Salesforce.com; a commodity product?

Salesforce.com; a commodity product?

Summary: A study published today from Nucleus Research reveals that Salesforce.com's momentum may be slowing.

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TOPICS: Salesforce.com
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A study published today from Nucleus Research reveals that Salesforce.com's momentum may be slowing. The good news is that Salesforce.com's customers realized positive ROI, but most did so by simply replacing a paper-based or individual contact management solution.  Also, few companies had deployed to more than 500 users.  One of the biggest challenges facing Salesforce.com, according to Nucleus Research, is that 38 percent of Salesforce.com customers are open to switching vendors.

"This partly indicates the low switching costs of on-demand but highlights the fact that for many customers Salesforce.com is a commodity product, not a strategic one that impacts the way they do business,” said a press release.

The study also found that 28% of customers had deployed another CRM solution to supplement the functionality in Salesforce.com and achieve effective integration.

If it's going to win the next round, Salesforce.com will have to step-up its efforts to offer more functionality and strategic value to attract, retain, and grow with its customers.  

Topic: Salesforce.com

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  • Other CRM vendors

    Other vendors, such as Salesboom.com and Netsuite are winning over Salesforce.com costumers with more robust on demand business applications for the small business. Let?s admit it; Salesforce.com is for the small business. They might have closed few deals 5000-users or more here and there, but their average is something like 18 users per costumer.
    president@...
  • Salesforce Commoditized?

    Microsoft has 40 million small businesses who are loyal users of Office, Access, Windows and the like. They use it because it's cheap and offers extraordinary levels of utility. The market size for CRM probably could look a lot like the MS Office market were it not for the extraordinary prices and complexity demanded by the current on-demand three-headed monster--Siebel, Netsuite, and Salesforce.

    Salesforce has 350,000 (or so) at last count. Surely there is a bigger market out there that is not being addressed by the current spate of on-demand offerings. Mass adoption of web applications by small and medium size businesses won't come until Office-like pricing arises in the market. Such pricing is now possible given the high level of automation and low cost of a the latest IT infrastructure components. Couple cheap infrastructure with the emergence of commercially viable Open Source web applications (a la Sugar Open Source CRM) and you'll start to see $5 per /user/mo pricing for functionality that Salesforce charges a minimum of $65user/mo for. As awareness of open source alternatives grows so will the vulnerability of Salesforce's business model.
    jminich
  • Salesforce Commoditized?

    Microsoft has 40 million small businesses who are loyal users of Office, Access, Windows and the like. They use it because it's cheap and offers extraordinary levels of utility. The market size for CRM probably could look a lot like the MS Office market were it not for the extraordinary prices and complexity demanded by the current on-demand three-headed monster--Siebel, Netsuite, and Salesforce.

    Salesforce has 350,000 (or so) at last count. Surely there is a bigger market out there that is not being addressed by the current spate of on-demand offerings. Mass adoption of web applications by small and medium size businesses won't come until Office-like pricing arises in the market. Such pricing is now possible given the high level of automation and low cost of a the latest IT infrastructure components. Couple cheap infrastructure with the emergence of commercially viable Open Source web applications (a la Sugar Open Source CRM) and you'll start to see $5 per /user/mo pricing for functionality that Salesforce charges a minimum of $65user/mo for. As awareness of open source alternatives grows so will the vulnerability of Salesforce's business model.

    Jeff Minich
    iRadeon.com
    jminich