March 30, 2009, 11:33 AM — At a time when many companies still struggle to manage the rise of social networks and understand what the trend means to their organizations, Salesforce.com has begun tailoring its business software to help people harness the power of social media. During the past year, the company has taken several steps to make its core products work alongside popular consumer applications like Facebook, Google and Twitter.
While analysts say Salesforce.com's efforts to make its business applications more social and consumer-oriented will further bolster its ongoing efforts to uproot old school rivals like Oracle and SAP, the strategy also shows a forward-thinking view in how business technology has changed: The traditional tendency to separate business and consumer technologies is not only unrealistic, it misses an opportunity to interact with current and prospective customers.
"They're the only enterprise vendor that has really embraced the social side of the Web," says Yankee Group analyst Sheryl Kingstone. "Everyone can spend their time on Twitter, but this enables some collaboration with customers because of it."
They've Got a Friend in the Consumer Web
Salesforce.com's latest foray into the consumer Web happened earlier this week. The San Francisco-based vendor announced that organizations using its customer service application (dubbed Service Cloud) would be able to connect it to Twitter, the social networking service where users post short messages.
It works something like this: a customer service rep can monitor conversations occurring over Twitter, while, at the same time, analyzing data in their Salesforce.com app to help answer questions about a product. The answers to those questions can be posted to Twitter by the rep, or, provided the technology is in place, to the frequently asked questions section of a company website.
The Service Cloud product already has such a feature for Facebook conversations, so the emergence of businesses building a marketing and customer service presence on Twitter made sense to Salesforce.com executives as a next logical step in helping companies figure out how to utilize social media outlets.
"Companies are wrestling with social media," says Kraig Swensrud, Salesforce.com's vice president of product marketing. "Many don't know how to interact with these sites yet, and as a result, they're losing touch with their customers. Today, it's not a matter of investing in the call center. They need to expand customer service to where they're communities are now living, which is places like Twitter, Facebook and Google."
A symbiotic relationship with the latter company began years ago, establishing Salesforce.com's first significant step in partnering with powerhouses on the consumer Web. In June 2007, Salesforce.com announced that its core customer relationship management (CRM) software, which is used by sales and marketing people to track their clients' information, could be used alongside Google Ad Words, which allows companies to advertise their products on Google by associating them with specific keywords.
In April 2008, the two companies announced that any customer of Salesforce.com could add Google Apps to their existing CRM software for free. Google Apps is Google's Web-based software for businesses (a competitive product to Microsoft Office) that includes Gmail and instant messaging, as well as basic productivity apps like Documents & Spreadsheets.
After its Google alignment, Salesforce.com felt emboldened to push further into the consumer Web. In November 2008, at Salesforce.com's annual Dreamforce event in San Francisco, the company's CEO Marc Benioff shared a stage with Facebook COO Sheryl Sandberg, unveiling a product that allowed developers to build enterprise applications for Facebook using Salesforce.com technology.
While Facebook leaders remain consumer focused (and will for a long time), they welcomed the partnership as an acknowledgment that social technologies will change the way people consume and use technology at work. Because Salesforce.com was a pioneer of the idea that people could access business applications on the Web instead of installing them on their company's machines - a process often referred to as software as a service or cloud computing - its products became a logical fit for emerging technologies on the Web like Facebook.
"The reason we partnered with Salesforce.com is we believe by working with the business community, by working with CIOs and people who run businesses, we can help understand the needs of their users," noted Dave Morin, Facebook's senior platform manager, during an interview with CIO at Facebook's headquarters back in January. "Salesforce.com has really been pushing the limits in delivering software as a service and they have a great cloud computing platform that makes cool apps."
Salesforce.com, for its part, holds a definition of cloud computing that isn't limited to the enterprise-focused software market it competes in along with Microsoft, Oracle and SAP. In many ways, Salesforce.com's strategy seems to include all the moving parts of the Web - search, social networks, instant messaging - as coming together in one unified view for workers.
"It's not only the movement for companies to subscribe to services like ours, but all of them, whether it be Facebook or Twitter or YouTube or Google," Salesforce.com's Swensrud says. "It's about making all these services work together so we can collaborate and communicate."
Beating the Old Guys
The efforts by Salesforce.com's competitors to make their products more social and Web-friendly have either been speculative or half-baked in their conception. Oracle hinted that its newest package of software, called Fusion Applications, would include social networking and "Web 2.0-like" features, but customers will have to wait to see them. Fusion won't hit the market until 2010 at the earliest. In February, SAP launched its "Business Suite 7" software product, in which SAP executives, with a mouth-full of jargon, alluded to "Twitter-like" functionality in parts of the next-generation software suite," but that won't be ready until late 2009.
Analysts say Salesforce.com's competitors have struggled to incorporate consumer Web applications due to their business models and technology foundations. Oracle and SAP garner the majority of their revenue from on-premise software (which customers install on their own servers and computers). Salesforce.com, on the other hand, runs purely on the Web. For customers of Oracle and SAP, this antiquated model presents technological challenges in hooking their on-premise software up to Web-based applications like a Facebook or Twitter.
"It's just generally easier to do with Salesforce.com because [the software] is more open," says the Yankee Group's Kingstone.
Paul Greenberg, an analyst from the 56 group, says that Salesforce.com has not only been innovative in fashioning the proper technology, but smart in its approach to start with customer service (instead of sales) when it comes to connecting its products with social networks. Social networking users, especially on Twitter, don't want to be sold to directly unless they ask for it. Instead, they want to have conversations with companies about their products.
"The Twitter-verse would not respond well to pushing sales down that channel," he says. "When push comes to shove, the uber-benefit of dealing with these external social channels is customer service."
Many companies have had success using social networking applications, specifically Twitter, to respond to customer inquiries. Frank Eliason, a customer service representative from Comcast who runs the Comcast Cares Twitter page, has become a notable figure in social media circles by responding to messages concerning the cable company's products. He says he has been in discussions with Salesforce.com about its Cloud Services product, because, in addition to social networking add-ons, it works with core customer service technologies that have existed for years.
"We are not using it at this time, but we are working with them and sharing our expertise," he says. "We would consider it. It is nice because it integrates the variety of communications channels a customer may choose such as phone, email, chat or social media, such as Twitter. It also helps to align the data from each method."
