Dreamforce 2011: Salesforce & the Social Enterprise Will Be Here All Week (Part 3)

Dreamforce 2011: Salesforce & the Social Enterprise Will Be Here All Week (Part 3)

Summary: The "Other" Technology StuffChatter was the centerpiece of the social enterprise that salesforce.com announced but still only part of the technological foundation.

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The "Other" Technology Stuff

Chatter was the centerpiece of the social enterprise that salesforce.com announced but still only part of the technological foundation.  Several other pieces need to be brought out here before we rev up the engines and fly briefly into the CRM pillars of salesforce and some of my concerns in the midst of this most important and extraordinary step forward by salesforce.

For the other two posts on Dreamforce 2011:

Part 1

Part 2

Radian6

I think I've made it abundantly clear where I stand on Radian6 (who is a client in the interests of whatever these disclosures are in the interests of). I think the world of this company. Like any business institution, they have their ups and downs, their strengths and weaknesses but all in all they defined a market, have developed an excellent set of products and services, have an honest, intelligent and likeable management team, and some marvelous employees. I count many of them as my actual friends and even more my Facebook friends.

I think salesforce is beginning to realize the the value of their acquisition of Radian6, though in a limited way and too slowly,.  They see it as the leading company for "social business intelligence" and "social listening" and that's a good thing. They've acknowledged the impact that Radian6 is having on their culture, which, given the conservatism of salesforce internally, is also a good thing. They've opened up some vistas for salesforce and to SFDC's credit, they are viewing them with eyes wide open.  Radian6 is the social business intelligence layer of the technology stack that salesforce is building for the social enterprise.  All of this is very, very good.

But there are two things I need to make note of here that I would be remiss if I didn't say.

  1. I think that at least from its public stance, as much as they are effusively happy about Radian6's technology prowess, they are underestimating it. The Radian6 Insights extensions platform is incredibly powerful and, if my supposition about the AppExchange and the salesforce partner ecosystem, (see below) is correct (I don't know if it is), becomes even more powerful. The Radian6 Insights platform allows you to plug in business services using other tools, like Clarabridge's semantic analysis, down to the field level. This means that the Radian6 engine can be extended to handle a great deal of valuable business services that they don't have to build. They just need to add them in.  And they can be mixed and matched as the customer wants them. Unless there is an architectural or technical reason that salesforce can't use this, they'd be crazy not to take advantage of this superb bit of technology.
  2. I'm repeating something I've said before here and will be talking about later on in one of the parts. Let me be emphatically clear.  RADIAN6 IS NOT THE MARKETING CLOUD!!!! (loud enough for ya?) nor do they even represent a decent foundation for "The Marketing Cloud."  They might be part of it but that's it. Period. More later under the title "The Marketing Cloud....Hmmm, Let's Get This Straight"

To make it abundantly clear, they might be the most important acquisition that salesforce.com ever made.

Sorry DimDim and Heroku.

Heroku

As those of you know, Heroku was acquired last year for an astonishing (at the time) $212 million. I remember thinking "I wish I was Heroku." Sigh.  Though it's conceivable since I don't know what that means in Japanese, I might not really wish that.

The reason for that expensive acquisition became clear at this year's Dreamforce with the announcement of Heroku for Java and the relegation of Apex, the force.com proprietary development language, to one of a series of choices. Marc, with seriously wise thinking, made salesforce something that anyone can develop in whether in Ruby on Rails, Java, Apex and, down the near time road, other well-known development environments. This will dramatically extend salesforce's development community but more importantly, allow their customers and partners to develop applications in the environments they are comfortable using.   This is a key initiative to achieve their vision. It's damned smart. It also reflects salesforce's willingness to change when change is necessary and that's a good thing.

The Partner Ecosystem and the AppExchange

Salesforce has been rapidly changing its partner model - from the technology to the partnerships to the philosophical outlook. They are moving from a federation with kind of a hub and spoke configuration to a true ecosystem, which has a lot of implications for the AppExchange - yet is probably the smartest move that they can make.

Because they know that the enterprise is not just a customer-facing entity but also incorporates employees, partners and suppliers and because Chatter started out as an internal tool to begin with, salesforce is re-jiggering their entire idea of how to "interact" with other companies, thinking far more like Microsoft than they probably would ever publicly or even privately admit.

I mean, they are thinking about ecosystems.

Several years ago, I introduced someone who represented a substantial technology company with a very complementary set of solutions that was keen on working with salesforce. Without going into details, lets just say that if there was anything I've ever done that said "strategic partnership" this was it.  The senior management person that I introduced this person to had an initial response that was along these lines. "Oh, you should get this on the AppExchange."  Totally missing the point, totally blowing the meeting. The company that was reduced to an app instead partnered with another technology company that has had a long and fruitful relationship with it -strategically.

This narrowband thinking significantly transformed over the past several years and in fact I would say, died with Dreamforce 2011. Salesforce is now understanding something that Microsoft understood a long time ago - partner ecosystems - a total network of companies that essentially builds the things using your platforms that you don't build yourself and supports those and your things with services - is the matrix needed for, as they say, total domination. It is a welcome approach because:

  1. It serves customers with a one stop, fully interoperable shop.
  2. It honors the partners because it treats them as participants in the overall march forward and as important in the progress to the march's success.
  3. It supports technological innovation because the partners have skin in the game and a stake in the result. Co-creation is part of its DNA and transparency part of its culture

When an ecosystem is run properly, it provides huge upside. It's no coincidence that salesforce announced partnerships with Concur (for expense management), Workday (for human resources management), Kenandy (for social supply chain management) and Infor (for ERP and marketing).  These fill out areas of an ecosystem that when enabled are a step toward fully integrated systems covering the total needs of the largest enterprises - and they will be built on force.com and glued by Chatter.  Additionally, Seesmic, one of the world's most popular Twitter clients (I use it in various places along with Hootsuite) came out with a genuinely interesting and feature ready CRM application using its Twitter platform - focused, of course around sales force automation.  It has a lot of promise on its own and as part of the newly minted salesforce AppEcosystem (my term, not theirs).

What are the implications for the AppExchange?  Well, first, it means that the future (and probably some of the current) AppExchange providers need to think through the holes in the ecosystem and provide applications that can fill those holes, if they want to be successful. It means that salesforce probably needs to think about the idea of "calls for apps" meaning putting out small RFPs of some kind that will ask companies to develop to the lacks in the ecosystem. It could mean that the thinking around the ecosystem elevates the importance of the strategic apps in the AppExchange like billing and payments subscription provider Zuora or financials provider FinancialForce - and salesforce might want to rethink how to deal with those. It also means that it might be important to think through how verticals will play in the AppExchange (Studentforce for higher education for example) given that Marc B. announced a commitment to having "hundreds" of  vertical process maps and templates by 2012 - apparently under development now. To me, a significant rethinking of AppExchange wrapped around this integrated whole is something that I would be putting my mind to.  It may not lead to many changes, but it deserves the thinking.

CRM Pillars: Sales(Cloud), Service(Cloud), Marketing(Cloud)

Interestingly enough and understandably, the classic apps of salesforce, SalesCloud and ServiceCloud didn't get a huge amount of play at Dreamforce. There was nothing of great significance to report for SalesCloud, really, which is no biggie. It's not necessary to always be that much more advanced. It's only necessary to work well for your customers.

However, ServiceCloud made significant progress with the integration of Chatter. This is one case where Chatter truly added serious power to an existing application. The Chatter integration provided the capability to pick up a problem that was found on Facebook, open a ticket, produce a YouTube video to answer the problem and publish the resolution to the appropriate channels via the service center.   (I made this example up, but it is possible given what was discussed). This adds huge power to ServiceCloud and makes it a contender.  See Esteban Kolsky for more on this.

The Marketing Cloud(s)...Hmmm, Let's Get This Straight

For years, this has been the missing piece in most of the CRM suites out there and all of the social CRM applications - or those that claimed the status in any case.  As a result, a substantial amount of healthy marketing automation technology players like Marketo and Eloqua began to dominate the field. Newcomers in social marketing like Crowd Factory have now begun to enter the scene though in the case of social marketing it's a young scene yet.  But no one really did the deed when it came to incorporating marketing into his or her suites in a way that was competent with the kind of exception of Oracle which had Siebel marketing already.  Then Market2Lead was acquired and incorporated into Oracle CRM on demand, giving them the first SaaS-based complete CRM suite, though the marketing product was a bit 1.0ish in look and feel.

But along comes the acquisition of Radian6 and during last May's Cloudforce in Washington D.C. start to hear that Radian6 is the "marketing cloud" which I will reiterate for all of you who read the prior parts of this post - it isn't.

So imagine my very pleasant surprise when I heard that Infor was going to announce a strategic partnership with salesforce to build what they are calling InForce on force.com. There are three products being offered.  InForce Everywhere - a force.com application that pulls ERP data from Infor's ERP applications into salesforce; InForce Order Management - it does what you would think - order, proposal, and quote management; and most important for the purposes of this, InForce Marketing.

InForce Marketing does something that, if I were a marketer, I would be drooling over. It integrates the excellent Infor Epiphany customer interaction engine with salesforce.com.  AND it provides a marketing automation solution to salesforce.com, something that salesforce lacks and something that Infor can provide effectively.  That's inbound and outbound campaign management. That's lead generation and lead nurturing capabilities. All the traditional marketing automation functionality that, when it comes to customer facing capabilities, salesforce needs.

Yet, when Charles Philips was on the stage, nothing about this was said at all.  Instead, I'm still hearing from the salesforce that as Marc said to Rose Cafasso "we are building a full marketing cloud. The hottest category in marketing is social monitoring and we are building out a complete marketing cloud."

The confusion over their marketing application strategy remains.  So, to deal with it, at least in my own head, I have some recommendations for salesforce that I'm willingly offering.

You have a strategic partnership with Infor.  With Radian6, you have arguably the best social media monitoring tool with far greater than just marketing value. Infor gives you the opportunity to build out a significant traditional marketing automation capability with an excellent customer interaction engine that gives you a way to integrate recommendations into your Marketing Cloud.  Take that relationship, integrate Radian6 as a layer inside of the solution and you are 2/3 of the way to an actual Marketing Cloud.   Please announce that you are going to do this or something like this. Its time and the uncertainty is hurting my head.

Mobility, Portability - Touch.salesforce.com

One thing that salesforce has always been cognizant of is the value of mobile. Marc in his 2010 Dreamforce speech, did his classic "iPad pulled out of pants" with a discussion on how mobile and portability was transforming the way that the world worked.  Salesforce extended that from a vision to a practical "sales app" as they call it with touch.salesforce.com. It's not a website, it's a full featured mobile sales app that has touch functionality built in to work with the devices that have that capability - meaning most of Apple's IOS and Android smart devices. Where it becomes more advanced is that its seen as a key component of the social enterprise technology stack - and if the usage of the salesforce Chatter mobile app pre- and during the Dreamforce is any indicator on how salesforce and mobile are going to married, its promising to have a long and fruitful relationship.

There is no question that with 5.3 billion mobile devices of which 1 billion are smart devices, this is the future of applications.  Here salesforce stayed at the head of the pack, though just barely, by providing something that is their bread and butter, a sales application that is fully functional and supports the new touch driven user paradigms made most popular by the iPhone and especially the iPad.  Here's a video to take a look at it. It's a bit salesy but it gets across the point.

More gutsy, is salesforce going all in on HTML5 which is not only another aspect of the realization of the SFDC vision, but a body blow to Adobe and a further nail in the coffin of Flash.  This is the first enterprise company to my knowledge to make its standard web display language HTML5.  It's always tough to be the first one, though salesforce tends to revel in being first, but the dividends on this one will pay off big time.

The Final Stuff

A few things that aren't really mop up but don't "fit" into any "category" that I have in this article. Ironically, one of these is what might have been the most important announcement for all immediate practical purposes at the entire event.

Data Residency Option: Saving the Best for Almost Last

Almost last and maybe best, I want to single out the Data Residency Option (DRO), announced almost in passing at Dreamforce 2011. As far as I was concerned this may have been the announcement which, if it had been given its proper due, would have had the most immediate impact. Arguably, for the present,  it may have still been the most important thing announced at the conference.

The DRO is a straightforward affair. As a user, you have the means to control your own data the way you want. If you want all your data on the salesforce.com servers as all multi-tenant models have historically offered, you can do that. If you want all your data on your own servers, even with though your configured applications are on the salesforce servers, you can do that.  According to Marc in that SearchCRM interview mentioned above, you can even have specific data fields on your server with the rest of the data fields on the salesforce servers.

Do you realize how important this is?

From the inception of Software as a Service, one of the albatrosses around its neck was the perception that if you went with a SaaS or cloud model your data was insecure because it was controlled by the vendor not you. The fears about it ranged from "I can't get my data back if I quit" to "it can easily be breached" to "other customers might see it because this is all running off a single instance."  All of which were a lot of bull...crap.   But the fear persisted and was always one of the fear factors used by the on premise only crowd to scare people about SaaS as a viable delivery option.  There were a few genuine reasons to not like that model - especially with companies who had highly sensitive data that was secure. It wasn't in actual danger but it did violate regulations if it sat on someone else's servers. For example, you have to carry a certified secured area in fulfilling some government contracts and all the secured materials including data have to be within the bounds of that secured area.

But DRO literally lifts that albatross off SaaS's neck and lets the bird be a bird again, not a burden. With DRO, SaaS is free of the myth and the cases where it is a reality as any sort of problem and salesforce, by being first to market with this, sets a bar for all other on demand and cloud providers to meet when it comes to data storage.  Until the others do, salesforce will secure its dominance of the SaaS market even further with this move and provide something genuinely invaluable.

Single White Facebook

One of my smaller concerns (but I couldn't resist using the title of this section) is that salesforce is too Facebook dependent and overfocused on the relationship and "leadership" of Facebook. I realize that Marc has a. unbounded admiration for Facebook (personally, I have a heavily bounded admiration for them) and b. Facebook uses salesforce.com especially Chatter, but, to state the obvious, salesforce isn't Facebook. It's a platform to run business, which, to some extent, I'm sure Facebook wishes it could be. Meaning, it's time for salesforce to stop running in lock step with Facebook and parading its relationship to Facebook constantly.  Facebook has clearly done some things that are admirable with their interface with their personal focus as an enterprise social network, and, face it, with the fact that they have 1/8 of the world's population registered with them. Amazing. But salesforce has a different purpose and my concern is the constant deference to them is going to confuse things. If anyone has supported and advocated the consumerization of business, it's been me - for more than 7 years.  But I think that salesforce needs to tone down the Facebook-love and concentrate on how to both be fun in the workplace and provide the business outcomes that businesses need. Facebook can't do that. Salesforce can and for business, is far superior to anything Facebook will ever offer.

This isn't a big deal. Just something that I'm not alone in noting, so I thought I'd bring it up.

Salesforce & Social Transformation

One question that remains for me and wasn't answered at all by Dreamforce was what salesforce is doing internally to become, not a social enterprise, but a social business. To me, the social enterprise is the technology stack to enable a social business. But a social business entails more than having an extraordinary technology stack. It means a massive cultural change that provides for the empowerment of all its employees to take actions that are meaningful with other employees and with customers. IBM is spending what will amount to more than a billion dollars to make this transformation beginning this year and over the next few years. They publicly discussed the empowering of all 400,000 employees, with 50,000 of them "rolling out" this year with the ability to make decisions on the spot concerning customers and other employees without any running things up the chain, among other things.  That's more what I mean.  What is salesforce doing in that regard?  Just a question.

In Sum

Dreamforce was a seminal conference for salesforce.com. Even though they are the smallest company in the Big 4 when it comes to revenues, they've managed to become the company to beat due to their stellar commitment to their vision and their commitment to seeing its realization regardless of external circumstances. However, they recognize that those circumstances can impact the speed to resolution of that vision, but not the vision itself.

Their commitment to the social enterprise and building out the technology stack associated with it is not only laudable as an objective, its being actually realized by what they've already released and will be further enhanced by their Winter 2012 release. By this time next year, there will be a nearly complete stack, if salesforce follows through on their delivery schedule for their roadmap. They are typically better on those release dates than most of their enterprise brethren so I'm expecting that they will.

Chatter is clearly at the center of their investment in the social enterprise, and, while I don't think it is doing anything that hasn't been done elsewhere, as always its the way it is aggregated in combination with the vision that binds it that makes it a powerful channel for a successful social business.

As a result of their investment in the social enterprise, they seem to be (I think) beginning to realign their thinking on how they deal with partnerships. They are moving toward a creating a complete ecosystem rather than a series of apps that are made available because they are built on force.com. This approach is where they need to be at this point.

While progressing with the social enterprise, and the realization that this is a vision that will come to fruition in a few years, they also are locking down the SaaS market, their "legacy," with the announcement of the DRO which solves a prevailing perception by the market around the data security in a SaaS environment. At the same time, they are building the kind of ecosystem that can not only enhance and realize their vision but provide immediate value to their current customers.

They still have holes to fill and questions to answer. Of course this isn't surprising. There is no perfect company. The  biggest holes for them are delivery of a complete marketing cloud which remains a genuinely uncertain proposition at this point and providing a much stronger analytics engine than they currently do. I mean, they do have some powerful web analytics apps like Omniture being delivered on the AppExchange, but that is nowhere near enough. They are up against SAP Business Objects and Oracle's Hyperion-based products among others. Salesforce needs to step up their game here. They really, really need to. Great analytics services/applications aren't an option any more. Insight is replacing intelligence as a prerequisite to successful business results.  Analytics are central to insight solutions (my name for the category. You'll see something on this in a short while) - and even more importantly to successful business outcomes.

That said, even with these concerns, salesforce delivered a tour de force of messaging, (but not great "speechifying"), product and experiences that gives them the current crown when it comes to being on the top of customer's short lists - when the customer has the intelligence to think about the long term.  Their vision is so strong that when the customer reaches out, they are going to feel a palpable salesforce presence - and that's exactly what they have been planning. Their revenues will be a byproduct of that. The sales will follow the force.

Ain't life grand?  Salesforce.com certainly thinks so and kinda is.

Topic: Enterprise Software

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