Last week, Siebel VP and GM for OnDemand and SMB (small/medium business) Bruce Cleveland appeared to emerge from hiding with a stake-in-the-ground sort of letter to "friends and colleagues" that came across as a declaration that Siebel's ASP-style (application service provider) competitor to Salesforce.com had officially re-opened for business. On the ASP-front, Siebel has had a rocky go of things. I used the opportunity to blog the full contents of his letter as well as to mention that two research outfits -- Gartner and Nucleus -- had been questioning the strategic value of ASP-delivered solutions. The post drew both Rightnow.com CEO Greg Gianforte and Salesforce.com CEO Marc Benioff out of the woodwork. Said Gianforte:
Gartner is highlighting with Salesforce.com the problem in building a toolkit vs. a complete solution. This is emphasized with their new association with Accenture. Haven't we learned from Corporate America that toolkits don't work? The Global 2000 and midmarket customers that I speak to are not asking for a toolkit. They want one CRM solution that is flexible and open to enable integrations and some customizations.
Salesforce should consider changing their name to "the On Demand ToolKit."
Good to see Siebel is finally making themself available. I would like to publicly announce my continuing availability, and vow to never go into a bunker!
Hope you and your family have a wonderful [Memorial Day] weekend.
As if he knew that Gianforte (or someone) might attack Salesforce, and in response to my question as to whether or not the public-company tempered Benioff would be drawn out by the remarks made by Siebel's Cleveland, Benioff wrote:
I am buttoned up? Did you check out our announcement this week?
The link takes you to a video of Benioff's recent announcement of CustomForce 2.0 and during the presentation, Benioff's claims about what customers want comes in stark contrast to what Gianforte said customers want. Said Benioff during the presentation:
Customers said to us, "We want customization. We want the ability to modify your applications".... Customers don't want generic CRM and they don't want vertical CRM either....You know, you used to have to change your company to reflect your software. We have this new idea that maybe you should be able to change your software to reflect your company. We think that is what customers want today.
Although it was hard to tell exactly which of the many companies he was citing have taken Salesforce.com out of the box and which have customized it with the CustomForce toolkit, there are apparently both large customers and ISVs (partners) -- including Paymentech, Spherion, Microsoft and Nextel -- that are taking advantage of Salesforce.com's deep customizability. In other words, Benioff's claims regarding what Global 2000 and mid-market customers want contradict what RightNow's Gianforte is claiming for the same customer types. My sense is that it's not a one-size-fits-all bunch. Some will want deep customizations. Others will want something a bit more along the lines of what RightNow offers.
One key point made by Benioff is how, unlike with his previous employer's software (Oracle), the process of upgrading won't break your customizations. Comparing Salesforce.com to the new Playstation 3, which can run games from the previous two versions (1 and 2), Benioff said that any changes that were made in CustomForce 1 will automatically appear in CustomForce 2.0. Whether or not Salesforce can keep to that commitment over the very long haul remains to be seen. Sooner or later, every software company has had to part with its past.
One final note regarding the research from Gartner and Nucleus and the questioning of the long-term cost benefit of going with the ASP route. So what? Even if it costs more to some companies (and I'm not saying it does), it might be worth it. I know plenty of companies that are willing to pay a little extra to avoid the headaches that go along with running mission critical applications (like systems management). For companies that don't have an IT department and that don't want to hire one, the convenience of ASP-delivered on-demand applications is often worth its weight in gold.