) with salesforce.com's acquisition - unless salesforce.com intends to create institutional controls over how the data is cleaned.

Second, one of Jigsaw's great achievements was to successfully create the Open Data Initiative - a consortium of companies that agreed to share data - salesforce.com among them.  Other participants were Oracle, NetSuite, Sage, SugarCRM, Maximizer and Landslide among others. What happens now that it goes from cooperative to competitive? How much does this affect the amount and value of the data that's been provided to date?  I don't have the answers yet but I will.

All in All

I have to say that this seems to be a smart move by our always interesting buds at salesforce.com - and at least is starting to explain why they went and got a $500M cash infusion late last year.   The siren beckoned from the cloud and they answered the call it seems.  With that, I don't see how they are going to compete yet with Amazon or Microsoft Azure yet because:
  • I don't know how they are going to price a cloud offering
  • I don't know what they are thinking when it comes to the storage components
  • I don't know if I'm even right that this is what they're thinking.

Topics: Data Centers, Enterprise Software

About

In addition to being the author of the best-selling CRM at the Speed of Light: Social CRM Strategies, Tools, and Techniques for Engaging Your Customers Paul Greenberg is President of The 56 Group, LLC, a customer strategy consulting firm, focused on cutting edge CRM strategic services and a founding partner of the CRM training company, BP... Full Bio

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