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For Executives, Entrepreneurs, and other Digerati who need to know about SaaS and Web 2.0.

Archive for November 3rd, 2008

Customer Relationship Experience: The Strategy Behind Salesforce Sites

Posted by Bob Warfield on November 3, 2008

The big announcement at Dreamforce this year is Sites.  At the simplest level, Sites brings the ability for companies to have host their corporate web sites.  On the face of it, that sounds pretty tame, almost a flash back to the oldest of cloud computing directions: web hosting.  There is more to it, of course.  As Ben Worthen reports from the WSJ, this makes it easy for companies to develop applications to connect their users to back office applications such as’s CRM/SFA flagship.  Bernard Lunn thinks the timing is right to attract a lot of developers to the platform because of this proposition. 

Salesforce has sweetened Sites and further by tying into both Facebook and Amazon Web Services, making it possible to build hybrid applications that span all three platforms.  The combination of these outwardly facing applications and the connections with other Cloud platforms is causing some like TechCrunchIT to speculate that the announcement means closer ties with Microsoft and Google.  While Salesforce is already pretty close to Google, they’ve kept their distance from Microsoft.  Will they support Silverlight and Mesh in this new framework?  Time will tell.

But is this announcement, as an article in CNet implies,  simply about making it easier for customers to deal with the infrastructure needs of a modern web site?  Is it really about quick and easy mashups between Salesforce applications and your web site?

Actually, there is a lot greater potential than is being discussed.  Salesforce has a shot at getting control of what I call the “Customer Relationship Experience.”  We’ve all heard about CRM or Customer Relationship Management.  CRE is related, but what is it?

It’s related to the term “User Experience” that is commonly used to describe an interaction with software.  Great User Experience can be a major contributor to commercial success.  We all know Apple has built a number of fabulous franchises around User Experience, and no software company ever wants to be know for software that is hard to use or has a bad Use Experience.

Relate that back to your customers.  Customer Relationship Experience is the sum of experiences that go into creating a relationship between a business and its customers.  In the Web Millenium, it is at least as important as User Experience.  Over time that Customer Relationship Experience will have more and more to do with a company’s web presence. 

Now let’s take that perspective and consider what it means to bring the corporate web site onto the same platform as the corporate CRM system.  Are you beginning to see the potential of a high quality integration between these two?  Imagine if your CRM system absolutely knows all about every one of your customers, and about every interaction they have have had with your corporate web site since before they were even customers.  Is it beginning to make more sense?  Consider the implications for improving your sales efficacy and really driving home that single point of contact 360 degree view of the customer that CRM vendors have always talked about but never delivered.

In fact, through Sites, Salesforce is creating a ready channel and test bed for a whole range of new application modules that will be powerful and compelling.  Tomorrow I’ll post about some of the work we’re doing at Helpstream that dovetails nicely with this view of the world and brings even more power to the CRM system.

Posted in Marketing, saas, strategy, Web 2.0 | 2 Comments »

Enterprise SaaS is Mainstream. Today.

Posted by Bob Warfield on November 3, 2008

It’s the High Holy Week for SaaS this week with the faithful attending Dreamforce.  While that event is focused on and its ecosystem, most companies that have anything to do with SaaS or an interest in SaaS will at least peek in online to see what’s being announced there.  As Bernard Lunn puts it in his RWWeb post:

Enterprise SaaS is going mainstream, it is a big market to get into right now.

The italics are mine, but I think they’re important, because there is considerable SaaS and Cloud uptake today among Enterprises and not just small businesses.

We’ve all heard the list of objections about the cloud or SaaS many times.  Chief among those arguments are security, reliability, and portability.  And no sooner do you get past those with some technical stratagem or two than someone brings up regulatory issues, which only impact very narrow markets.

But here is a newsflash: the Enterprise is in the Clouds today and loving it.  How do I know this?  Let’s consider a couple of stories that recently popped up. 

First, was the story of GE launching Aravo, a SaaS Supply Chain solution.  I was surprised to see this one pass so quietly, because it is so symbolic of the uptake of SaaS among Big Enterprise.  There aren’t many companies who can serve as a better poster child for this than GE, for example.

Second, I was perusing the latest good quarter’s results from my old Alma mater Callidus, and chanced upon some fascinating figures for their SaaS business:

  • 59 customers
  • 73,000 seats
  • $24.8M in annual recurring revenue

A quick look at the math reveals an average deal size of over 1200 seats.  Not only is that quite large by SaaS standards, but think about what it means.  Callidus is a sales compensation application, so the average SaaS customer has over 1200 sales people.  No small company that!

I called up Steve Apfelberg, SVP of Marketing at Callidus to ask about the numbers and got the following response:

“While our Callidus On-Demand solution has been critical to our growth in the mid-market, the demand for it has by no means been limited to that segment.  Many large, global enterprises prefer to manage the mission critical business processes of sales performance and incentive management in an on-demand environment.  Callidus Software’s almost 60 on-demand customers, with average annual revenues of greater than $1 billion, are a good proof point that large companies are adopting SaaS.” 

“We’re strong believers in the benefits that SaaS and PaaS bring to customers and are excited to showcase Callidus Plan Communicator, our first native application, at next week’s Dreamforce event in San Francisco.”

Well there you have it.  The average customer for Callidus’ SaaS solution is a company with over $1 billion in annual revenues.  Note that the data in the Callidus system is extremely sensitive–it tells you everything there is to know about the revenue side including best salespeople, best customers, pricing, best products, territories, etc., etc.  Callidus has gone to some extraordinary lengths to safeguard all this and as a result, they’re winning big enterprise deals. 

As I say, SaaS is mainstream in the Enterprise today.  Perhaps not for every enterprise, but there are enough out there that we’re way past establishing a beachhead and getting them to try it.  I suspect the current economic climate will accelerate the process further.  SaaS does nothing better than save costs and increase the likelihood projects will be successful.

Aside from the economy, it’s important to note that all the key players are anxious for a seat at the Cloud table before the incumbents gobble too much share.  Microsoft in particular is making some interesting moves.  Making large parts of their Azure Cloud API’s REST enabled will ease their connection to the non-Microsoft world and is a canny move.   Robert Scoble further underscores how effective Microsoft’s sales and evangelism can be in helping to spread the word.

Related Articles

Vinnie Mirchandani boils it down to dollars and cents in a great post where he says:

A few years from now, I have a feeling I will be telling some other client “If you could be like GE…you could drop a billion to your bottom line through aggressive use of SaaS and clouds”.

Posted in platforms, saas | 1 Comment »

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