Why those enamored of Salesforce are talking nonsense

What the heck is Salesforce playing at with its Radian 6 announcement?
Written by Dennis Howlett, Contributor

The Salesforce.com acquisition of Radian 6 has, in the words of Simon Wardley got the popular media:

...all agog with news of Salesforce’s recent acquisitions including Heroku for $212M and Radian6 for $326M. Some of the comments question such expensive purchases but these are very astute moves and it’s worth exploring why.

He is correct. Everyone seems to have a positive opinion but usually without any consideration of key factors that matter to the enterprise. As you might gather, I am less than convinced.

While Simon eulogises Salesforce in these terms:

With a market cap of $17+ billion, Salesforce is playing a powerful game and growing rapidly. The purchases of Radian6, Heroku, DimDim and others will only help its cause and undermine the position of its competitors.

Smart move, smart play, smart people.

...he utterly misses the point. Market caps come and go - anyone remember Baan in 1995 and how they crashed a few years later? Why would I draw that analogy?

Salesforce.com has done a fantastic job in redefining the use case for sales force automation among users who were less than convinced by Siebel or SAP. It has gone on to try the same with call service. Latterly it has understood that in the saas world, platform plays can be powerful. But....behind all of this it is a 10 year old technology that is only growing up very slowly and which is creaking.

Two plus years ago, Salesforce co-founder Parker Harris sat down with Frank Scavo, Vinnie Mirchandani, Ray Wang and myself talking about re-engineering Salesforce for in-memory database. I was super excited because in my mind, if Salesforce could transition to that technology then it would have two things going for it:

  1. Lightening fast response
  2. A genuine opportunity to deal with its less than stellar reporting issues

Less than 12 months later that thought/project was dead. I was surprised. But then perhaps not. Fast forward to today when it was recently announced that Salesforce has renewed its Oracle database foundation deal. I guess that Larry Ellison, CEO Oracle's stock holding pulls development power. Make no mistake. Despite Salesforce insistence that it has stripped down Oracle DB to get the maximum performance it is still licensing Oracle. That creates a lock-in that constrains Salesforce.

More to the point, Ray Wang, Constellation Research CEO makes a number of interesting points:

Bring social analytics or socialytics to the Salesforce.com offerings. Sales and Service Cloud will gain new capabilities in social media monitoring and engagement.  Today’s companies seek the tools to bring social customer strategies with existing CRM processes and organizational structures. A social media monitoring and engagement platform provides a critical tool for success in Social CRM (SCRM).

...as a starter. On back channels I challenged Ray to explain what this means. Why? Because for me, Salesforce is applying layers of new technology without thinking about the core integration. In other words it is 'nice' but provides one more pain point for CIO/business to manage.

More broadly, I am deeply concerned that Salesforce is becoming a company that I don't understand. What does it stand for?

At one point you could easily say it is trying to redefine CRM in a positive way. But then the addition of developer communities (with Heroku), its move to becoming a media company (which I believe to be wholly ill thought through), the whole PaaS Force.com platform that partners I deal with are grumbling about and now the Radian 6 announcement seem to indicate that Salesforce is either placing multiple bets or is plain dumb.

None of this matters if you are a 50-100 person company. But Salesforce has made clear it wants to play in the seriously large enterprise space. Does Salesforce think for one minute that those decision makers will not be looking at the company's moves and wondering what the heck is going on?

Fashion discussions are fun but the buyers I speak with don't care. They want results now (which Salesforce can deliver) but with a determinable future. Right now I have no clue what that looks like other than in 'fun' and 'fashionable' terms. My buyers have more important problems to manage. Do yours?

You decide....

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