Salesforce.com: Understanding the 'social enterprise,' part 2

In Part One, I described the background behind salesforce.com's embrace of collaboration as a core business strategy.

Read also: Salesforce.com: Understanding the 'social enterprise,' part 1

This post discusses the company's enterprise strategy and explains how the pieces fit together into a social enterprise "operating system."

THE SOCIAL ENTERPRISE OPERATING SYSTEM

Although social computing and collaboration are critical elements of Marc Benioff's vision, salesforce.com's strategy extends more broadly. The company appears to be building a kind of modular, cloud-based enterprise operating system comprised of platform, data, and applications.

A recent blog post from salesforce.com's Chief Scientist, J.P. Rangaswami, describes the company's vision of a collaborative ecosystem:

The Social Enterprise vision is about rebuilding markets the way customers would build them in the first place.

That vision needs an enabling platform, a platform modeled around ecosystems rather than vertically integrated stacks, open rather than proprietary, actively engaging the customer and engaged by the customer.

That in turn requires an approach of federation rather than competition, federation with organizations that have similar principles, prepared to be built around the customer at the behest of the customer.

My friend and brilliant enterprise social strategist, Dion Hinchcliffe, Executive Vice President of Strategy at consultancy the Dachis Group, drew a diagram of the components that support Salesforce.com's social enterprise vision:

Social layer. Salesforce.com's social layer rests on the foundation of Chatter, a flexible platform that supports communication among people and also provides an interface between systems. I asked veteran software executive, Dennis Moore, to explain this point:

Chatter isn't just social as in people sending status updates to each other. Chatter is software-is-social as in software sending status updates. If all your applications published status updates, with links back to the place in the app where you can get more info or act on the status change, and if all status updates were organized in a taxonomy so you could look at specific topics across apps and people (e.g., a specific customer, or a specific deal, or a specific competitor), that is a potential game changer.

Chatter offers a communication transport system, or social "glue," that binds together the collaboration-related activities of salesforce.com's social enterprise operating system.

Data Layer. As Rangaswami's quote hints, the social enterprise operating system realizes value by helping organizations assemble modular software components, from multiple vendors, that closely track business needs. The underlying premise assumes flexible and adaptable systems that are more tightly coupled to customer business goals than is possible with monolithic, on-premise enterprise software provided by a single vendor or woven together through elaborate system integration or consulting projects.

Salesforce.com's platform includes several pieces:

• Force.com, which allows independent software vendors to build applications that seamlessly plug into into the Chatter transport described above. Force.com includes Appforce for rapid development of the CRM system, ISVforce (a series of technologies and processes that enable ISVs to develop on the platform), and Siteforce (a website and content management framework and product).
• Heroku, a developer-friendly code environment for programmers
• Database.com, which offers developers cloud-based, centralized, database storage for enterprise applications. Database.com is the underlying architecture for all Salesforce technologies.

The data layer provides the technical infrastructure needed to enable the "federated" collaboration groups described by J.P. Rangaswami.

Skeptics might characterize Rangaswami's federation as just another way to describe integration between systems, but the Salesforce view assumes greater flexibility, with faster implementations and cheaper integration, than traditional bolt-on product environments.

To understand the full significance of collaborative federation among organizations, we must look at the Application Layer.

Application Layer. One of the most interesting aspects of Dreamforce was salesforce.com's announcement of enterprise software partnerships. During the last year, the company focused on investments to encourage attracting a variety of independent software vendors (ISVs) to build products on Force.com.

During Dreamforce, it was clear that Benioff has listened to enterprise users, analysts, bloggers, and other folks with a stake in collaboration in the enterprise. His keynote speech specifically called attention to the importance of integrating collaboration in the context of enterprise business processes.

Collaboration practitioner, Laurie Buczek, wrote a compelling post on this precise topic, explaining the imperative to connect collaboration to business process context, process, and workflow:

So, here is my stake in the ground on what is the big failure of Enterprise 2.0 social business:

The big failure of social business is a lack of integration of social tools into the collaborative workflow.

At Dreamforce, salesforce.com highlighted several true enterprise vendors with strong credentials developing systems in ERP, manufacturing, finance, and related areas. ZDNet blogger, consultant, and analyst, Brian Sommer, describes several of these ISVs:

Kenandy -  Kenandy is a new manufacturing solution being developed and sold by Sandy Kurtzig. They’ve already got one customer live after just a two week implementation.  What’s different about their approach is that they’re creating an ERP solution with an outside/in view of a manufacturing business (instead of the usual view inside the four walls of the factory). Their application suite currently has a number of distribution and manufacturing apps. Integration with third party financial software will be accommodated with cloud products like FinancialForce.com.  (FinancialForce.com is a Salesforce.com and Unit4 joint venture firm.)

RootStock - Rootstock announced a new version of the product that is integrated with the Force.com PaaS of salesforce.com. This puts RootStock in two of the biggest PaaS platforms for commercial software. In the Force.com ecosystem, RootStock will integrate with other cloud financial software but can directly and tightly integrate with FinancialForce.com  and the salesforce.com CRM applications.  Rootstock also got investment monies from salesforce.com.

Infor -  Infor CEO Chuck Phillips indicated that they are making Infor MRP/ERP data extensible to/from salesforce.com CRM applications. They’ll be exposing this data to the Force.com architecture. This may be more of a labor saving and convenience item for now but could presage other Force.com developments between Infor and salesforce.com.

Workday -  Workday co-CEO Aneel Bhusri and his management team held a technology confab for analysts last Monday. They covered a number of topics showing how Workday is dealing with massive data volumes, large dataset processing, etc. These are the issues that cloud ERP vendors must address if cloud apps are to serve the largest enterprises well.

The significance of these partnerships lies in their ability to help salesforce.com execute its vision of modular, inherently collaborative, enterprise software. Although Salesforce has long proposed that customers can weave together applications from multiple vendors running on Force.com, the new partnerships bring that vision a step closer to reality. Folks like Workday, Infor, and Kenandy may well possess sufficient enterprise street cred to encourage buyers to take the risk on salesforce.com's vision.

For vendors such as a SAP and Oracle these announcements have little meaning in the present, but they do represent a potential long term threat. As I said on Twitter during Dreamforce, "The future of ERP is seamless modules, provided by multiple vendors, to keep implementation and purchase simple."

Salesforce.com and its partners will become a genuine threat to established enterprise software vendors only when they can demonstrate collaborative solutions (in the sense of weaving together a larger whole from smaller applications that share a common data store) that are:

• Modular and tailored to customers' specific needs
• Fast and easy to implement
• Lower cost
• Reliable, functional, and scalable
• Secure
• Proven over time

Dion Hinchcliffe also has some reservations about salesforce.com's vision, but maintains a measured and generally positive view:

In the final analysis though, I instinctively find the whole picture to be one in which slightly too much control ends up in the hands of Salesforce and not enough to the customer. Those that read my writing know that I’m very bullish on social business and it now seems to be a virtually inevitable transition for most businesses. Is Salesforce the combined platform and business vision that will get them there? I think the answer is yes if you have needs to overlap with the culture, focus, and strengths of the company. The answer is still no if one of the concerns above is true. I do think that they will ultimately remove many if not all of these objections. This will put them perhaps at the top of the list of the world’s pre-eminent social business enablement companies. For now, they are one that most companies will need to consider, even if it’s just to learn what they know about social business.

To round out this analysis, I asked salesforce.com's Vice President of Market Strategy, John Taschek, to summarize his view of the company's strategy:

We are seeing a rapid and seemingly unstoppable shift in the way people consume and use all technologies, whether enterprise or consumer. Activity streams, for example, bring elements of discovery and the capture of corporate institutional knowledge into an organization at the corporate and the personal level. Activity streams that are tied into business process enhance and are a necessary part of this discovery - there is an unquestionable advantage to have business data "talk" to you via an activity stream - the alternative is that one has to know what to look for in order to find it. We find that in these days of information overload - real data feeding into your stream provides true value.

Meanwhile, we see the platform as a way to develop new applications that take advantage of the technologies that are being built. They don't necessarily have to be from any one vendor or solution provider - they are being tied together through open APIs, more open business processes, and an innovation cycle that is escalating intensity even if it is still considered nascent technology.

Finally, a real catalyst behind all of this is the advent of truly mobile computing platforms, first realized by the iPad and followed by Android and other tablet makers. The concept of booting and loading a desktop computer in a mobile workforce is increasingly becoming anathema to the way people work. These mobile technologies are the catalysts for social growth and when they are tied into the platform and the technology they provide a huge value to any company using it.

CIO guidance.For salesforce.com, the social enterprise describes end-to-end computing services in a strategy that explicitly recognizes the importance of human communication and collaboration. Watch closely to see what happens with the company's new enterprise partnerships. Although salesforce.com's day of proof has not yet arrived, we should not dismiss the company's potential to execute on its vision.