Salesforce and VMWare have big news today with the pre-announcement of VMForce.  Inevitably it will be less big than the hype that’s sure to come, but that’s no knock on the platform, which looks pretty cool.  Fellow Enterprise Irregular and Salesforce VP Anshu Sharma provides an excellent look at VMForce.

What is VMForce and how is it different from Force.com?

There is a lot to like about Force.com and a fair amount to dislike.  Let’s start with Force.com’s proprietary not-quite-Java language.  Suppose we could dump that language and write vanilla Java?  Much better, and this is exactly what VMForce offers.  Granted, you will need to use the Spring framework with your Java, but that’s not so bad.  According to Larry Dignan and Sam Diaz, Spring is used with over half of all Enterprise Java projects and 95% of all bug fixes to Apache Tomcat.  That’s some street cred for sure.

Okay, that eliminates the negative of the proprietary language, but where are the positives?

Simply put, there is a rich set of generic SaaS capabilities available to your application on this platform.   Think about all the stuff that’s in Salesforce.com’s applications that isn’t specific to the application itself.   These are capabilities any SaaS app would love to have on tap.  They include:

Pretty potent stuff.  The social features, reporting, integration, and business process management are areas that seem to be just beyond the reach of a lot of early SaaS apps.  It requires a lot of effort to implement all that, and most companies just don’t get there for quite a while.  I know these were areas that particularly distinguished my old company Helpstream against its competition.  Being able to have them all in your offering because the platform provides them is worth quite a lot.

There is also a lot of talk about how you don’t have to set up the stack, but I frankly find that a lot less compelling than these powerful “instant features” for your program.  The stack just isn’t that hard to manage any more.  Select the right machine image and spin it up on EC2 and you’re done.

That’s all good to great.  I’m not aware of another Platform that offers all those capabilities, and a lot of the proprietary drawbacks to Force.com have been greatly reduced, although make no mistake, there is still a lot to think about before diving into the platform without reservation.  Force.com has had some adoption problems (I’m sure Salesforce would dispute that), and I have yet to meet a company that wholeheartedly embraced the platform rather than just trying to use it as an entre to the Salesforce ecosystem (aka customers and demand generation).

What are the caveats?

First, this is just an early glimpse.  You can’t actually go try this thing out and pricing isn’t even being talked about until this year.   Historically, pricing has been another Achilles Heel of the Force platform, although I know Anshu disagrees with me on that one.  We got our Helpstream service to the point where it cost 5 cents per seat per year to deliver the service.  Don’t be surprised if VMForce is a LOT more expensive than that.  Second, ISV’s will also have to wonder whether Salesforce is friend or foe.  At Helpstream, we finally got comfortable with the idea that they are a sort of Dr Jekyll and Mr Hyde.  Their product organization viewed us as competitors, and would’ve been only to happy to wipe us off the face of the Earth.  Meanwhile, we were getting around a hundred leads a month from being on the AppExchange and they were good quality leads.  We were able to appear at Dreamforce, and it was a good venue for us.

But VMForce represents a much higher degree of collaboration.  Take advantage of all those juicy services and it will be hard to back out of that platform, Java or no Java.  There just isn’t anything else like it, and that’s the real distinction of VMForce.com.  It’s a brilliant repackaging of some great functionality from the Salesforce apps as a platform.  What remains is to see if Salesforce can behave itself and act like Switzerland the way a platform vendor is supposed to.  And don’t overlook what kinds of data will now be completely beholden to that Swiss Data Bank.  The heavy focus on Social will be very powerful.  In the broadest sense, CRM is a system of record for what your customers and prospects are doing.

On balance, I think Salesforce has tee’d up a potential game changer for the SaaS platform world.  Whether or not ISV’s get comfortable with the Swiss angle, Corporate IT should find a lot to like here from the get-go.  VMForce also seems like a rich opportunity for the Salesforce ecosystem of SI’s and VAR’s to add value too.  Salesforce has listened and learned and seems to be on the right track.  I don’t see it as an Amazon killer, but rather as a welcome new addition to the Clouds that’s going to enable new things we haven’t seen before.

Two thumbs up for now and let’s see how things develop.

(Cross-posted @ SmoothSpan Blog)

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Enterprise Irregulars is sponsored by Salesforce.com and Workday.

I must confess that Salesforce.com has surprised me today with the launch of VMforce.com — and in a good way. For a while, I’ve been thinking that open source platforms were the chink in the armor of proprietary PaaS providers. Little did I imagine that Salesforce.com, creator of the archetypal proprietary cloud platform, would itself seize the initiative and redraw the entire PaaS landscape in the way that it has today. Evidently I’ve underestimated the resourcefulness of the company and the imagination of its VP product management, my good friend and fellow Enterprise Irregular Anshu Sharma, who has been responsible for bringing VMforce.com to fruition. [More disclosure: Salesforce.com is a recent client but we have no projects under way at present].

To really understand the full extent of what Salesforce.com has done today, you have to look at how VMware is positioning the announcement. You won’t get the full story from Salesforce.com because an important element is the defeat of its hitherto wholly proprietary Force.com platform strategy — but what a way to snatch mainstream acceptance from the jaws of distrust! Here’s how VMware’s CTO Steve Herrod explains his company’s ‘open PaaS’ strategy:

“One big challenge with today’s PaaS offerings is that they are all fairly unique and incompatible with one another and with the way that enterprises run their applications. Once you select a PaaS offering, it is easy to become locked into their particular offering, unable to easily move your applications and data to another PaaS provider or back into your own datacenter should the need arise … Our initial open PaaS offerings focus on a particularly important choice… choice as to where you deploy and run your applications.”

Seen in that context, VMforce.com is to SpringSource what Heroku is to Ruby on Rails; a high-quality, multi-tenant, operational instance of an open-source platform. These platforms are popular with developers because of the apparent lack of lock-in. In principle, you always have the option of moving to another provider or to an in-house stack. In practice, it may not be so easy; but the principle is what matters. At a stroke, Salesforce.com has opened up its proprietary platform to the mainstream market of an estimated two million Java developers who put their trust in the open-source Spring framework.

The cleverness doesn’t end there, of course. VMforce.com isn’t just an undifferentiated instance of SpringSource. It has a smorgasbord of useful platform resources that massively short-cut the development effort when building PaaS applications; from data to social media, from identity management to application administration, from search and reporting to mobile device support. Every one of these conveniences is another tendril that binds an implementation to Salesforce.com’s operational platform, each one a further line of essential life support that increases the complexity and risk should you ever at any time dare to contemplate moving off VMforce.com to some other platform.

Back in January, I wrote about the somewhat surprising alliance between Microsoft Azure and the Intuit Partner Platform. That tie-up highlighted the huge importance in cloud platforms of service delivery capabilities:

“… a platform’s support for all the components that go with the as-a-service business model, including provisioning, pay-as-you-go pricing and billing, service level monitoring and so on. Conventional software platforms have no conception of these types of capability but they’re absolutely fundamental to delivering cloud services and SaaS applications.”

IPP (which as I mentioned at the time, funded the research for an analyst report I wrote last October, Redefining software platforms), brings a raft of services to Azure that are especially useful to Microsoft’s partner channel. VMforce.com infuses SpringSource with a set of services that meets the needs of enterprise computing environments. This is a landmark event because it fuses the enterprise credibility of the two platforms — the conventional software platform of Java and the operational PaaS infrastructure of Force.com.

Just as PaaS redefines software platforms (for reasons that are explained in more detail in my analyst report and subsequent blog post), so VMforce.com now redefines the PaaS landscape — and heralds a huge shift in Salesforce.com’s own PaaS strategy. It’s no longer about battles between closed proprietary platforms. The battle now moves to two new fronts: between competing open source platforms to establish which of them become the mainstream cloud platform stacks; and between competing operational providers to define the dominant infrastructure frameworks. What impresses me most about today’s announcements is that I had thought those battles would leave Salesforce.com at a disadvantage. Instead, the vendor has pre-empted the potential threat and seized the initiative to map out the lines of battle, bypassing most of its competitors, who are still arming themselves to fight a war that’s no longer relevant.

(Cross-posted @ Software as Services)

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Enterprise Irregulars is sponsored by Salesforce.com and Workday.

The new thing is that force.com now supports an additional runtime, in addition to Apex. That new runtime uses the Java language, with the constraint that it is used via the Spring framework. Which is familiar territory to many developers. That’s it. That’s the VMforce announcement for all practical purposes from a user’s perspective.
–William Vambenepe, Cloud Philosopher-at-Large, Oracle

Later this year, Salesforce will have an additional, more pure-Java friendly way to deliver applications in their cloud. The details of pricing and packaging are to be ironed out and announced later, so there’s no accounting for that. Presumably, it will be cheap-ish, esp. compared to some list price WebSphere install run on-prem with high-end hardware, storage, networking, and death-by-nines ITSM.

For developers, etc.

The key attributes from developers are the ability to use Java instead of Salesforce’s custom APEX language, access to Salesforce’s services, and easier integration and access to the Salesforce customer base.

Spring

Partnering with VMWare to use Spring is an excellent move. It brings in not only the Spring Framework, but the use of Tomcat and one of the strongest actors in the Java world at the moment. There’s still a feel of proprietariness, less than “pure” Java to the platform in the same way that Google AppEngine doesn’t feel exactly the same as an anything goes Java Virtual Machine. You can’t bring your own database, for example, and one wonders what other kinds of restrictions there would be with respect to brining any Java library you wanted – like a Java based database, web server, etc. But, we soothe our tinkering inner-gnome that, perhaps, there are trade-offs to be made, and they may be worth it.

(Indeed, in my recent talks on cloud computing for developers I try to suggest that the simplicity a PaaS brings might be worth it if it speeds up development, allowing you to deliver features more frequently and with less ongoing admin hassle to your users.)

Tools, finishing them out

The attention given to the development tool-chain is impressive and should be a good reference point for others in this area. Heroku is increasingly heralded as a good way of doing cloud development, and key to their setup is a tight integration – like, really tight – between development, deployment, and production. The Heroku way (seems to) shoot simplicity through all that, which makes looks to make it possible. The “dev/ops” shift is a big one to make – like from going to Waterfall to Agile – but so far signs show that it’s not just cowboy-coder-crap.

Throw in some VMforce integration with github and jam in some SaaS helpdesk (hello, Salesforce!), configuration management, and cloud-based dev/test labs…and you’re starting to warm the place up, addressing the “85 percent of [IT] budget just keeping the lights on” that Salesforce’s Anshu Sharma wags a finger at.

PaaS as a plugin framework, keeping partners alive

“In theory what it means for Java developers is that there’s sort of a ready marketplace community for them to develop their applications,” said RedMonk analyst Michael Cote. “Because there is that tighter integration between the Salesforce application and ecosystem, it kind of helps accelerate the market for these [applications].”

Many PaaSes are shaking out to be the new way to write plugins for an existing, large install-base. Of course, Salesfoce will protect its core revenue stream, and without any anti-trust action against Apple, the sky’s the limit when it comes to using fine print to compete on your own platform by shutting out “plugins” (or “apps”) you see as too competitive. That’s always a risk for a PaaS users, but I suspect a manageable one here and in many cases.

Intuit’s Partner Platform is another example of PaaS-as-Plugin, and I think such setups are good all around. As with the Apple App Store, the owner of the PaaS takes a cut, fee, or both, to give developers access to the ready-to-buy channel of users. Microsoft’s platform, Azure, doesn’t seem to fit this mold, but you can see where folks like IBM would take their Live product lines (Lotus and Tivoli) and slap PaaSes on the backend to build out partnering ecosystems.

There’s your “cloud destroys the partner ecosystem” problem solved. Partners just have to learn new tricks, but that’s always been the case.

Arms-dealers…

(Read the full article @ Coté's People Over Process)

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Enterprise Irregulars is sponsored by Salesforce.com and Workday.

Dreamforce, Salesforce.com’s annual user meeting and thought leadership confab, is two weeks away and the anticipation for this event is palpable.  In a tough economy people are looking for the company to do some magic and lift our spirits.

The company did a smart thing by turning on its new collaboration product, Chatter, for any attendee wanting to communicate, synch or share an idea.  The result is a Facebook-like storm on Chatter about Dreamforce.  In the process, thousands of people who had no familiarity with Chatter are educating themselves.

It’s a no brainer to me that the Chatter coverage coming out of Dreamforce will be a bit better for all of the familiarizing.  This is quite different from how we all came out of Dreamforce (was it just last year?) when the company introduced the idea.  The problem was that the description had to be done in terms that many people were not expert in.  What a difference a year can make.

Dreamforce has taken on an aspect of secular saturnalia with quasi-religious undertones as people comment that it’s late this year, as if they were describing Easter.  And it is late, so late that the December date will do little to help any exhibitor finish the quarter well but it may prove to be a good injection of enthusiasm for the year ahead.

Unlike Easter though, which is calculated by a lunar calendar, Dreamforce is calculated according to the Moscone Center.  I suppose you could contemplate a Dreamforce in New Orleans, Orlando, Chicago or Las Vegas, but salesforce.com has such a strong tie to San Francisco, that it’s doubtful it would ever move the event.  So the wait for space on the Moscone calendar is what determines when Dreamforce starts.

Like the company that sponsors it, Dreamforce is many things and it morphs from year to year as products roll out and company marketing plans and market demand changes.  Salesforce has been careful over the years not to simply extend its CRM product line but to add new lines of business.  Dreamforce reflects this and consequently it will resemble multiple events rolled into one.  Just as Oracle Open World has major tracks for its applications, database, Java and Sun for instance, Salesforce will feature tracks for CRM, its social technologies — especially Chatter, its platform and its development tools.

The Salesforce product line has spread out so much that two people could easily go to Dreamforce and see two completely different events—especially if one of them is a developer who gets sucked into all of the sessions about the platform and its related parts.  And it’s assumed there will be more parts to talk about once the show starts.

I expect important announcements in most areas.  CRM is perhaps the most mature part of the company’s offerings in what has become a mature market but the introduction of the Sales Cloud and Service Cloud combined with the re-think of the associated business processes will provide opportunity for many new ideas.

Chatter offers a fresh perspective on collaboration and I hope there will be more discussion about how to use it effectively than about how to implement it.  From what I’ve seen implementation amounts to turning it on.  It’s like calling people to Thanksgiving dinner, you don’t really need to teach the how to eat.  So stories from some of the sixty thousand companies now using Chatter is all that’s needed.

Then there’s the platform.  In the last two years the rest of the vendor community has played catch up with Salesforce in cloud computing.  Everyone has a flavor of it today and most vendors straddle the fence offering single and multi-tenant implementations that deliver on the literal interpretation of SaaS but leave the benefits of multi-tenancy to discretion.

Perhaps that’s as it should be, we can’t expect a wholesale change to multi-tenancy over night for two important reasons.  First, many customers can’t or won’t contemplate the idea and second, many vendors can’t contemplate the business model change.  For them, multi-tenancy will happen in about ten years, the next time they discover that their cloud computing paradigm didn’t really protect them from obsolescence.

But back to the platform.  Salesforce has always had a lead over traditional vendors that varied in length but was always centered on its platform.  There have been important platform innovations in the last year or so including the VMforce effort but I think it’s time for something else.  So it might be that the biggest new product announcement will be in the platform area.  That would make sense because it would give the company time to consolidate its Chatter rollout on the application side of the business.

Other things to think about for Dreamforce: Bill Clinton and Stevie Wonder.  There’s no moss growing on Bill Clinton.  Since leaving the Whitehouse he’s been a tireless worker for humanitarian causes and his keynote, “Embracing our Common Humanity” is eagerly anticipated.  Then there is the incomparable Stevie Wonder who will bring his hefty songbook to Dreamforce.  To me, there is no one in modern music who combines the musicianship and lyrical dexterity of this man and I predict there will be dancing in the aisles.

So that’s what I think about Dreamforce going in.  I will post more comments from the event and hope to get some pics to share as well.  Meanwhile, have a great Turkey Day and Go Patriots!

(Cross-posted @ Beagle Research, LLC.)

Anticipating Dreamforce is copyrighted by Denis Pombriant. If you are reading this outside your feed reader, you are likely witnessing illegal content theft.

Enterprise Irregulars is sponsored by Salesforce.com and Workday.

All the chatter about the Salesforce acquisition of Radian6 is quite interesting.  A couple of postings from people I respect make good points.  First Joe Payne, CEO of Eloqua:

“Conspicuously absent from Salesforce’s network of role-specific “Clouds” is one that centers on the marketing function.  Is the Radian6 acquisition the beginning of a Salesforce Marketing Cloud?  Someone on the investor conference call asked Marc Benioff whether this was the first move toward business-to-consumer.  His answer was worth noting: ‘We’re really seeing the beginning here of the Marketing Cloud.’ Given the excitement we have seen around Revenue Performance Management – a discipline that requires both sales and marketing data – in the executive suite, it is not surprising to see Salesforce moving this direction.

And here’s Jon Miller CMO of Marketo:

“Personally, I think Salesforce will continue to make acquisitions “around” the marketing automation space (such as Jigsaw and Radian6) without moving directly into the category; I also would not be surprised if they bought an email service provider.  Salesforce has never shown much interest in a “Marketing Cloud;” they seem more interested in Chatter, the Force.com Platform, and Service Cloud 3, and I suspect future acquisitions will focus on augmenting those capabilities more than in marketing.

It reminds me of the old joke, if you want three economic opinions ask two economists.  We’ll need to wait a while to know which is right but I’m betting on Payne’s analysis more or less.

IMHO Salesforce has been deficient in marketing for a long time.  Perhaps that’s because marketing’s business processes have been more amorphous compared to sales and service.  But more likely, it was because Salesforce grew up selling to emerging tech companies that were selling new category products.  Your marketing needs in such a situation are rather minimal.  But today, there is much less category formation going on — that will likely change with the introduction of the tablet PC— but for now, companies wanting to sell, and who doesn’t, need to market like many of them never have.

Marketing and customer intimacy have driven the social CRM market for several years and the demand destruction caused by the financial meltdown a couple of years ago tipped the scale.  That’s why ideas like revenue performance management are so important today and in order to do RPM you need tools.  So it’s not surprising that Salesforce bought Radian6.  It was time.

(Cross-posted @ Beagle Research, LLC.)

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Enterprise Irregulars is sponsored by Salesforce.com and Workday.

Dreamforce 2011

It’s worthwhile to consider the economic consequences of Dreamforce — the products announced as well as the cultural issues it raised.  Now, I am not an economist and I encourage you to think about that and maybe not read this if that matters.

Many people might look at the news coming out of San Francisco and try to calculate the ROI on one or another introduction or announcement but I think that’s like looking through the wrong end of the telescope.  ROI is a financial measure and when I think about economics, especially marco economics, I am trying to figure out how the changes affect the ways we work and make money now and especially in the future.  Let’s take a look a just a few ideas.

DRO

Salesforce announced an option (Database Residency Option) aimed at letting companies store their data on their own devices rather than in the cloud.  I’ve already written that this approach will be welcomed by companies and government entities that can’t for regulatory or policy reasons, let their data reside on a cloud infrastructure.  There are many organizations in that position and this should be a boon to their approaches to IT but also a boon to Salesforce’s business.

About the only folks who might be adversely affected will be other vendors.  Companies like Microsoft and Oracle have made a big deal of offering architectures that run in any mode including on-line, on-prem and hybrid implementations.  They’ve taken this to market and used it as a differentiator with Salesforce but that’s rapidly fading in importance, in part I believe, because these solutions preserve single tenancy for applications.

True enough, the other vendors can claim that companies can still own their source code and to be able to manipulate it at their whim while Salesforce still holds the code and is totally responsible for managing it.  Of course customer developed code might be stored in the cloud but Salesforce will not be editing it.  Just backing it up and acting as a custodian.

Which is better?  I like the idea that Salesforce will continually upgrade its code and make sure that its updates do nothing to corrupt my code.  In my humble opinion VRO is a net positive.  Sure it goes against the Salesforce religion but it gives customers what they want and does not compromise the applications.

The Social Enterprise

Salesforce did a good job of defining what is most important — the social enterprise.  This is not a new buzz word or a new shiny object.  In incremental steps over the last three years the company has been defining social business, building products to support it and training the early adopters.

There is a lot of heavy lifting left to do here and the world outside of Dreamforce is not always welcoming.  At a press conference on Thursday, Marc told an interesting story about this reality.  He said that he speaks with CIOs and other C-suite people all the time and on one occasion recently — a conference, I think —he showed a CIO Chatter.  When the CIO saw the stream his first question was, “So now the person receiving all this has to answer it?”  The answer was not, shall we say, appreciated and with that the CIO said this isn’t for me.  Net/net there’s still a lot of proselytizing to be done and a lot of reticence to be over come.  Last week I mentioned some research just out of Cornell that examines why we like creative ideas but shy away from creativity, check it out here xxx.

The Social Customer

There are many manifestations of the social customer.  It can be someone who renders an opinion on a product or service, someone who lends a hand to help out someone with a question or an issue and it’s someone who values privacy.  I was struck in watching Marc’s conversation with Eric Schmidt of Google, of how many times Schmidt in describing a social interaction, used words like, “With the user’s permission”.

One question from a British reporter at the same press conference had to do with not wanting a socialized customer service person to see everything a customer might have recently posted on social media.  Some things while social are still reserved for the intimates of the poster.  That’s a fair point and one that right now gets the very unsatisfactory answer of, well if you don’t want the world to see it, don’t post it.  That’s hardly comforting to many people but I think the issue won’t be solved with more technology.  I think it will be an issue of professionalism.  We forget that in addition to building out a new technology infrastructure that we’re also building the rules of the road and this might be an example of where smart use of the technology trumps more technology.

This will likely be a touchy topic for some time and the sensitivity will be different from culture to culture and country to country.  As an economic issue privacy might be the biggest roadblock to mass adoption and my advice to anyone listening would be to never take it for granted and to continue being as explicit as Schmidt.

Heroku, Ruby and developers

One of the areas that gets almost no coverage is what all this means for developers and as it turns out there was a lot at Dreamforce for them.  Salesforce is on a path that delivers tools for three major kinds of development — business applications, websites and I don’t know what to call it, web resident apps.  Schmidt was emphatic about the need for the modern company to be able to develop quickly and iterate toward perfection while enabling users to get at products quickly.

For business applications there’s the Force.com platform with a choice of Java and Apex, the company’s proprietary language that basically fills in declaratively where point, click, drag and drop don’t do enough.  Then there’s the company’s website builder.  You can build a website integrated with your Salesforce instance using your data.  This capability is most useful for building customer facing apps that capture customer data and interact directly with them.  So a registration page is the obvious example.

Finally, Salesforce spent a lot of cash buying Heroku which is a development environment that uses Ruby on Rails and several other languages like Java, to build applications that are intended to live on the web perhaps at other sites.  A great example of this is Facebook integrated applications.  Some people are referring to F-commerce meaning commerce apps on Facebook and that’s very exciting.  Heroku is a go to choice for building applications that run well and scale massively for the Web.  In a demo we saw an application built by NBC to promote Warner Borothers’ new Harry Potter movie.

Obviously, this illustrates the idea that Heroku might be a good choice for this kind of app but even more importantly, it shows us that we probably don’t know how all of this technology and infrastructure will be adopted and consumed in the years ahead.  That’s what makes Dreamforce so interesting and the ideas unveiled there so powerful.

I am glad I dodged a hurricane to get to Dreamforce.  I lost my voice but recovered and saw a lot of cool people.  It’s going to give me something to write about for a while.

(Cross-posted @ Beagle Research, LLC.)

Some Economic Consequences of Dreamforce is copyrighted by Denis Pombriant. If you are reading this outside your feed reader, you are likely witnessing illegal content theft.

Enterprise Irregulars is sponsored by Salesforce.com and Workday.

Because studentforce is 100% declarative any changes to the force.com platform are changes to studentforce.

(Cross-posted @ Beagle Research, LLC.)

Rypple Scores One for the Force.com Platform is copyrighted by Denis Pombriant. If you are reading this outside your feed reader, you are likely witnessing illegal content theft.

Enterprise Irregulars is sponsored by Salesforce.com and Workday.

The Next (and Hugely Important) Frontier

Many, many years ago, on a very snowy day in New York City, I sat in on a Merrill Lynch investor conference. Marc Benioff of salesforce.com was one of the technology CEO speakers that day. As Marc spoke, it dawned on me that salesforce.com was not going to be a giant application software vendor. Instead, salesforce.com was angling to become a platform player first and foremost.

In that moment, I realized a fundamental change was occurring in the application software marketplace. But, I wondered if other vendors would also see this and act in a manner similar to salesforce.com? The uptake of platform technology has been slow among application software vendors until recent years. There is currently an arms race underway inside software companies today with each trying to build its own cloud platform stack. Unfortunately, too many firms may be too late in the development of their platform technology and worse, may have missed the boat altogether in developing a vibrant platform ecosystem.

Within the ERP space, platform-as-a-service (PaaS) technology is something that salesforce.com and NetSuite have developed, promoted and used to attract developers. The force.com architecture of salesforce.com may currently be one of the largest business PaaS ecosystems today.

Over the last many months I have quizzed a number of ERP, HR and other vendors regarding their platform-as-a-service offerings. In summary, what I have learned is that:

• there are a number of application software products that utilize Microsoft technology as its basis for its original (SOA and then cloud) platform
• some vendors believe that continued enhancement of these SOA platforms may require rewriting much of the their solutions
• vendor after vendor are rolling their own PaaS environment utilizing combinations of open source and commercial software technologies from both large and small providers
• vendors and vendor management see the development of a PaaS as a technical challenge that will deliver benefits for their customers. They are not fully aware of nor understand the ramifications that a PaaS ecosystem will bring to their firm and their customer base

A few days ago, I sat down with Phil Simon. Phil has a new book out called, “The Age of the Platform“. This book focuses on four major technology platforms: Apple, Amazon, Google and Facebook. In the hour and a half Phil and I spent at lunch, I was astounded at how deeply each of us understood the platform space but also recognized how each of us has come to different understandings around platforms based on our coverage areas. I care mostly about how platforms will be developed within the application software space while Phil’s closes the gap with many more examples in the consumer technology space.

That lunch was a particularly important one as the lessons that have developed in the platforms of Phil’s big four (Amazon, Google, Facebook and Apple) will doubtlessly come back to apply to PaaS developers in the ERP and other application spaces. And possibly, the most important lesson that warrants focus today is this: there will not be an infinite number of successful platform ecosystems and many of the platform development efforts of ERP vendors today will not deliver big benefits.

State of ERP PaaS and PaaS ecosystems

SOA (service oriented architecture) has been a significant focus area of ERP and other application software vendors for the last decade or so. These architectures compartmentalized many common “services” such as user interface presentation, database access services, mobile device interaction, etc. By isolating specific services, large portions of code would remain unaffected by changes in one of the component service areas. SOA made application software easier to adjust to the evermore changing world full of cell phones, social networks, etc.

But, SOA was not necessarily designed for concepts such as multitenancy — the critical capability found in the best software-as-a-service (SaaS) applications. Indeed, SOA was conceived in a time before distinctions such as single or multi-tenancy were commonplace. SOA was good but it did not possess the completeness, tools or ecosystem capabilities found in some of the PaaS environments of today.

The Force.com platform, for example, now contains development tools, cloud database technologies, code development tools and more. The VMForce offering possesses much more. It is an architecture that enables the citizen developer world where anyone with a live Internet connection and a computing device can build sophisticated Web applications on their own. That platform allows one, two or three person development teams (and larger) anywhere in the world the ability to build complex, powerful business applications. These programmers do not need to acquire expensive licenses for databases and other systems management tools. These programmers do not need to purchase computing hardware such as servers, routers and other devices. No, these developers need only an Internet connection to become commercial software firms.

It is the ease of use with which individuals can use platforms like force.com and iOS from Apple that both transforms the software industry and also the nature of the companies propelling these platform ecosystems. The size of the Apple iOS ecosystem is staggering when one sees the number of applications developed and the number of developers within the community. But more important is the fact that Apple has begun to build a separate marketplace for business applications created through this platform. Understand this, neither Apple, NetSuite, Salesforce.com nor are other vendors interested in just building a platform. No, they want to build an ecosystem and they want to do it badly.

So what’s the big deal?

The big deal is the ecosystem – that’s what’s really BIG. It’s not the applications a vendor has, it is the ecosystem around them. It is in the ecosystem where:

• hundreds of thousands of developers build extensions to the software vendor’s applications
• other software firms build complementary, robust applications that run on the same platform as the vendor’s applications
• users of the ecosystem can share their experiences, ratings and other feedback about the multitude of products available in the ecosystem
• channel partners flock to the ecosystem because they see a way to develop unique intellectual property and collect royalties on the usage of it thousands of times
• people, firms (large and small), partners and customers can monetize their intellectual property and product extensions
• providers of third-party data, analytical algorithms and other non-software types of intellectual property can find new users for their thoughtful works

The ecosystem is about money. A PaaS ecosystem extends the value opportunity by placing functionally rich, possibly low cost, vertically relevant extensions and new modules within the reach of all ecosystem users. Many of those extensions, modules, etc. come with price tags. The revenue from those solutions represents an income stream to their creators.

Let’s not forget that the ecosystem has significant benefits to the vendor creating this environment. Apple, Amazon, salesforce.com, etc. are not creating these ecosystems and their technical environments for altruistic and non-economic reasons. They are collecting toll charges for usage, transaction fees and other events. These ecosystems make money for the provider. In some cases, they make the providers a lot of money.

Why power is so key to this part of the ERP world

The PaaS ecosystem creates a virtuous cycle for its creator and its participants. PaaS ecosystems represent the epitome in virtuous cycle environments. When one ERP vendor decides to create another version of its product utilizing the platform tools found in another company’s ecosystem, they create an opportunity to cross sell into the install base of every other software firm was built products for that ecosystem, too.

When Coda created FinancialForce.com under the Force.com platform, it quickly found a ready made market available to it. Thousands of salesforce.com customers were now potential subscribers to the FinancialForce financial accounting software products. Likewise, third parties that have built applications on the NS-BOS architecture of NetSuite have found that platform and its ecosystem to be a built-in channel for their products.

SAP’s Business ByDesign, a multitenant ERP solution for the midmarket, does not possess a full PaaS yet but does offer a SDK (solution development kit) that permits third parties to build a number of complementary capabilities and extensions to the product line. SAP has tried to bring some measure of supporting ecosystem capabilities to its channel partner network. This is a product line that is moving towards the support of an ecosystem and at least has made a number of moves in that direction.

The virtuous cycle occurs when momentum builds around the ecosystem. The more developers the ecosystem can attract, then:

• the more products will be created,
• which entices more customers to the ecosystem,
• which triggers more customers to buy from the software developer and other developers in the ecosystem,
• which fuels more development,
• which attracts still more customers,
• etc.

In contrast, a platform that does not create momentum does not create an ecosystem. It is clear in conversations with technology leaders in some ERP firms, that their PaaS efforts will remain largely an internal tool set or one that will be highly restricted to all but a few outside entities. These limited, closed ecosystems may not prove to be sustainable or will suffer from low market uptake.

The ecosystem is about power. Power is not the same as control. Market power and mind share are what the PaaS ecosystem builders are seeking. Yes, they will build customer pleasing application software. But, they are more interested in building the destination for the largest possible universe of customers to come to.

In the minds of these forward-looking, ecosystem building ERP vendors, they are creating some solid, yeoman products but will leave many of the millions of potential enhancement requests in the hands of volunteers, third-party integrators, independent software developers, etc. that participate in the ecosystem. It’s absolutely brilliant this approach as it transfers significant amounts of R&D costs that the application software vendor would have incurred to members of the ecosystem. And, while others are doing the development work, the software vendor is selling even greater amounts of their basic core product at ridiculously solid margins.

The smart ERP play today may be to focus one’s R&D efforts on building out platform capabilities instead of only focusing on application functionality. The purpose of this is to create a technology platform that will enable record MARKET power for the ERP vendor.

Market power is what causes an application software vendor to be considered automatically in any software evaluation decision. In the past, any large enterprise would have automatically considered SAP, Oracle and possibly other vendors in an ERP selection. These are companies that are well-known in their space and are considered by prospective buyers whether the prospect has been actively marketed to by these vendors. Lesser-known vendors have a more difficult process of getting the attention of and staying in contention for this business because of the lack of market awareness and market power of the brand these vendors possess.

What is happening now is that market power is shifting to the vendors with the largest ecosystems not to the vendors with the largest installed bases. The distinction is critical and will represent a fundamental shift in buying habits of ERP software purchasers. To ignore the shift in where market power is moving is to do so at one’s peril.

The power vs. control issue will be a big discussion item in the executive suites of ERP firms. Some vendors will have a tough time transitioning from bring control mavens to facilitators of great ecosystems. These firms believe that:

• only they can do product development to the ERP product
• only they can create new functional applications
• only they can implement the software
• only they should determine who will be a partner
• only they can own the customer relationship
• only they …. (well, you get the point)

Controlling most aspects of an ERP firm may give one a sense of security. But, in the world of PaaS and PaaS ecosystems, it will be a false sense of security. Letting go will need to become a core competency of the modern ERP firm. Students of the human psyche (and change management) know this will be a tough road for some firms.

Why these ecosystems are SO important

Why is a PaaS ecosystem so important, especially to ERP and other application software firms?

Application software buyers continue to evolve, learn and refine their shopping skills and business needs. They are, often by virtue of the effort they put into these deals, quite savvy and up-to-date. They know the score and they reward the vendors with the most appropriate, most current products.

A few years back, customers were looking at on-premise apps. Then, they started to consider cloud application software. Whether it was called SaaS (software-as-a-service) or cloud, they looked at and started to buy cloud solutions for office automation (e.g., Google Apps, Zoho, Microsoft Office 365), HR (e.g., Workday, Taleo, Silkroad) and CRM (e.g., Salesforce). Some even found business specific solutions in the cloud (e.g., Plex Online and Rootstock for Manufacturing).The move to cloud was on its way.

But in the rapidly evolving cloud world, future waves of buyers started to find lots of cloud choices. So, these buyers do what all rational, logical buyers do – they got smarter and refined their solution choices. Today’s SaaS (software-as-a-service) cloud apps buyer knows they want a SaaS product. With so many out there (and more to come), they need a way to differentiate these. So, these buyers thin the herd a bit and look at only multi-tenant SaaS applications. And, sometimes, that means they need another differentiator. They look at vendors with a PaaS (platform-as-a-service).Today, the truly discerning buyers will also want to look at apps with a PaaS and a vibrant ecosystem to go along with it.

Competition in the application space will require vendors continue to innovate and improve their value proposition. Logical buyers will seek the products that offer the best value for them. It’s simple economics and market dynamics.

The PaaS ecosystem will become important to vendors and not just to software buyers. To vendors, the ecosystem will become a major differentiator for a few vendors that can build one out and get wide market adoption of their platform. For other vendors, their participation in someone else’s ecosystem means that they can take advantage of other firms’ selling and distribution efforts. These ecosystems are full of integrators, product enhancers, resellers, add-on product builders, other major software firms, vertical solutions and more. When someone in these other firms makes a sale, it increases the probability that they will also trigger sales for other members in the ecosystem, too.

But the ecosystem is really important as it can fuel non-linear growth. When a traditional software vendor wants to grow, growth often occurs at a linear rate. This is because the company cannot develop new products beyond what its cash flow can support. R&D takes money and limited R&D funds artificially constrain how quickly the company creates new products. Moreover, the company can only grow other functions, like Sales, based on its available cash. SaaS companies really feel the cash constraint as they don’t get those huge upfront license fees. Many firms are instead getting monthly usage payments. Their cash comes in lots of smaller dosages over time.

In an ecosystem world, a software vendor can use the scale of others in the ecosystem. Third parties will recommend and may even implement a vendor’s products. The vendor doesn’t even need to sell these products. They can scale without pain. Likewise, they can start selling products while others round out the apps for them. The best PaaS technical environments permit users and third parties to create and reuse product extensions and enhancements. The advantage to a software firm is that they don’t have to do all of their product’s R&D work. They can rely on the ecosystem participants to build out additional vertical and horizontal capabilities. In the PaaS ecosystem world, Sales can scale big-time without making massive and time-intensive investments in people, Sales, Marketing and R&D.

“Does every ERP application vendor need to have its own PaaS ecosystem?” – No. Besides the market won’t tolerate more than a few successful ones anyway. Instead, vendors may want to look at which ecosystem(s) they will play in. RootStock already co-exists in both the NetSuite and Force.com ecosystems.

“Is there risk with being part of another firm’s ecosystem?” – Yes. The PaaS ecosystem creator has a vested interest in growing the ecosystem. They won’t give any third party applications firm an exclusive as this limits the growth of the ecosystem. Some PaaS creators may even want to develop their own products to supplant those of its early ecosystem participants. For this reason, your apps firm must insist on seeing the product road map of the ecosystem creator before committing to this space.

Why PaaS, ERP and ecosystems need planks

Phil Simon (author of “The Age of the Platform“) sees the platform and its ecosystem as two conjoined entities. I get the logic behind his combination of these two, but I have chosen to keep the two concepts separated in the ERP space as it is clear to me that too few vendors see them as one combined goal.

To these vendors, a platform is a collection of technologies. An ecosystem is something they will worry about “someday“. Phil believes a platform is “an extremely viable and powerful ecosystem that quickly scales, morphs, and incorporates new features (called planks in this book), users, customers, vendors and partners.” He adds, “the most vibrant platforms embrace third-party collaboration. The companies behind these platforms seek to foster symbiotic and mutually beneficial relationships with users, customers, partners, vendors, developers, and the community at large.”

The planks that Phil discusses are needed to create large, vibrant platform ecosystems for the ERP space. I believe the planks that ERP vendors should include capabilities such as:

• Application marketplace/monetization engine/
• Payment processing/currency
• Personalization/tailoring
• Channel partner built apps
• Customer extensions
• Reviews/ratings
• Development tools
• Social tools
• Mobile tools
• Analytic tools
• Big data services
• Search
• Place technology (maps, RFID, etc.)
• Collaboration tools
• Context sensitive content
• Security
• Industrialized compute power (or peak computing power)
• Third party data/content
• Benchmarks
• Etc.

When I meet with ERP vendor executives, I often hear them rattle off portions of the list above. However, what is so telling is how they intend to utilize these capabilities. For many of the technologies, like mobile applications, they see these technologies as being something that will be part of the core part of their product and not something that will be utilized by a third party. Likewise, mechanisms to create a way to publicize and monetize third-party products are way down the priority list for the vendor. In fact, the development efforts have a eerily familiar ring to them from vendor to vendor. The initial platform efforts are designed around extending the original SOA model with ecosystem enhancements well out into the future of the product map.

What is (or will be) a good ERP PaaS ecosystem?

Remember, in technology, the best solution isn’t always the market leading solution. The same may be true for PaaS ecosystems, too. There probably won’t be a single “industry standard” for PaaS ecosystems. However, I am willing to bet that the market leaders will undoubtedly introduce products that possess:

• Easy to use tools and applications
• Citizen programmer speed and simplicity
• Low capital requirements to use
• Low barriers to entry
• Fair (not necessarily cheap) economics
• Some policing of the membership and solutions offered
• Support
• High velocity growth
• Lots of user content, reviews, rankings, ratings, interaction
• A reason for users to treat this as a destination

Furthermore, the new market leaders will be ones that:

• move quickly in creating their ecosystems
• shift from thinking entirely in terms of applications and application functionality and develop a mindset and finesse around creating an ecosystem
• fuel the virtuous cycle around their ecosystems to create market power and market momentum
• learn from non-ERP ecosystem pioneers like Apple and Facebook

What should ERP apps vendors do now? It’s a lot. Every ERP executuve committee should be pondering the following now: 

• Should we go with NetSuite’s, salesforce.com’s or another PaaS? or should we roll our own?
• Is it too late to roll our own PaaS?
• Are we prepared for the culture and other changes that PaaS and PaaS ecosystems will place on our software firm? Issues such as:
  • Sales compensation issues (e.g., who gets the commission when a channel partner sells your product?)
  • Channel conflict
  • Non-linear growth
  • Can we make channel ecosystem developement a core competency?
  • Do we need a new business model?
  • Do we understand the new economics in an ecosystem world?
  • How much hyper-growth can our cash support?
  • Can we get more revenue from royalties, tolls and commissions than from original app licenses/subscriptions
  • Have we done enough planning to scale well?
• Are we prepared to transform not just evolve?
• Can we make Marketing (especially into all new areas and to channel ecosystem constituents) a new core competency?
• Do we know how to recruit an all new kind of channel partner? (How does an old school ERP vendor recruit a 2-3 person code developer groups in Malaysia to create apps for their ecosystem? How do they even find them?)
• Are we ready to really understand how customers will use the ecosystem?  If you don’t really know much about how they use your apps today, how will you get this right?
• And, finally, are you ready to focus on customers to come – not just the existing ones?

The Platform age is upon the ERP space. How these vendors fare depends on how well they adapt. This should be interesting….

(Cross-posted @ Software & Services Safari Blog RSS | ZDNet)

PaaS Ecosystems & ERP: The Next (and Hugely Important) Frontier is copyrighted by Brian Sommer. If you are reading this outside your feed reader, you are likely witnessing illegal content theft.

Enterprise Irregulars is sponsored by Salesforce.com and Workday.

The arc of nCino’s brief existence provides a good description of the power of application development on the Force.com platform.  nCino (“Encino” roughly translates from Spanish as “live oak”),  supports commercial loan origination, including CRM functionality to manage the sales process and document management to handle all of the details.  The product was originally developed within a conventional bank, Live Oak Bank in Wilmington, NC.

To say that Live Oak Bank is conventional is not to imply that it is ordinary.  It is the third largest originator of business loans in the U.S. despite being significantly smaller than its competitors.  With the banking industry in a slump Live Oak could not compete as a low cost provider because borrowing activity was slack and interest rates were at low points.  So the bank decided to innovate and  to compete on business execution.

Anyone who has paid attention to banking issues during the recession has probably realized that banks had not been keeping up with managing documentation for example, in home mortgages.  But the same has been true of documentation management in commercial loans and it was the content management part of the process that the bank decided to attend to first.

Live Oak used Force.com to build a commercial loan origination system that could take better care of loan documentation and better attend to the customer relationship issues that attend any loan sale.  But the story doesn’t stop there.

When Live Oak showed off its new system at Dreamforce 2011 the bank discovered significant demand from other banks at the show.  But not wanting to go into the software business, Live Oak spun off its software to a new company —nCino that is the subject of this piece.

By taking care of all loan origination documents within its Salesforce CRM instance, nCino has developed an origination process that is streamlined and effective.  The company’s initial data shows that it can cut twenty five percent of the loan origination cycle time and put money into the hands of the business borrower faster than its competition thus providing a unique form of competitive differentiation.

But operational efficiencies are not the only thing that many bankers are seeking out these days.  The financial crisis exposed the document handling capabilities of many banks as unreliable costing many of them lost time, revenues and legal fees.  Industry data shows that as much as thirty percent of loan documents are inaccurate.  These deficiencies have consequently driven many banks into the market for better document handling software and loan origination systems.

According to Pierre Naudé CEO of the company, Force.com has enabled his team of 27 people to innovate much faster than other technologies.  After about a year, the company has nine installed customers with five more in process and several more in the pipeline.  The AppExchange continues to be a good source of leads, which might surprise some people because nCino is an enterprise solution.  But Beagle research shows that enterprises shop on the AppExchange just as smaller companies do.

Perhaps another surprise for some people familiar with banking is the nature of the solution.  nCino is a cloud offering like all Salesforce solutions and the banking industry, according to Naudé has accepted it without fanfare.  Naudé says it is because “many banks and credit unions have been using hosted solutions for some time, and there’s no difference between running a hosted solution in some remote data center and running a SaaS solution.”  It helps that Salesforce already has all of the certifications that bankers look for including SOC Types 1, 2, and 3 and that it is PCI (private card issuer) compliant.  nCino relies on these certifications as cornerstones of its business and they simply come along with the Salesforce service.

nCino was started with a loan from Live Oak Bank and it has since raised an A round of funding worth $7.5 million, which Naudé says was oversubscribed.  The company’s roadmap includes delivering a mortgage origination system and retail loan facility later this year but the company does not release information about its roadmap beyond that.

nCino is a great story about what’s possible given the power of the Force.com platform and the AppExchange.  More than this it provides a useful model for the future of enterprise software.

(Cross-posted @ Beagle Research, LLC.)

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(Event note: the traditional Salesforce marketing cycle is to announce a new model/slogan/message at a Dreamforce event, then take the next 1-2 yeas to strengthen the delivery of that message, refining it along the way in Cloudforce or Tour events like this one.  This is what happened with the social enterprise, and what is happening with the customer company.  I still don’t like the concept of the customer company – don’t think i ever will – but, the past few months have been very good for Salesforce corporate communications people and the message I heard here was much better – not there yet, but better.  I trust that by Dreamforce in November we will have a good message… it is just the painful process of having to listen to the iterations that makes it long and tedious.  Oh well, as long as they get it right – no pain, no gain)

Today at their Customer Company Tour in the UK Salesforce (SFDC) announced the launch of communities.  They showed a pretty poor demo on stage, had a follow-up session that did not add much, and the message is still work-in-progress: they talked about different purposes and models (the traditional purposes: answers, ideas, collaboration) and how each applies in different ways.  In my opinion, they missed showcasing in detail how collaborative sales, support communities, and inbound marketing (the three easiest use cases that come to mind) could be improved by the use of communities – but were on the right track.

I would be inclined to say it was a bad launch and that they are behind in the market for communities.  I would probably be mostly right too.  There is little value to what they can do today (very basic communities, just be there and collect content while integrating collaboration streams) and most of it is around external communities that can tie back to other SFDC functions.

However, to do so would be shortsighted — it was not the launch today that is the big news in this case, but the roadmap I saw and the features in it.  A large part of it was under NDA / Safe Harbor (that means they don’t want me to repeat it so they don’t look like they are promising product that could affect their stock price – public company stuff) but I can give you a few hints based on what I see as a next-generation community platform.

I have been saying for a long time that communities are the true value we inherit from the social media craziness we lived the past few years.  I have also been saying that the antiquated model is not right for what we need, and that the new model for communities should include:

• the ability to create communities for specific purposes, and tie those communities to business objects (like creating a new community for a new lead, bring in the people that can help close the deal, then disband that community while retaining the knowledge and value generated)
• the ability to easily add data, system access, people (from inside and outside of the organization), references to other communities, direct links to any content and knowledge produced before, and sufficient tracking and reporting tools to ensure compliance, audits, and other legal issues
• use semantics and natural language understanding to automatically filter content, bring related content and people, and create links to knowledge already existing in other locations (whether communities, knowledge repositories, other systems, or other people anywhere in the world)
• be part of a platform (PaaS, open cloud model of platforms – not a PINO [platform in name only]) that is open, expandable, secure, and easy to integrate into any other system of engagement or system of record with which it can easily exchange data both ways
• contribute all that was learned and known as knowledge to existing knowledge management systems, including the ability to improve existing knowledge without having to create a new entry that would muddle the finding of the right knowledge at the right time

There are other considerations surrounding culture, metrics, and integration – but I would be very happy if I could find these new communities.  This is not, yet, what SFDC has created – but these items (some of them) are part of their roadmap.

And it is that roadmap that excites me the most about their solution (and what I kept telling Lithium for years to develop).  I was not present at the latest event from Lithium, I have limited knowledge of what they are doing other than what was publicly shared and thus cannot comment whether they are going in this direction or not (although I trust they will say they already have it or it is in the planning) and not going to do that.  I know that Jive (also a client) is working on several of those topics in their roadmap and already has others in their solution – and I trust some of the other providers (Telligent, Mzinga) will agree with that as well.

Alas, none of them are SFDC and are able to deliver the solution as part of Force.com (which is slowly becoming a de facto “platform” provider).  This is where it could become big — and please notice we are in the land of the IFs…

IF SFDC can deliver what it promised, and IF it is a platform service that is part of the Force.com platform, and IF they stick to the items we discussed (some of which are referenced above), and IF they are able to showcase by Dreamforce in November — then I think they have a very good chance to become very, very competitive in the communities market.

IF.

I am hopeful, always am.  I am a glass half-full type of person (cue laughter).

I really believe this is possible, and if so I am looking forward to see the Spring 2014 release when (acting under Safe Harbor provisions) they are supposed to have most of what we discussed integrated into their product and showing.

IF.

(Cross-posted @ thinkJar)

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The future of any enterprise software vendor is being decided today in their developer community. Alex William’s insightful thoughts on Salesforce Is A Platform Company. Period. underscores how rapidly Salesforce is maturing as a cloud platform.  And the best measure of that progress can be seen in their developer community. (To be clear, Salesforce and the other companies mentioned in this post are not clients and never have been.  I track this area out of personal interest.)

The last four years I’ve made a point at every Salesforce Dreamforce event to spend the majority of my time in the developer area.  Watching mini hacks going on in the DevZone, mini workshops, the Salesforce Platform and Developer keynotes over the last few years has been a great learning experience.  An added plus: developers are often skeptical and want to see new enhancements help streamline their code, extend its functionality, and push the limits of the Force.com platform. This healthy skepticism has led to needed improvements in the Force.com platform, including a change to governor limits on Application Programmer Interface (APIs) performance and many other enhancements.  Despite the criticisms of Force.com being proprietary due to Apex and SOQL, the crowds at developer forums continue to grow every year. I’ve started to look at the developer area as the crucible or foundry for future apps.  While the Cloud Expo shows how vibrant the partner ecosystem is, the developer area is where tomorrow’s apps are being coded today. The Force.com Workbook, an excellent reference for Force.com developers, was just released October 1 and DeveloperForce shows how far the developer support is matured in Salesforce.  In addition a new Force.com REST API Developer’s Guide is out just last month. The Journey From Application To Platform In visiting the developer area of Dreamforce over the last four years I’ve seen indications that Salesforce is successfully transforming itself into a cloud platform business:

• Significant jump in the quantity and quality of developer attendees from 2010 to 2012.  The depth of questions, sophistication of code samples, calls for more flexibility with governor limits, and better mobile support typified these years.

• Steady improvement to visual design tools, application development environment and support for jQuery, Sencha and Apache Cordova.

• The steady maturation of Salesforce Touch as a mobile development platform and launch of Salesforce Platform Mobile Services.  Launched in 2011, this platform continues to mature, driven by developer’s requirements that reflect their customers’ needs for mobility support.  HTML 5 is supported and the apps I’ve seen written on it are fast, accurate and ideal for customer service.  ServiceMax has created exceptional mobile apps including their comprehensive ServiceMax for iPad app on the Force.com platform.

• 2012: Rise of the Mobile Enterprise Developer.  Salesforce’s enterprise customers in 2009 weren’t nearly as active as they were last year with questions on legacy systems integration and how to create web services capable of integrating customer data.  2011 was a breakout year in mobile app development with 2012 showing strong momentum on mobile web services development.  I expect this year’s Dreamforce developer community to reflect the rapidly growing interest in mobile as well.

How Enterprise Applications Make The Salesforce Platform Work For Them In speaking with Salesforce developers over the years one of my favorite questions continues to be “what is the real payoff of having a native Force.com application in your company?”  Initially I thought this was marketing spin from enterprise software vendors attempting to use features as benefits, however after a closer look it is clear that the platform has significant advantages, especially for any solution requiring global deployments or large numbers of users.  Here is what I found out:

• The investments Salesforce.com has made in their cloud infrastructure over several years (and continue to make) has resulted in a platform that developers  are leveraging to rapidly deliver enterprise applications that deliver world-class performance, reliability, and security.

• Of the many native Force.com applications that extend Salesforce beyond CRM, it’s been my experience the most challenging are Configure-Price-Quote (CPQ) and contract management.  Creating a single system of record across these two areas is challenging even outside of Force.com, which is why many companies in this space have two entirely different product strategies.  Apttus is the exception as they have successfully created a unified product strategy on Force.com alone.  I recently had the chance to speak with Neehar Giri, President and Chief Solutions Architect.  “Apttus’ strategic decision to deliver our enterprise-class applications natively on the Salesforce platform has allowed us to focus on our customer needs, meeting and exceeding their expectations in both functionality and speed of innovation,” said Neehar Giri, president and chief solutions architect, Apttus.  “We’ve seen the platform evolve rapidly in its capabilities and global scalability.  Apttus’ customers have and continue to benefit from the true multi- tenancy, world class security, reliability and performance of the Salesforce Platform.”

• Salesforce.com’s multi-tenant architecture allows for optimization of computing resources resulting in savings and significant gains in efficiency for global enterprises even over applications deployed on private clouds.

• Native Force.com applications share the same security model as Salesforce apps.  Financialforce.com chose to develop their accounting, ordering and billing, professional services automation and service resource planning entirely on the Force.com architecture due to shared master data, multi- tenancy, world class security, reliability and performance.  This shared architecture also benefits enterprise consumers of native applications by providing best-in-class uptime.

• Native Force.com applications are contributing to greater return on investment (ROI). IT often does not need to manage data integration or sync issues, upgrades to even large numbers of users are easily deployed, and users can remain in a familiar interface.   These benefits support faster and easier deployment as well as rapid user adoption both of which are critical to success and a high ROI for any solution. Enterprise developers have often mentioned the familiar interface and ease of deployment have led to higher rates of adoption than any other approach to delivering new application functionality.

• Advanced APIs to support integration of legacy applications not on the Force.com platform.

• Proven ability of Salesforce.com to support global deployments.  The company has expanded its global support centers.  Salesforce.com also publishes real-time statistics on system status: http://trust.salesforce.com/trust/.

• A continuing acceleration of new capabilities resulting from increasing numbers of developers driving the advancement of the platform through their collective input, suggestions and requirements.

• Ability to design applications that respond with greater customer insight and intelligence across mobile devices.  ServiceMax has an impressive series of mobile applications that do this today.  I had a chance to speak with David Yarnold, their CEO about his vision for the company.  He wants to give ServiceMax’s customers the ability to deliver flawless field service where every interaction is perfect.  By building on the Force.com architecture he explained how each service customers’ contextual intelligence can be seen in real-time by everyone involved in serving customers.  Clearly ServiceMax is capitalizing on the mobile development platform area of Force.com as well.

Bottom Line: Enabling developers to attain greater revenue growth, while creating an extensive mobile app development platform is further proof Salesforce has turned the corner from being an application company to a platform provider.

(Cross-posted @ A Passion for Research)

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Enterprise Irregulars is sponsored by Salesforce.com and Workday.

(Cross-posted @ Beagle Research, LLC.)

Dreamforecast is copyrighted by Denis Pombriant. If you are reading this outside your feed reader, you are likely witnessing illegal content theft.

Enterprise Irregulars is sponsored by Salesforce.com and Workday.

Salesforce Seeks To Tackle Digital Business At Dreamforce

Over 125,000 virtual and physical registrants descend on San Francisco the week of November 17th for Dreamforce 13, a future of technology meets SXSW event.  One day in advance of the largest enterprise software event of its kind, Salesforce.com announces Salesforce 1 (see Figure 1).  The Salesforce 1 customer platform seeks to address a cadre of emerging digital business requirements that customer centric companies face.

Figure 1. Salesforce 1 Customer Platform Intends to Support The Internet Of Customers

Source: Salesforce.com

SalesForce 1 Reflects Much Needed Refresh Of Existing Platform

The new customer platform includes platform services, platform APIs, and the Apps created from the platform.  Salesforce 1 platform services includes refreshes in Force.com, updates in Heroku, and adds Exact Target Fuel.  As expected, Sales Cloud, Service Cloud, Exact Target Marketing Cloud, and Apps Exchange sit on top of the salesforce1.com platform.

The key analysis of this release include:

• Internet of Customers support. Salesforce includes social, mobile, cloud, and connected as the key components for The Internet of Things.  In order to meet the requirements of a third wave of computing that moves from Internet of Things to what Salesforce calls the Internet of Customers, the new platform is designed to support this customer centricity convergence.
  
  Point of View (POV): Constellation sees more than 50B connected devices and at least 150B connected endpoints by 2020.  The opportunity is huge.  While Salesforce.com addresses 3 out of the 5 key components of digital business, the vendor still needs to provide video/unified communications and big data/analytics.  Constellation believes the big data and analytics opportunity is critical to enhancing customer experiences, to benchmarking and brokering data servcies, and to buildoing new business models around big data and analytics.  Customers should encourage Salesforce.com to consider how to enable big data business models in digital business in the next iteration.  Meanwhile, most customers can wait until future releases for video and UC requirements to be met.

• Next generation apps developer platform. The PaaS layer adds a mobile first orientation that enables a write once and deploy anywhere platform. Developers can now deploy to a range of social, mobile, and connected devices.  The platform services include 10X more API functionality.   Developers can build customer apps, wearable apps, product apps, and salesforce apps.
  
  (POV): Salesforce hopes that its customers and partners will turn to the Salesforce 1 platform to build the next generation of apps.  The new approach through Visual Force reflects today’s responsive design and connected enterprise requirements.  Customers and partners will take advantage of the new data APIs improve queries to core CRM object data.  Metadata and UI APIs improve ability to create new user experiences.  Visual force also allows developers to build to any user interface through a responsive design approach.

• New mobile apps exchange apps. Salesforce adds 16 new mobile apps from partners.  Partners include Box, Concur, Docusign, Dropbox, eVariant, Evernote, FinancialForce, FileBoard, HP,  Kenandy, LinkedIn, ScanBizCards, ServiceMax, TAS group, Workday, and Xactly.
  
  (POV): AppExchange set the standard for how cloud apps could be marketed and sold inside a vendor ecosystem. Salesforce intends to replicate this success with mobile apps.  Customers will benefit from a vibrant ecosystem of paid, free, and custom developed apps.  There is a huge opportunity to expand out this ecosystem.  The mobile apps exchange catapults  Salesforce.com in direct competition with IBM and SAP for mobile dominance among customers.

The Bottom Line: The Digital Business Era is Upon Us.

Salesforce is upping the game on what it means for customers and their things.  The platform and messaging expands their addressable market while provides customers an entry point into the digital age.  This digital age must address five generations of workers and customers where age has no impact on digital proficiency.  Moreover, this shift to a digital business world reflects the trends Constellation Research sees in the market where organizations:

1. Recognize that they no longer sell products and services, as buyers seek experiences and outcomes.
2. Democratize the data to decisions pathway to enable innovation.
3. Realize that B2B and B2C are dead. It’s a P2P and M2M world or Internet of Customers
4. Focus on context as right time relevancy beats real time information overload.
5. Shift from engagement to mass personalization at scale.

The digital business age is upon us.  Those who fail to adapt will fall behind.

Your POV.

Are you ready to incorporate digital business transformation in your organization’s strategy?  Are you embarking on a digital business transformation?  Let us know how it’s going!  Add your comments to the blog or reach me via email: R (at) ConstellationR (dot) com or R (at) SoftwareInsider (dot) com.

Please let us know if you need help with your Customer Centricity and Digital Business transformation efforts.  Here’s how we can assist:

• Assessing customer centricity readiness
• Developing your digital business strategy
• Connecting with other pioneers
• Sharing best practices
• Vendor selection
• Implementation partner selection
• Providing contract negotiations and software licensing support
• Demystifying software licensing

Related Research:

• Tuesday’s Tip: Understand The Five Generation Of Digital Workers
• Monday’s Musings: The Chief Digital Officer In The Age Of Digital Business
• Slide Share: The CMO vs CIO – Pathways To Collaboration
• Event Report: Seven Trends From This Year’s Human Resources Technology Conference 2013 (#HRTechConf)
• Event Report: Metaio’s #InsideAR Conference Hails The Future Of An Always On, Always Augmented Reality
• Event Report: CRM Evolution 2013 – Seven Trends In The Return To Digital Business And Customer Centricity
• Research Summary And Speaker Notes: The Identity Manifesto – Why Identity Is At The Heart of Digital Business
• Monday’s Musings: The Controversy Surrounding Gartner’s CRM Market Share Analysis
• Research Summary: Constellation Cosmos – Cloud Bill of Rights for SaaS Apps, Actian and Netsuite Achieve Epic Status
• Trends: Seven Priorities In The Shift From CMO to Chief Digital Officer
• Monday’s Musings: Understand The Four Organizational Personas Of Disruptive Tech Adoption
• Event Report: The Tweet Stream From #DF12
• Event Report: Dreamforce X (#DF12) Emerges As The South By Southwest (#SXSW) For The Enterprise
• Monday’s Musings: The New Engagement Platform Drives The Shift From Transactions
• News Analysis: KANA Enters MidMarket With Trinicom Acquisition
• Best Practices: From First To Worst – Continental In A Post United World, Lessons In Next Gen Customer Experience
• Monday’s Musings: Seven Basic Privacy Rights Users Should Demand For Social Business
• Monday’s Musings: Balancing The Six S’s In Consumerization Of IT
• Monday’s Musings: A Working Vendor Landscape For Social Business
• Product Review: Google+, Consumerization of IT, and Crossing The Chasm For Enterprise Social Business
• Monday’s Musings: Using MDM To Build A Complete Customer View In A Social Era
• Monday’s Musings: Mastering When and How High End Brands Should Use Daily Deal Sites Such As Groupon
• Best Practices: Applying Social Business Challenges To Social Business Maturity Models
• Research Summary: Software Insider’s Top 25 Posts For 2010
• Best Practices: Five Simple Rules For Social Business
• Research Report: How The Five Pillars Of Consumer Tech Influence Enterprise Innovation
• Research Report: Next Gen B2B and B2C E-Commerce Priorities Reflect Macro Level Trends
• Tuesday’s Tip: Applying The Five Stages Of Adoption Towards SCRM Projects
• Monday’s Musings: Avoiding Failure In Social CRM Projects Requires Ecosystem Coordination
• Research Report: The 18 Use Cases of Social CRM – The New Rules of Relationship Management
• Monday’s Musings: Why Every Social CRM Initiative Needs An MDM Backbone
• Monday’s Musings: 10 Essential Elements For Social Enterprise Apps

Reprints

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Disclosure

Although we work closely with many mega software vendors, we want you to trust us. For the full disclosure policy, stay tuned for the full client list on the Constellation Research website.

* Not responsible for any factual errors or omissions.  However, happy to correct any errors upon email receipt.

Copyright © 2001 – 2013 R Wang and Insider Associates, LLC All rights reserved.
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(Cross-posted @ A Software Insider's Point of View)

News Analysis: Salesforce 1 Signals Support For Digital Business at #DF13 is copyrighted by R "Ray" Wang. If you are reading this outside your feed reader, you are likely witnessing illegal content theft.

Enterprise Irregulars is sponsored by Salesforce.com and Workday.

(note: this is a similar format to my brief history of SCRM, which was widely successful at the time to explain how SCRM came to be.  This is in no way related to Stephen Hawkins’ masterpiece – but you likely already knew that. my official disclaimer of conflict of interests and such is at the bottom of this post)

I let some time go by after DreamForce 2013 so I could cool off from the heated discussions I had with plenty of people.

If I hear one more person tell me that Salesforce1 (S1) is a client-side app, a mobile client, the culmination of Touch (remember that launch? Not many do) or something similar I will scream (like I did the past few days).  And the problem is that Salesforce.com (SFDC) has such a loyal customer and fan base that they will repeat pretty much what they are told (as well as some of the “influencers” and “analysts” out there – unfortunately analysis is no longer a required activity for analysts).  This dichotomy between what it is and what was presented at the show culminated (at least for me) in an exchange between Marc Benioff and myself on Twitter on Thanksgiving Day (Zachary Jeans did a good job of converting it to a Storify stream; you can find it here if you are interested).

That exchange prompted me to write this, I had only been talking to people about it prior, as a way to preempt the question of what is S1 and why there is so much confusion.

You see, there is so much to what S1 is that is not being covered that it is almost an insult to the people that spent 3-5+ years working on getting it done.  To make justice to the journey, and explain it in more detail that you probably have seen, a little history is in order.

The History

SFDC launched in 1999.  At the beginning their call to fame was “No Software” (still hanging around today, ask TooSaasy) back in the days before we had cloud or SaaS.  In those days the rage was Hosted Applications (also known back then as ASP – which was Microsoft’s version, remember Microsoft? It was pretty big back then).

To put it into perspective, this was about the same time Siebel was dominating the “CRM” (read sales force automation mostly with very bad versions of marketing and passable versions of customer service) market; by promising no software to be downloaded (and very low prices to boot) SFDC was able to take a nice piece of the market from Siebel.

Now, keep in mind this was not a cloud application, this was a hosted application.  That means there was a monolithic architecture (mono=single, lithus=stone – meaning an all-in-one comprehensive solution) that run using browsers as interfaces.  To make this happen, things like multi-tenancy (many users running the same application) and multi-instances (many copies of the exact same application) were necessary.  I already covered why multi-tenancy is a horrible idea for real cloud applications (please read it, extend it to multi-instances as well – applies later in the story).

Bottom line: back then this was all we had.  Other vendors like RightNow Technologies, E.piphany, and many others were doing the same: hosted applications that provided a browser interface to monolithic solutions running in the background.

The problem with monolithic architectures is that is a client-server solution through-and-through and it cannot leverage the basic principles of distributed computing well (which is the basis for cloud computing as well as know).  Thus, running monolithic solutions (even via browsers for interfaces) means that innovation, security, integration, and even the ability to scale the solutions are very limited. The cloud computing promises of infinite elasticity, easy integration via platforms, and vetted and tokenized security to ensure privacy and safety is not possible in hosted applications, just like it was not possible in client-server applications without significant investment and unsustainable methods.

Well, I should say not possible to be done easily – but anyone can “pretend” they can do it by creating more and more complex code and solutions.  Removing the flexibility and elasticity of the cloud computing architecture gave us what we called, incorrectly, cloud for a long time: between 1995 and 2005 there were only hosted applications (with very few exceptions coming from smaller vendors) that could not leverage the promise of cloud computing.

SFDC, as well as most other Enterprise Software vendors, was in this camp.

This was very evident to the people who saw SFDC try to build ServiceCloud in the early days: version after version of a monolithic solution that could not integrate with or work as the other solutions deployed by SFDC and could not compete with the then-reigning-champion:  RightNow Technologies (another hosted solution, still today) or even the smaller customer service vendors.

Sometime in 2006-2007 SFDC realized the problem they had and noticed that distributed computing and three-tier cloud computing was starting to be noticed in the Enterprise Software world (some of the early smaller vendors that were creating innovative solutions for Enterprise Software were beginning to leverage the cloud computing model and break their monolithic solutions into tiers, finding ways to deploy them and leveraging the recently launched AWS services from Amazon and Grid computing from other large vendors).

In 2007 SFDC launched Force.com – their first attempt at a platform.  While the migration of existing code bases was not in the initial plan, the idea was to build a platform layer as part of a three-tier cloud computing model and let developers use that to access SFDC applications.  This was their first attempt at delivering a platform and had, still today has some, many problems: proprietary languages, incomplete service directories, and limited integration into the existing applications of SFDC (SFA and the pretty bad customer service solution back then) were the most noticeable for users; a very complex architecture was the problem for whoever looked behind the browser.

Alas, it was a good first step and it was welcomed by the developers and customers as a way to extend the existing solutions SFDC offered back then.

The Evolution

What follows was a list of steps that helped them realize the potential and power of the platform (trying to shorten this post, which is going to be long anyway):

• In 2008 SFDC acquires Instranet, a French customer service solution that was very strong in knowledge management but not so much in other areas.  The great part of that acquisition was getting Alex Dayon, a young technologist who understood the power and the concept of the cloud computing model and was willing to rebuild service cloud as a platform-based solution.
• In 2009 Vetrazzo, an SFDC customer, built ERP functions in force.com in one-third the time and cost of buying an ERP solution to run their organization.  This was not done with SFDC but it was heavily advertised by then once it was done. This proved that motivated customers with access to Force.com could do anything they wanted.
• In 2009 FinancialForce launched using Force.com as their underlying platform to offer accounting solutions to SFDC customers.
• In 2010 Kenandy launched using Force.com to create a standard ERP solution, still standing today and used by multiple SFDC customers.
• In 2010 SFDC launched Chatter, which was initially launched as a hybrid of platform solution and monolithic architecture software. Very important later as it was another data point in showing that platform-only solutions (see above) were better.  It also became the “guinea pig” of migrating SFDC applications to become platform solutions.
• In 2011 and 2012 SFDC acquired several “dot-com” properties (some of them later became data.com, work.com and desk.com) as well as Heroku (a platform focused on letting developers write smaller apps that could be deployed via web or mobile using different languages)

All these steps were essential to the development of S1, for different reasons:

• Instranet, which later became a working model of ServiceCloud – the first-one ever to be honest – was a proof-of-concept that platform based solutions could be done.  The development of this solution as ServiceCloud was done (approximately) between 2009 and 2011.
• Chatter was further proof that monolithic applications were a horrible idea if they were going to be used as a platform.  When Chatter was first launched it could only operate as a stand-alone solution, another entire solution separate from existing applications, and integration into the code-bases of ServiceCloud and SalesCloud was nearly impossible – something that a platform-based service could’ve done with little effort if any.
• The varied dot-com acquisitions, and platform-based launches by their partners, were important to prove that (since they were real three-tier cloud solutions) platform based services could be used and leveraged across different applications, and to prove that cloud-computing was a far better model than monolithic solutions (I wrote about the acquisition of Assistly, now desk.com, and covered some of these points).

Now it is 2011ish (not very precise, some of the points above came more clear as the development of S1 was underway, but it is the right timeframe going forward).  SFDC already knows that Force.com is not cutting it as a platform (it was proven when they could not launch Chatter as a platform service) and they need to do something.  What follows is one of the hardest decisions to take as an Enterprise Software vendor – but one that will have proven incredible beneficial for SFDC: they needed to re-architect Force.com.  This was the genesis of S1 (not the original name, and certainly not any name that was used during development).

SFDC makes the decision to re-architect the platform that was supposed to be basis for everything they do – and to fully embrace the three-tier model of cloud-computing.  The new platform will not only be extensible, secure, and elastic – it won’t have the interface code it had before (that becomes the true SaaS) and will have to separate the database and connectivity layers form the platform as well (this was the hardest thing to do, but this is another long story).

Among the many things they had realized once they got going was the power it can confer.  Take Chatter for example, one of the best examples of this change.  Chatter was a stand-alone solution that could, in the original implementation, bring some details from files and users into an activity stream.  It was not possible at the beginning to use Chatter for the new ideas that were emerging: make the stream part of all applications and functions, integrate it directly into groups and files to launch communities, and even worse – make it the basis for the social enterprise model that SFDC had then espoused.

Chatter was redone – the second time was done as a full platform-based solution: a service-based application that can operate within the platform to serve functions to any other application. The re-launch of Chatter as a platform (done in 2012) was a showcase of the power of what Force.com (then) could do: it quickly became part of everything that SFDC offered, its functions were easily accessible by not only other applications but also by customers, partners, and even competitors (the back story on Chatter and the database licenses it required, and how that became a roadblock for its growth was solved in the deal reached in2013 with Oracle– also another great story for later).

The Proposed Solution

And now we are at the end of 2012, beginning of 2013 with three incredible important accomplishments:

1. A newly re-architected platform (yet unnamed) that could change the Enterprise Software world
2. A new version of Chatter that not only serves as the proof of concept for this platform, but also the epitome of the many acquisitions and partnerships it took for SFDC to get to this point.
3. The burning question of how to deploy and leverage this the best way possible.

Enter S1.

I am not yet sure of how and when S1 was named so, and it does not matter. What matters is what it can do: it has the power to change SFDC from a hosted application (fine, hybrid hosted and cloud application if you prefer) vendor to one of the few solutions in the market with the clout and power to change cloud computing and ensure the adoption by organizations (IBM and Microsoft are the closest – but that is a whole different story also, trying to stay focused).

Here comes DreamForce 2013 – the chance to introduce S1.

During the keynote(s) (there were many more than one) the emphasis for S1 was on the use as a mobile client (it’s an app you can download today in the app store – don’t wait!), as a platform and an app (as if you could be a car and a highway system at the same time), and as many more things than what it is.  My blood pressure rose several points each time someone asked me what I thought of the “new mobile app: S1” or tried to convince me this was the culmination of Touch (that was a release SFDC did to address HTML5 “clients” about two years ago, a total failure – still exists somewhere in the chatter mobile and other apps, but nowhere near what the expectations were at the time).

To be fair, SFDC partners, most of them, I talked to were very smart about it and are already working on very interesting modules that leverage S1. The understanding of a three-tier model for cloud computing and how SFDC is working to incorporate it into their solution was not beyond comprehension by partners, it was poorly explained by SFDC.

The fact that some of SFDC employees were repeating this mantra of “mobile client” was what made it more cumbersome to me: knowing the effort and time it took to build it – why belittle it by calling it a mobile client?

S1 could be a mobile client – well, not really.  It can be displayed via a mobile client (mobile is an interface, not a client) as well as a desktop, a laptop, a tablet, a smartphone, a partner application, a custom app, an embedded item, a connected machine, even a connected customer and anything else in between.  Because it is a platform, any change you make to a service is IMMEDIATELY reflected in all clients and interfaces – that is the beauty of the three-tier cloud computing model.

There are many benefits to S1 (the platform) that are not being discussed (which I will make the ending of this book-long post).  There are some I will miss in this short post (yes, short – I once wrote a 45+ pages simple explanation of how cloud computing works).

Let me explain some of the things you can get when you stop calling it a mobile client and focus on the power of the platform (and we will extend that to ecosystems of platforms in another post):

1. Any client, anywhere can access any service offered by the platform.  This means that once you authenticate with a platform, anything else you want to access that is trusted to that platform is also accessible (PaaS to PaaS integration is far safer and scalable than point-to-point integration or security as done today by monolithic solutions)
2. Any interface (mobile, computer, watch, a “thing” in the internet of things) can access the functions and data (once properly secured and authenticated) and display it – you cannot have an “internet of things” or even an “internet of customers” without an ecosystem of trusted platforms (well, not a sustainable one at least).  This will lead to the rise of “atomized apps” (usually called apps).  These apps are found in mobile devices and are single-function solutions that require no further logic (think about it this way, if your job involves checking people’s credit scores before approving an application for a loan – wouldn’t you prefer to have a simple app that does just that? If your smartphone or table can do it, why not your organization? It now can)
3. The concept of multi-tenancy finally disappears (yay – I cannot tell you how happy I am) together with the concept of multi-instances.  We move to elastic single-instances with single-tenancy: each customer can have their own service (managed via systems management and metadata quite easily) and instantiate is as many times they need – and make any changes they want in the process. No longer are customers constrained (either in data model or functionality) to what’s offered as they can extend the functionality quite easily by making another service call (to any providers) without having to worry about changing the core service.  (note: vendors will try to tell you how expensive this is as compared to multi-tenancy, but ask you yourself how “cheap” it was to use multi-tenancy and what benefits you as the customer derived from that – or read my previously linked post for that answer).
4. SFDC can create more modular “API calls”.  They introduced this at the same time as S1 but they failed to mention why this was possible: any API is a library of many calls to different parts of the monolithic application to leverage their functions and data.  API calls require complex transacting for security, scalability, and even integration that can reduce the granularity (read complexity or simplicity – either work – if you prefer) of how you can interact with it.  By using services that leverage tokenized security and inheritances (core benefits of cloud computing) the calls can be far simpler, and far many more, while performing at the same or better level.  Completing more service calls will use fewer resources and time that doing the same via API calls.  Bottom line: you can use more granular functions with far less resources.
5. Incorporating Enterprise Application Stores (EAS) into their cloud computing deployment will allow any organization to create as many atomized apps as they would like to, thus reducing the complexity of the solutions used by the customers, the training and support costs, and enabling and empowering their customers to build and use their own “custom” version of the Enterprise Software they have running.  The device and operating system they run is irrelevant as long they are supported in the EAS (SFDC announced, very quietly, the first version of their EAS at DreamForce).

The $64,000.00 Question

If you followed all this so far, thank you.  I know it is a bit to consume.

You are probably saying by now, is that Saleforce1? Is the platform they launched and announced as a mobile-client / platform / everything what it is? Is it working yet?

Lots of questions, one simple answer. No.

Let me explain.

Salesforce1 at this point is a very well developed concept, an idea that has been partially implemented and (like i said above) it has a lot of potential.  It has the potential to change how we do Enterprise Software and Cloud Computing forever.  It has the potential to change the way software vendors work with each other.  It has the potential to change how organizations think about ecosystems, about systems of engagement, and about everything from personalization to revenue models.

It has all that potential – but it needs to be realized.  By my estimates, it is about 60-70% complete right now.  Most of the basic APIs have been moved over to the new service-style granular API model and a large number of customers have been running in the new platform without knowing it.

A development environment, an extension of existing Force.com IDE, already exists and service calls are working and available.  There are development manuals and directions, guides on how to do it, and even a “mobile client” (think Chatter mobile and you get a good picture) to allow anyone working with it have a mobile interface to it.  The majority of the pieces are there, but it is not complete.

I talked to a few partners and they had been working with it for some time.  They have been, and continue to, developing new solutions leveraging what Salesforce1 has to offer for some time now.  They have plans, new ideas, and the desire to build new models and new execution paths to fulfill the needs of their customers.  They are working on it and are doing quite well from what i saw.

I also talked to a few, very few, early adopters that are beginning to explore and see what they can do with it.  Admins and Developers are getting a closer-to-the-ground look at the potential and power of the platform and creating very interesting apps and applications for it.

However, none of these are released (there are a few apps in the AppExchange that say Salesforce1 ready – but I have not found any customers using those versions yet).  By my estimates, we are at the very least six months away, but more likely nine-twelve months from having some extraordinary solutions with momentum.  We are one-to-two years away from revolutionizing the way we use those apps, and three-to-five years away from changing revenue and business models to accommodate this new platform (including the core concepts of cloud computing).

Of course, timing will change from industry to industry, and company size to company size.  There are no guarantees of how long it will take to get there, but this is for sure – although Salesforce1 is not 100% ready today, it is excellent progress towards the realization of one of my visions – and the delivery of significant value to the users, customers, and partners.

Time will tell.

This is a very, very brief summary of the many discussions I had over the past few days with different people.  There is a lot more than I can put in here, please contact me if you would like to discuss this in more detail.

I made the offer over Twitter before and I will make it again: I would be more than happy to invest the time and effort in helping anyone understand why S1 is far more than a mobile application or client.

The potential to change the game of Enterprise Software is phenomenal – let’s just hope SFDC does a good job of explaining it.

Yeah, you better believe I will send them. I will share via this blog following…

Thoughts?

A Brief History Of Salesforce1 is copyrighted by Esteban Kolsky. If you are reading this outside your feed reader or email, you are likely witnessing illegal content theft.

Enterprise Irregulars is sponsored by Salesforce.com and Workday.

We’re beginning to see an important differentiation, even a schism, in the enterprise software industry.  It’s been building up for the last seven years and it will burst onto the scene tied in a bow this year.  It’s the separation between conventional software suites and platforms and it is most vividly explained by front to back office integration but also alive and well just in the back office.

Let me digress.

In the conventional software era now heading into twilight, vendors provided more or less soup to nuts solution sets all integrated around proprietary standards, data models, middleware, and the like.  It took a long time for suite vendors to get to that point, developing one application after another, delivering additional functionality to the market year after year.  The process was not without its flaws and immature products occasionally got to market causing much heartburn for early adopters.

Cloud computing and subscriptions are changing all that and the most obvious change agent is Salesforce.com with its Force.com and Salesforce1 platform — Salesforce1 being the superset.

Rather than offering defined solution sets as conventional vendors have done, the Salesforce strategy has been to provide foundation technologies that include the development and maintenance tools you might expect from a solutions provider but with a twist.  The tools sit on a platform that also includes some spiffy data management, workflow, collaboration, social media, and analytics tools.  In short, just what you need to build robust apps these days — cloud or conventional.  Moreover, any developer can make an app that harmonizes with the platform and delivers a robust solution even if it’s version one.

This foundation also gives developers two things they’ve never had.  First, the ability to build apps that automatically integrate with others built to the same platform standards and, second, a way to define apps once and target-generate runtime images for a variety of operating systems.

One of the best examples of this approach is the Salesforce ecosystem and here we rejoin our previous column.

It is more or less expected that Salesforce can easily integrate with the apps in its ecosystem.  So the real proof of the platform is in the ability of non-Salesforce apps built on the platform to integrate with each other.

Earlier this week in Las Vegas, Zuora, a native application on the Force.com platform, announced a deepening relationship with Intacct a financial applications provider in the Salesforce ecosystem.  IntAcct is not a native Salesforce application set meaning it has its own cloud but no matter.  Another attribute of the platform is its API set designed precisely to enable the kind of integration just announced.

We’re not done yet.

Zuora is one of the leading providers of specialized services that help subscription companies and subscription groups within conventional companies, to account for the sometimes squirrely (that’s a technical term) business processes needed to correctly manage customer orders, configurations, billing, payment, and finance.  I can’t find an accurate number of Zuora customers but I can say they have offices in the U.S. and Europe as well as $132.5 million in venture capital.  The press release says Intacct has more than 7300 customers including startups and public companies.

My point is that the platform is not some gimmick for small companies or cloud only companies or front office only companies.  The cloud is for every company, everywhere.  This is made abundantly clear by this announcement by two back office companies this week.

This announcement is another proof point for the platform but also a major validation for Zuora that, by this integration, is enabling Intacct customers to build and deploy hybrid business models for its customers that include conventional and subscription businesses.

This is a big deal because it adds significant subscription functionality that will enable Intacct’s users to make better decision because they’ll have more information available.  And that information will not come at the cost of storing customer data in two locations and hoping to be able to synchronize everything.  The two systems will operate as a single entity for those companies sponsoring hybrid business models that are in need of hybrid accounting.

Obviously, the deal gives Zuora a universe of 7300 new customers but it also gives Intacct an easy way to deliver major new functionality with no drama.  That’s why I think this is a milestone event.

(Cross-posted @ Beagle Research, LLC.)

Zuora, Intacct Deal a Sign of Things to Come is copyrighted by Denis Pombriant. If you are reading this outside your feed reader or email, you are likely witnessing illegal content theft.

Enterprise Irregulars is sponsored by Salesforce.com and Workday.

What’s going on in the back office?

That normally staid bastion of conventional computing is perking up taking on subscriptions and cloud computing like candy.  It used to be that when you thought about back office and cloud in the same thought you also thought about NetSuite.  Truthfully you still do, they’ve been at it a long time and have produced a solid and well articulated suite of back office ERP, finance, and accounting software (and more) that runs a lot of companies, especially the international variety that keep books in multiple languages and currencies.

But over the last ten days other companies have announced partnerships and solutions that both challenge NetSuite’s position and point to an important new era in computing.

The new era has been percolating through all of this century.  Ever since Salesforce starting selling “no software,” cloud computing and subscriptions have been stealing a march on conventional, expensive, and bloated on premise software.  Each year these solutions became more powerful and ubiquitous.  First they supported other subscription companies, then all sorts of companies, and now, with the advent of the platform, cloud computing has come to the development suite and the back office.

The back office!  Ten years ago the mantra was “Not with my data!” but something happened.  Certifications sprouted and cloud became normal and safe and with Salesforce’s leadership, kind of cool.  On the back office side, NetSuite carried a similar message to the point that today cloud and accounting are no longer words that, when spoken together, sufficient to punch your ticket to a long rest in a rubber room.

The last week has seen a breakout of sorts for subscriptions, cloud, accounting, ERP, and platform computing.  Zuora and Intacct announced a widening partnership that will deliver Zuora’s subscription billing, payments, accounting, and financial management solutions to Intacct’s 7300+ cloud accounting customers.  Be aware that cloud and subscription are not the same.  Intacct has been successfully delivering cloud based accounting services and giving NetSuite its fair share of competition for many years.

The addition of subscription power from Zuora raises the bar to enable Intacct’s conventional customers with subscription aspirations to support what can best be called hybrid business models.  At the same time, the announcement also shines a light on Salesforce’s platform strategy.  Zuora is a native application on Force.com and Intacct has developed powerful integration with the platform in general and the joint announcement says they’ll double down on that integration.  For Zuora it means 7300 new prospects, for Intacct it means a major capability upgrade without breaking a sweat.  But we’re not done.

Also today, FinancialForce, a native accounting system on the Force.com platform just announced their entry into the ERP market with FinancialForce ERP.  As a native application on the Force.com platform, FinancialForce has completed the circle of front to back office solutions that began with Salesforce.  With all of the available solutions, a company of any size or complexity can now support all of its enterprise IT in the cloud and via subscriptions.

I think the biggest news in all this is what will happen to conventional IT in the years ahead.  Pessimists say that IT will wither as significant chunks of functionality decamp for the cloud but I disagree.  IT has always been a major component of a company’s secret sauce.  If garden-variety accounting systems, even those that support subscriptions, can be off-loaded to the cloud that’s fine.

As more enterprise solutions head for the clouds and budget ratios turn from capital expenses to operational, we should see a renaissance of in-house application development which will, importantly, drive new business processes, especially in mobile apps that will help users do more and better business and do it faster.  That’s where the secret sauce is and will remain for the foreseeable future.  Time to embrace it.

These foundational changes come at an opportune time as prognosticators think about what it will mean to have 50 billion devices hanging off the Internet in 2020.  Devices will increasingly be non-human consumers of goods and services (especially for restocking) and producers of data and information.  Their transactions will take fractions of a second, be automatic, and require the attention of the infrastructure we are building now with cloud and subscriptions.

So the significance of these announcements together with things that have been coming out in the last year all point to an important milestone.  Conventional applications managed data but the new stuff with platforms, front and back office integration, workflow, and social media all point to building and managing better business processes.  I think we’re close to the end of a long wave of technology invention and at the beginning of an era of its consolidation and application.

(Cross-posted @ Beagle Research, LLC.)

Back Office Perks Up is copyrighted by Denis Pombriant. If you are reading this outside your feed reader or email, you are likely witnessing illegal content theft.

Enterprise Irregulars is sponsored by Salesforce.com and Workday.

Platforms – can’t live with them… pass the potatoes.

I know, we all hate platforms.

The crux of the problem is explaining what a platform is and how it works, I can write for ages about the details and go into nitpicking details – and never publish.  The closest I got to it was the post I did when SFDC announced Salesforce1 (the platform, not the message of a mobile client attempt at confusing users).

But the issue remains: how to explain platforms easy and simple?

Then, it hit me as I was sitting at conference after conference these past weeks: use examples.  I collected some of the most obvious ones these past months and I want to share them with you to try to elucidate on what platforms are and how they work.

Defining a Platform

If there was ever a fool’s errand it is to try to get y’all to agree on what a platform is.  I know better than that.

However, before we start I want to give you a short version of  what I call platforms (and what you should also, if you want to be right… ok, ok, just messing with you…).

First a proper definition, but not from Webster’s (who misses the point by simply stating it is an OS – which is a very basic form or platform, but not related to cloud computing), but form Wikipedia (after disambiguation, ended up in computing platform) that says:

A computing platform is, in the most general sense, whatever pre-existing environment a piece of software is designed to run within, obeying its constraints, and making use of its facilities. Typical platforms include a hardware architecture, an operating system (OS), and runtime libraries

Some of the critical pars of this definition are: environment, self-contained, and with specific resources to leverage the environment at least as I read it, but I may be biased. Also, by “hardware architecture” I interpret Cloud Computing in the context of this post and my future writings.

In cloud computing, a hardware / software architecture combination, the platform is the middle layer that provides essential, secure, scalable, and repeatable services that are then leveraged by the SaaS and IaaS layers to run operations.  Think of it as a “traffic cop” that ensures that the right element (data, function, integration point, more) goes where it is supposed and ends up in the right place, after providing it with the right resources to get there.

The easiest way to think about a platform (PaaS) in cloud computing is to look at the requirements:

• A component of a three tier open cloud architecture (entails being able to communicate with any IaaS or PaaS or SaaS component directly without point-to-point integration) – see figure below

• A collection of functions delivered like a service (see some of the examples in the picture above); if you want to call them APIs, do so – but make sure they are open, discoverable, and secure as services at the very least (there is lot more about this coming in future posts).

I am in awe of the many versions and approaches I am finding (as well as failed attempts).  I will highlight a few, but know that I’m merely pointing you to some of the most mature I found; there are many, many others not included here (I cannot cover everything in one post, sorry).

The Platform-to-Platform Play

FinancialForce.is a very interesting play on platforms, as they are both an application leveraging Force.com (Salesforce1) as a platform and a platform on their own.  Depending on what solutions you implement you are either using a service that is delivered on top of Force.com (Salesforce1) or their own platform that also connects to Salesforce1 (Force.com) to provide additional services.

As you see in the chart above, there is an inherent element to cloud-based platforms that is to connect to other platforms and FinancialForce has done this quite well.  By establishing these connections between platforms they both deliver a value add via  new platform that can easily integrate into exiting ones as well as leverage previous investments the customer may have made.

This is the way organizations will leverage the solutions and power provided them by vendors in the cloud: through an aggregation of multiple services delivered by a myriad of platforms providers.

The traditional role of the vendor as a seller of software that does everything end-to-end is coming to an end and being replaced by vendors that connect platforms and offer services on top of them.

The Leveraged Outcome Play

The second example is something that Xactly showcased earlier this year: a new service based on the outcomes generated by the established service they provide.

If you don’t follow Xactly they have a service that helps organizations manage their compensation strategies and tactics.  They do this by delivering data points showing  what others are doing (anonymously) and use that information, together with real-time performance data, to manage compensation for sales people.

In a world that is dramatically changing the value and purpose of the salesperson, Xactly offers organizations an easy way to manage their performance and to reward the right behaviors with proper compensation dynamically and flexibly.

One of the things that Xactly noticed was that they had access to reams of data about more than compensation: who the people were, how they acted, what they did and didn’t do, what worked and didn’t, etc.  All that data started to show insights that were too useful to be abandoned.  Xactly at first used them to share with their clients, in a non-methodic manner, as casual insights.

Along the way they figured two things: one, the insights could be a  product once they figured a method to share them consistently with customers who wanted to know not only how they compared to others, but also what worked and didn’t for others.

Second, it was not only that specific data that made sense-  but the model.  The model of collecting data, any data, from transactions and operations as part of cloud-provided services.  This model, together with the data and the insights, became the basis for a new service they provided via their existing platform by simply leveraging the outcomes and the results of the other services.

This is what platforms do divinely well and easy: extend what has been done into many different new directions with minimal effort.

The Extending Functionality Play

Another platform example that I noticed recently was Hubspot.  At their recent user conference they announced that in addition to the Marketing Automation functionality they were already offering they would begin to offer more basic CRM functionality (related to Sales and Pipeline management as well as contact management).

This was partly led by requests from their clients and partly by them noticing that the data was the same and if they could add a few more reporting and operations functions to the cadre of services their platform offered they could extend the functionality of their platform – but more importantly do so in a way that delivered what customers wanted to see.

Hubspot focus was not only on the data they could add to their existing database, but more on the functions that their customers could not complete with other offerings as well as extending the functionality of their functional and reporting services.

By extending the functionality of their platform (adding new services) they were able to deliver more value to their customers and also showed them how easy it was to do so, enabling future requests for added functionality to come in to them and they can fulfill them – continuing the cycle.

Other Examples

One more place where I am seeing the rise of platforms play is in the CRM Idol competition.  Now on its fourth year, we are used to seeing the contest showcase the main technical challenges, and solutions, offered by new and starting CRM vendors.

During the previous years we saw plenty of focus on social, analytics, big data, marketing automation, and small medium businesses – but this year we are seeing a lot more focus on delivering all these solutions as platforms or even as services for other platforms.

While I cannot name names yet (as the contest is still underway and I cannot show favoritism) you can see the list of participants and draw your own conclusions.  However, know that I am more impressed by the technology deployment approach via platforms this year than at any other time.

Please keep in mind that these are just a few examples of what I am seeing as there are many other plays I didn’t highlight (but will going forward).

OK, your turn – flame on (I feel so old saying that)… Troll on… whichever you prefer.  Tell me what I missed and what you noticed.  Caveat: if you are vendor touting your own solution, likely that your comment will be “spamatized”.

What do you say?

(Cross-posted @ thinkJar)

Platforms: What FinancialForce, Xactly, and Hubspot Understand is copyrighted by Esteban Kolsky. If you are reading this outside your feed reader or email, you are likely witnessing illegal content theft.


Enterprise Irregulars is sponsored by FinancialForce.com, Salesforce.com and Workday.

I’m at Salesforce.com’s Cloudforce event in London today, where there’s a lot of talk about Chatter, the vendor’s social collaboration platform. There are several announcements coinciding with the event, in particular Chatter Mobile, which takes Chatter out onto iPhone, iPad, Blackberry and Android. Also of interest is the news that social stream aggregator Seesmic now integrates Chatter as one of its feeds.

With these announcements, Chatter is starting to grow up and demonstrate how social networking tools can actually deliver business benefits if they have the right capabilities and are tuned to the needs of an enterprise environment.

Chatter (as I’ve covered here previously) allows users to track data as well as people: both internally, for example open support cases, credit alerts, regularly updated documents such as slide decks, price lists and commission plans; and also externally, for example updates to contacts from Salesforce.com’s recently acquired JigSaw application, which ‘crowdsources’ up-to-date information about contacts and organisations.

One of the most compelling attributes of Chatter is that it makes real-time communication and collaboration really easy — especially in comparison to current enterprise collaboration tools, which rely heavily on email and on shared web pages. Salesforce.com has customer case studies, as well as its own experience internally, that show that it’s fairly typical for sales teams to see email traffic cut in half when they introduce Chatter.

Staying on top of social network information streams is often a challenge, and in a business context it’s important that key messages are spotted and acted on. There are a number of different ways of filtering the information streams in Chatter so that a worker can home in on the conversations and data feeds that are important to them. I’m told that early adopters have especially welcomed the recent introduction of groups, making it possible to tune into the conversations from certain teams.

The big advances with Chatter compared to more conventional collaboration platforms are how easy it is to put messages into the stream for collaboration purposes. This is partly because Chatter is integrated into the Salesforce.com application interface (or Force.com UI), and partly because the short message format is much easier both to compose and to read. Dropping in links and attachments is really easy too.

The mobile application adds to that effect. It looks especially impressive on a touch screen device (so here’s another reason to equip your sales team with iPads), incorporating many of the time-saving touch-screen gestures that Apple has made so familiar to many of us in the past couple of years. But it’s also important that these smart devices have built-in capabilities such as cameras, which can be adapted to the needs of the application. For example, sharing a quick visual sketch of an idea is as simple as scribbling it on a scrap of paper, photographing it and posting it to your Chatter stream. No more faffing about with inadequate whiteboard applications, just jot, click and go.

The next phase is to integrate the corporate Chatter stream with other conversations happening in the outside world. Loic LeMeur, founder and CEO of Seesmic, joined Marc Benioff on stage today to show off precisely that capability. Seesmic already aggregates more than 40 social networks and geolocation applications. Now it aggregates Chatter so that sales, marketing and support staff who need to see what people are saying out in the outside world can do that alongside their Chatter stream and bridge across different streams when necessary. Available as a browser app this week, the app will be on the iPad soon and Android next.

Bringing Social Tools Into Sales is copyrighted by Phil Wainewright. If you are reading this outside your feed reader or email, you are likely witnessing illegal content theft.

Enterprise Irregulars is sponsored by Salesforce.com and Workday.

Dreamforce 2010 is copyrighted by Michael Fauscette. If you are reading this outside your feed reader or email, you are likely witnessing illegal content theft.

Enterprise Irregulars is sponsored by Salesforce.com and Workday.

(Cross-posted @ Michael Fauscette)

Applications that are Social is copyrighted by Michael Fauscette. If you are reading this outside your feed reader or email, you are likely witnessing illegal content theft.

Enterprise Irregulars is sponsored by Salesforce.com and Workday.