Despite a successful IPO and an 85 percent year-on-year increase in its customer base, industry watchers are still asking tough questions about the long-term viability of application service provider Salesforce.com.
In particular, analyst group Gartner has questioned the company's ability to attract large companies into using its hosted CRM software. In October this year, the analyst group also claimed that less well-known competitor RightNow was up to two years ahead of Salesforce.com in terms of the sophistication of its offering.
However, some industry veterans are convinced of the start-up's long-term potential, not least IT veteran of 20+ years Pat Sueltz who joined the company from Sun in February this year.
Sueltz joined Sun in 1999 as executive vice-president and general manager of Sun's Software Systems Group. In 2000, she was ranked one of the "50 Most Powerful Women in Business" by Fortune Magazine, according to Sun. Prior to Sun, she spent about two decades at IBM.
ZDNet UK spoke to Sueltz, now president of marketing, technology and systems at Salesforce.com, about the viability of the company given the competition not only from existing CRM vendors such as Siebel but also Microsoft, which recently entered the CRM space, and a new breed of open-source CRM specialists.
Q: Gartner recently released a report questioning the savings large companies can achieve from using rented software as enterprises typically measure total cost of ownership over three years. What is your reaction to that?
A: This is one I don't agree with. I think what Gartner is doing -- and this is conjecture -- is talking to a lot of customers who have to get a return on their existing assets or they get fired. The fact is we have such great functionality, such an elegant offering and you can get it at list for $125 per person -- less than you'd pay for a cell phone contract. I suspect they are saying, "Well if you look at it the way we have always done IT, you have got to make sure that you just don't throw out your home-grown stuff, so how could Salesforce.com be successful?" Absolutely you can't do that and nor would we go and try and sell people on that. I would say meet the customer where they are, where they are coming from and take them where they want to go tomorrow.
Can large companies really get the kind of integration they require with their ERP systems if they opt to use Salesforce.com compared to a packaged software?
ADP (the human resources outsourcing firm) are at 3200. I think we have folks growing all the time. When I was being recruited to come to Salesforce.com, I met with Jim Steele [Salesforce.com president of worldwide operations] on Christmas Eve morning in a little dive coffee shop near where the two of us live and while we were there talking about Salesforce.com he was there closing the deal with ADP. I arrived at Salesforce.com on February 27th, two months, a little less than 60 days later and ADP was already implemented. I don't think all 2000 were on but they had a big percentage of folks who were already on Salesforce.com. So big companies can integrate.
Is it critical to your future to get large customers on board?
Easily we could have said that we are just going to do small business. But what happened is that because it is so compelling to use the product, existing customers began talking about us and growing. And I don't know any company that ever wanted to stay small. People talk to people and say this is so easy – Cisco went from about 200 users when I got here to over 600 now.
Going back to that meeting you mentioned earlier with Jim Steele, what were the kind of questions you were asking him about Salesforce.com when you were trying to decide if you wanted to join the company?
I had many questions. I had already gone and spoken with Marc [Benioff]. With Marc I wanted to know about his vision, his personal values, I wanted to know about the value proposition. This isn't just a 'go in and get out', we are in this for a long time. I wanted to know would I like working with these guys if things were great and would I like working with these guys if they weren't great -- would I trust them? Also the integrity -- are these guys doing Enronesque deals?
Is there a two year plan for how the company is going to grow -- is it going to grow beyond CRM?
Are you trying to ask if I am trying to take on SAP?
No, I am not trying to ask that. A lot of online services companies have plans to grow beyond their immediate business – Google isn't just about consumer Internet search anymore for instance. So which direction is Salesforce.com going to move in?
Well, I think we have a lot to do in CRM. If you think of Salesforce.com, if you haven't used the product then you'll probably think its just Salesforce.com automation but it more than that already – we have marketing for example. I can also do analytics that allow me to see what are the trends, and how we are doing. Think of Salesforce.com as being a hub for sharing and managing information. I am not doing ERP and we are not trying to replace those guys -- we are trying to do that sharing and management of information as you relate to a customer and your Salesforce.com. It is the one universal thing every company does.
But is being branded as Salesforce.com limiting in where you can take the company?
It hasn't been so far. I think it is what it is and I think what we are seeing is a life-cycle of sharing information, largely to do with CRM and there is a lot involved with that so there is a lot of room to grow there. The name of a lot of software companies is not a description of what they do – Siebel systems is just someone's name, SAP is acronym…
But they are non-specific so they are able to branch out?
International Business Machines was descriptive and it hasn't stopped them.
Jack Messman talks about the rising tide of open source – it is at the OS layer at the moment with Linux but it could eventually overtake business applications such as CRM – there is already an open source CRM player SugarCRM. Are you concerned that you may eventually be competing with open-source competitors in the same Microsoft is in the operating systems space?
I have seen SugarCRM, I watch all the competitors and I adapt. Do I think I need to go open source to develop faster? I think I can go pretty fast at the moment. I am not saying this to belittle open source, I love the community and I love the lifestyle but I think that is a different model. It used to be that only two people in ten in my team were working on innovation in traditional software roles but now I have eight out of ten. Will I look at it sometime? Absolutely, if I think I can do something better I am always looking.
Gartner have commented that RightNow are ahead of Salesforce.com in terms of product development by almost two years with one of the advantages being cited that it has a non-on-demand product where you don't. Has Salesforce.com got any plans to ship an off-line product?
I think right now, RightNow has some more function, they have been at it longer but they aren't integrated into the CRM like we are – the total marketing, the analytics and all the other pieces. Is it competition? Absolutely but it like any other game, scores go up and scores go down and this game has barely begun.
You were voted one of the 50 most powerful women in business by Fortune magazine recently – how do you feel about the representation of women in the IT industry – are their enough women?
No, I don't think there are enough. Inclusivity and diversity is good for business.
Do you think there is sexism in the industry?
I don't know that I would call it overt sexism, I don't run into that. But I do think there are reasons that women don't end up in engineering and I find that troublesome. Some of it is still due to the fact that women still carry the burden for child-raising and that is a choice but it is good to have the choice.