Salesforce.com

Marc Benioff, CEO of Salesforce.com, is changing the way businesses view CRM (customer relationship management) software.

Marc Benioff, CEO of Salesforce.com, is changing the way businesses view CRM (customer relationship management) software. His software-as-a-service mantra helped propel the company to become one of the fastest growing companies in the Top Tech Index.

A reincarnation of the ASP (application service provider) model in the late 90s, Salesforce has succeeded where ASPs failed, that is, to provide a level of customization and flexibility that pre-Salesforce vendors did not provide.

Most Salesforce customers are pint-sized businesses who cannot afford to have packaged software sitting in their server rooms, and more importantly, the cost of maintaining them. Even when software engines are tuned, customers can continue to retain all customizations in their hosted applications. This saves lots of time in migration, and might even require--to the disdain of workers--a smaller IT outfit.

Competitors in the industry are sitting up to take notice of this five-year-plus disruptive upstart. Some, like NetSuite, have copied the same model smacked with their own unique flavors. Others, like Siebel, continue to put its money on business analytics in its CRM apps, something which it says Salesforce lacks.

Whichever way one looks at software on-demand, the pie is set to grow. According to IDC, delivering applications over the Web will rake in US$10.7 billion in 2009, from US$4.2 billion last year.

With Siebel soon to be acquired by Oracle, Benioff is confident the floodgates are open for on-demand software. But analysts cautioned that things might get a little tougher for Salesforce, now that the 800-pound gorilla could be armed with fresh arsenal from Siebel.