This past week, three events took place that will unexpectedly transform the boring world of enterprise software into an exciting, competitive, and fun place. Perhaps enterprise software may yet become sexy after all.
The three significant events:
Salesforce.com showed it can be a genuine enterprise cloud player
SAP demonstrated execution of a coherent cloud strategy and signaled an end to the uninspired, even lackluster, complacency of recent years
Workday suggested possible plans to compete more closely to SAP's home turf
Taken as a whole, these events foreshadow a vibrant competitive landscape for enterprise software. Disruptive industries become interesting from quality products, smart entrepreneurial competitors, and established incumbents who fight back hard.
For the first time in years, I see the possibility of engaged (and interesting) sparks and nails competition at the high end of enterprise software.
SALESFORCE.COM: CATAPULTING INTO THE ENTERPRISE CLOUD
In front of 30,000 people at Dreamforce, company CEO, Marc Benioff, proved that enterprise software can be fun. With Stevie Wonder, former president Bill Clinton, and his own unrestrained enthusiasm, Benioff entertained and delighted the crowd. Openness and authenticity are among the most powerful human forces; together, they create the feelgood mojo necessary to make enterprise software sexy. Marc, thanks for bringing fun and delight back to boring old enterprise software.
My friend, Paul Greenberg, who is recognized broadly as the "Godfather of CRM," described Marc's efforts to "consumerize" the enterprise:
His way of approaching that is not just to assume that the line of business users have been “consumerized” but to assume that IT has too - a correct assumption. Departments and the individuals in those departments have jobs to do - and they need to feel good about doing those jobs - while still meeting their KPIs and departmental imperatives.
More substantively, Salesforce announced several products and partnerships that reinforce its intention to become a major enterprise applications and platform vendor. These include:
Unveiling database.com, which exposes the database portion of the company platform, making it available to developers independent of other Salesforce products
The acquisition of Ruby on Rails platform vendor, Heroku, which offers developers a robust infrastructure for creating and deploying social, mobile, and situational applications
A partnership with Remedy, called RemedyForce, which will offer IT service management (ITSM) capabilities
A free version of Chatter, the company's social collaboration product, intended to bring social networking to business processes in the enterprise
Salesforce.com now offers a diverse product set of interest to various constituencies in the IT and the corporate environment. These include platform and applications aimed toward departmental end-users, corporate developers and independent software vendors (ISVs), centralized enterprise IT shops, and others.
This photo shows Marc Benioff standing next to a slide of Salesforce.com's primary offerings:
Specifically to expand its enterprise footprint during the coming year, I expect Salesforce to deliver additional products, potentially make more acquisitions, and announce new partnerships. As fellow ZDNet blogger, Dennis Howlett, describes, this is important because Salesforce does not yet cover full enterprise processes:
Salesforce on the other hand is not handling a single business critical process. Shocked? Go figure. It is parsing pieces of the pie but it cannot legitimately claim ownership of entire processes
Still, it is fascinating to consider Salesforce's evolution from departmental solution provider to enterprise player. To appreciate this, check out a screen capture of the company's website from the year 2000:
Distinct from the scope of the company's enterprise process coverage, social collaboration is foundational to Salesforce.com's enterprise vision. In contrast to other enterprise vendors, Salesforce has embedded its Chatter collaboration product into the deepest layers of its platform.
This investment in technical architecture reflects Salesforce.com's view that collaboration software will enable organizational change and drive evolution of culture, hierarchy, transparency, work relationships, and so on. A recent video interview with Marc Benioff describes the company's perspective in more detail.
The strategic importance of collaboration to Salesforce explains the appointment of J.P. Rangaswami to the position of Chief Scientist. Rangaswami, who was previously CIO of several large organizations, combines impeccable enterprise credentials with strongly held beliefs around social technologies in business. Therefore, we can expect J.P. to serve Salesforce as collaboration thought leader, enterprise strategist, and even CIO salesperson. Frankly, it's a great fit for both sides.
Strategic analysis. Salesforce.com is now a legitimate enterprise player possessing a clear collaboration-centric vision. Within the scope of process that Salesforce automates, the company brings a fresh and coherent perspective.
At the same time, we must recognize Salesforce as a company in transition that faces two significant risks. First, Salesforce's product collection has become sufficiently diverse to be confusing; this issue is manageable and I expect the company to address it during the coming year.
Second, and more difficult to solve, is managing tensions inherent in selling to large enterprises. Historically, Salesforce sold to end-users in small companies and departments of large organizations. The focus was meeting user needs, which often meant doing an end run around centralized IT departments.
Today, Salesforce faces a complex customer environment that includes conflicting, and even mutually exclusive, goals and requirements. The conflicting demands imposed by enterprise customers are a challenge for every enterprise vendor, including Salesforce; that complexity also militates against the simplicity and delight that Salesforce has championed over the years.
To retain the feelgood mojo of its youth, which is one of the company's great strengths, Salesforce must manage the complexities inherent inside enterprise customers. Large enterprise vendors often sacrifice customer delight to features, functions, process, conformity for its own sake and, dare I say it, greed. Only time will tell whether Salesforce's vision and determination are sufficiently strong to maintain that great feelgood mojo in the face of upmarket enterprise pressures.
Advice to enterprise buyers: Beyond the social layer, Salesforce has demonstrated consistency in developing, innovating, enhancing, and supporting its products. The company is doing a lot right and it's hard to argue with its core strategy; I strongly agree that social business software will inevitably form an integral part of traditional enterprise processes.
Despite frequent hyperbole, Salesforce understands CIO needs and continues to take steps that deepen its relationship with CIOs, IT, and the business.
Portrait of Stevie Wonder by Michael Krigsman. Stevie Wonder's concert at Dreamforce 2010 represented an epitome of feelgood mojo, so it's fitting to begin this post with a metaphorical reminder that enterprise vendors should always strive to delight their users. Sadly, that does not happen often enough.
Photo of Marc Benioff supplied by Salesforce.com. Disclosure: Salesforce.com and SAP split the cost of my travel to San Franscisco. SAP is a current client.