Third Idea Consulting

[Edited for some small inaccuracies. My bad.]

I recently had the pleasure of attending Sage Analyst Day 2011, hosted in Boston on February 9, 2011. A select group of industry watchers got to hear about plans for Sage North America in the coming year, especially its CRM product line.

One early order of business was to announce (reiterate, actually) the pending retirement of Sage North America CEO Sue Swenson later this year, after nearly three years of service. While I didn’t get many opportunities to speak to Swenson directly during her time with Sage, I was impressed with her focus on moving her division forward, and her success in achieving her goals during a bad stretch for the global economy. The company returned to revenue growth in the second half of 2010 under her leadership.

This summer (the guess is mid-June) Swenson will hand over control to CEO-designate Pascal Houillon, a 20-year Sage veteran who has served as the head of operations in several European countries. His stated primary goals are to match the company’s product line with its customer base more effectively; to make the Sage brand better known on this side of the Atlantic; and to return the company to making acquisitions as opportunities present. Likely targets are Web-based and connected services vendors, as well as regional specialists.

Your ears might have perked up at that last bit about connected services and Web services. I know mine did. Sage has been inching toward the Cloud for a few years now, but it looks like the pace is about to accelerate.

Sage Advisor

The first piece mentioned was Sage Advisor. Users of Peachtree—sorry, Sage Peachtree—will recognize it from a function they’ve had access to for four years. Advisor is a cloud-based data mining tool and recommendation engine, collecting more than 500 data points and using them to provide advice to the user. The advice is delivered (depending upon context and preferences) via Sage employees, a virtual assistant, and in-product chat.

Sage Advisor exists to “create a personal connection to Sage brands for every user,” according to the company. It’s not just about selling more software to expand Sage’s footprint with its customers; Advisor can point out existing (read: already-paid-for) capabilities that aren’t being used and could help with a given task, and can also tell users how to turn off certain functions to streamline their workflow.

Many of you read the words “virtual assistant” and had a bad flashback to Clippy, Microsoft Office’s much-maligned helper. Sage Advisor appears to be much less intrusive, and the company claims more than 90 percent of its Sage Peachtree customers are opted in to the service.

Another function of Sage Advisor is to provide client data to Sage and its partners about usage patterns, third-party applications in use, system specifications, popular reports, and more. Sage predicts this could increase close rates for partners 60 to 70 percent.

Sage Connected Services

Connected services is Sage’s umbrella term for discrete applications provided to its customers (both on-premises and SaaS) via the Cloud. Many will integrate through SData, Sage’s new open-standard Web protocol which allows front- and back-office applications to communicate better with each other and with other apps.

This will be a major area of expansion and advancement for Sage, adding capabilities from the cloud in a modular fashion to serve up what customers need. Payment services, legal counseling, tax compliance, lead generation, and shopping carts are just some examples Sage provided.

Services will be delivered within the main Sage application, with Sage Advisor identifying and suggesting appropriate apps, making it something of an app marketplace. Because SData is an open standard, there is a large opening in connected services for third-party providers, and for integration with non-Sage products. Look for a Google Apps integration very soon.

Acceleration Squared

Sage’s foray into cloud services creates an excellent opportunity for growth, if it can manage the potential chaos. With SData, Advisor, and connected services all turned on, Sage partners and customers will have greater access to the company than ever before, and that’s saying something. Demand for new functions and new products can be watched in real time, and the delivery time is considerably reduced. Sage will be drinking from the firehose in a way that only SCRM- and cloud-savvy companies can; if it uses that information and the dynamic strength of an involved community, we will see a very different Sage by this time next year.

For another (and quite excellent) discussion of Sage North America’s Analyst Day, see Denis Pombriant’s recent article for CRM Buyer. Denis has been watching Sage for longer than I have, and he’s one smart cookie.

Note #1: This is not the second part of the comparison article between RightNow Technologies and Salesforce.com. I’ll write that next.

Note #2: A disclosure. As with most conferences, the host (in this case Salesforce.com) paid for my flight, lodging, a few meals, and some entertainment.

Welcome back, my friends, to the show that never ends

This year marked the 8th annual Dreamforce conference, a gathering of Salesforce.com partners, customers, and observers at the Moscone Center in San Francisco to see what the software-as-a-service pioneer is up to. This year was the largest one yet, as attendance has risen steadily with the growth of the company and its influence. when I first attended in 2005, I think there were 6,400 attendees; this year there were more than 30,000.

I’ll get this part out of the way, because it’s subjective and because I’ve said it before: Marc Benioff (the founder and CEO, for the three people reading this who didn’t know that) is a heck of a showman. Many vendor conferences are built around the idea of news and advances, but Dreamforce is always about energy and enthusiasm. There’s plenty of news here too, but the first order of business is to get the crowd fired up. The exact same company-product-service would likely not have achieved its current level of success in somebody else’s hands, because Marc knows how to play to the crowd and to the media. He also knows business and software, so it’s not like he’s just a pretty face, but he leads with his personality.

So what happened?

There were four main announcements to come out of Dreamforce ‘10, at least from Salesforce itself—the show has become too big for any one person to have a realistic hope of covering all the partners. Of the four, two were what I would call minor (changes to existing relationships or services) and two major (new ventures). We’ll hit the former first.

First thing was showing off full integration of Jigsaw, a provider of crowdsourced contact data for businesses which Salesforce acquired in April of this year for $142 million. Jigsaw was formerly a Salesforce partner, and its app integrated fairly well with Salesforce CRM, but the combined entity is a step up. Jigsaw data automatically populates the fields, so blank lines in a contact record should be a rare thing. Users can provide new or updated information to the system, so there’s no need to separately maintain it—your contact records are the world’s contact records, at least insofar as you make them public.

The second minor bit was the introduction of Chatter Free. Chatter is Salesforce’s social networking service that allows your employees to communicate in a secure Facebook-like environment. The free version is—you guessed it—free, and allows Salesforce users to invite any colleague to join whether or not they use Salesforce themselves.

Up to the majors

The previous two announcements definitely matter to Salesforce and those who use it, but the following two will be what drive speculation and interest for the next few months. Therefore, I’ll devote more space and detail to them. (What, you didn’t think I was writing a short blog, did you?)

There’s a new cloud in town, and its name is database. Database.com is a standalone open-standards database in the cloud. The PR copy says it can run on any platform, in any programming language, on any device. It’s a relational database that can swallow both structured and unstructured data, and can serve as the backbone for apps in use by many thousands of users simultaneously. And it’s secure down to individual rows.

Salesforce can claim this because database.com has been in beta for the past 11 years—it’s the productized version of the database used to power Salesforce.com itself. There’s no sense in me listing all the features it promises, so here a link to the database.com FAQ. It’s getting a push from early-adopter pricing as well: The first 100,000 records are free, as are the first 50,000 transactions per month, for up to three users (the ones who actually work with the database). After that, it’s $10/user/month, plus $10/month increments for each 100,000 records or 150,000 transactions.

You might think the big deal here is the reasonable pricing, or the fact that Salesforce is opening itself up for somebody to make a competing product using its own infrastructure. What I think is most telling is the open standards. Salesforce has resisted open source and open standards for years, claiming its own APEX development language was open enough, being similar to Java and freely available to anybody who wished to develop apps for it.

Users and critics still clamored for the option to use actual Java, or PHP, or some other open-standards development language, and now Salesforce has conceded. This means anybody can write Salesforce apps, or port existing code into it. The barrier to entry has never been lower.

[UPDATE: I've been informed by Denis Pombriant of Beagle Research Group that database.com doesn't support SQL and doesn't run on any platform other than its own servers in the cloud. This is important information which I missed, so thanks.]

Big Deal Number Two is the announcement of intent to acquire a company named Heroku for $212 million. If your first response is “So what?” then don’t feel bad—I felt the same way until I read deeper. Programming languages and development platforms aren’t my specialty, but this is big.

Heroku is the leading development platform for apps built in Ruby, the language at the heart of many popular social media cloud apps. You may have heard of some of these apps: Hulu, Twitter, and Groupon are the three easiest to pick out of the 105,000 created via Heroku.

Let me be crystal clear about the significance of these two announcements. Salesforce.com is making its own on-demand database technology—which supports its own service and everything on AppExchange—available to anybody with the smarts to type some code. It also has acquired the favorite development tool of some of the farthest-reaching social media apps in the world. In essence, Salesforce.com has just turned itself into a fire hose that sprays the future of cloud computing.

If nothing else had happened this week, this would still have been enough. I’d like to point out that it’s not all business over at Salesforce.com, and call some attention to the philanthropic efforts of the company. Marc Benioff is a firm believer in the 1/1/1 philosophy, donating one percent of Salesforce.com’s equity, time, and products/services to good causes—something that really adds up with a billion-dollar-plus organization. The current project is working with UCSF, including endowing a children’s hospital [UPDATE: I should have mentioned this was with his own money] and building a new research campus. Good stuff.

Tune in later this week (or early next, because I’m a little busy) to see part two of my message comparison between Salesforce.com and RightNow Technologies.

[Disclosure: RightNow flew me out to its annual summit and paid for my meals and lodging. The following represents my informed opinion, provided without request by the organization or anybody else.]

There are a few really huge names in CRM, but sometimes it’s the not-quite-as-huge names you need to look out for. While it would be disingenuous to suggest RightNow Technologies is anything other than big, the company is often overshadowed in the media by certain others (I’m thinking of Salesforce.com) that are more adept at controlling the conversation. I’d like to evaluate the offerings and the messaging of RightNow, divorced as much as possible from comparison to its rival.

I’d really like to do that, but I’ve got to be honest—I’d probably have to give up the attempt at some point. While RightNow doesn’t define itself in terms of Salesforce.com, and its messaging places Salesforce as one of many competitors depending on the specifics of the engagement, Marc Benioff’s billion-dollar-plus concern is the first name most people think of when considering CRM in the cloud, socially enabled or otherwise. If there’s any company to compare to RightNow, it’s that one.

If time weren’t a factor, I’d delay this post until after Dreamforce—Salesforce.com’s annual convention—early this December, and put the two companies head-to-head the way I did with Sage and Nimble. Waiting six weeks or more isn’t a great plan either, and it would let my fresh thoughts go to waste in the interim. I want to be fair to both companies, so here’s my plan: I will tell you about RightNow as planned, and revisit the topic after Dreamforce to provide updated insight on Salesforce.com. Both teams get a turn at bat, and players on either one are welcomed to comment and argue.

RightNow comes from a contact center background, and it shows in its approach to CRM. The message is about customer experience as enabled by CRM; CEO Greg Gianforte says the company’s mission is “to rid the world of bad experiences.” He doesn’t shy away from the CRM moniker, though, as many other vendors have done. Customers spend most of their lifecycle in the hands of customer service (what a surprise!), so it seems natural to base a CRM effort there. I respect this approach, though the history of CRM is sales force automation (SFA), something that’s clearly in Salesforce.com’s DNA. If businesses exist to sell products and services to customers, SFA is what you want. If businesses exist to serve customers, then you start in the contact center with customer service and support.

I need to check my dates and figures to be sure, but I think Salesforce.com was the first company, at least in this group of two, to make social media part of its message. The AppExchange is a community-driven marketplace, there are Salesforce integrations with social media such as Facebook and Twitter, and much of the newer functionality of Salesforce CRM uses a social networking model for internal communications. RightNow followed soon after with CX Suite, which integrates social media with everyday customer-facing processes. The companies have similar capabilities if you pick the right modules and options, with RightNow providing more reporting depth but Salesforce having the edge in dashboard presentation.

That said, the two companies have a very different approach to integrating social CRM. Salesforce has, for a long time now, presented itself as a toolbox or model kit. If you want live integration with your customers on Facebook, there’s a module for that. Want to rank and discuss enterprise content? You can do it. And if it isn’t available as a core piece of Salesforce CRM, you can get it on the AppExchange. RightNow CX Suite is also a toolkit, but it assumes you want to get close to your customers from the outset. Where Salesforce says, “You can do this if you want,” RightNow asks “Why aren’t you doing this already?”

One of the places the difference between RightNow and many of its competitors is clear is their customers. Now, everybody has great customer success stories—if you can’t get that in the CRM industry, you won’t last long—but RightNow’s feel different, in a good way.

With Salesforce.com, and every other vendor for the most part, the customers we get to interview feel like they’ve been prepared. They all have bullet points to hit, and specific ROI results they want to mention. (Note: When a writer is planning a case study, these things are important, so it’s not like I dislike specifics. But in a general purpose interview, it’s not as necessary and can even be distracting.) In Salesforce.com’s case, it’s important to have this kind of preparation, as that company tends to announce a lot of new features and options multiple times before they’re generally available, and then there will be follow-up press releases to remind us that module X has been out for a while. If Salesforce doesn’t vet its reference customers, there’s a fair chance the interview will go off the rails because we’re talking about different things.

RigtNow’s customers aren’t prepped much, if at all, because RightNow doesn’t have a never-ending list of preannouncements. I spoke with two great RightNow customers at the recent summit, Kim Rundleof Organic Valley and Rich Brecht of J&P Cycles. In both cases, the conversation was as natural as if we’d just met at a networking event and decided to talk about CRM. Well, it felt kind of like that, but with way more enthusiasm. This is how it is whenever I talk to a RightNow customer; I had an informal chat over lunch with Boyd Beasley of Electronic Arts, and it was a very similar experience. Each representative had things they liked, frictions with some stakeholders, and hopes and plans for what to do with their RightNow system in the future, but it all felt natural.

This difference in RightNow’s and Salesforce.com’s approach to customers is indicative of deeper differences in how the two companies deal with messaging. I’m going to come right out and say that Salesforce.com controls the conversation when it comes to SaaS CRM. They announce constantly, keeping their initiatives fresh in our minds. The press releases are usually worded dynamically, so you won’t dismiss them right after you start reading. And Salesforce.com is at the stag where each announcement is for a discrete element of the overall solution, so you know what you’re getting.

By contrast, RightNow is very low-key about its announcements. Typically, there’s an announcement that something is in development, and the next time you hear about it is the GA press release. Whatever the new item is, it’s always presented as an update to the existing RightNow suite, since users of RightNow seem more likely to use the whole thing than the typical Salesforce mix-and-match approach. RightNow also has terrible luck with timing, because its announcements are usually either preceded or followed immediately by a piece from another vendor. It’s usually Salesforce, so I think that’s a matter of strategy and a loud voice combining to good effect. This means that the RightNow story—both the specific product-related one and the “company narrative”—can become lost if the journalist or analyst doesn’t stay focused on it. I’ve found it difficult to do, and I’m aware of the issue; others who aren’t as clued in have little hope.

That’s it for Part One. I’m looking forward to reacquainting myself with Salesforce.com’s side of the story this December.

Yesterday I had a quiet lunch with Marc Benioff and 300 of his closest friends at the Mandarin Oriental Hotel in New York, off Columbus Circle. Well, maybe it wasn’t exactly quiet, and I don’t think Marc actually ate anything, but the fact is he was there. So was a large chunk of the Salesforce.com management, several partners, and a lot of customers.

The purpose, I think, was to get some excitement going for the Dreamforce conference next month in San Francisco. Discussion centered on developments in Service Cloud 2, the company’s social CRM approach to the contact center.Much of the presentation was covering stuff I already knew about, such as the various parts of Service Cloud and the partnership with Cisco that lets Salesforce.com be part of a unified communications environment. Since the audience wasn’t exclusively press and analysts, I have to assume the goal was to put all the information together for the public to show that SFDC will probably be making a major push for contact center business.

One truly new thing (to me, at least) was the announcement of five-minute upgrades. Contact centers can’t afford downtime, and one of the things that has held back adoption of SaaS contact centers systems is the lack of control over when that downtime hits. SFDC will be able to update its customers’ instances in minutes instead of hours, which should go a long way toward making it a more attractive option. Integrating with Cisco, a respected force in communications technology, doesn’t hurt either.

The event may have answered the “what is Salesforce.com up to?” question for most of the attendees, but it created more questions for some. A few of us (CRM magazine’s Josh Weinberger and Yankee Group’s Sheryl Kingstone) were wondering what the threshold is for SaaS update speed. Is it five minutes? Two minutes? Thirty seconds? More important, we couldn’t figure out how the partnership will make SFDC its next billion dollars. Josh spent a good half hour grilling Alex Dayon (senior VP of customer service and support products) about how SFDC and Cisco could each profit from the arrangement—they’re splitting a relatively small pie.

It’s not my biggest worry how they earn their bread. I’m more interested in them making social CRM in the contact center work for customers as well as businesses. When viewed from that perspective, Marc’s got an exciting product to roll out, and I’ll be watching closely.

Disclosure: I have some stake in this discussion, since I will be part of a panel at Dreamforce on Why Collaboration Between Sales and Service Is Imperative in Today’s Economy. If you’re in town, the session is Thursday Nov. 19 at 2:30pm.

More about this as it develops. Tonight, I’m out to dinner with Tealeaf and a roomful of people to hear the results of the 2009 Survey of Online Consumer Behavior. The state of online customer experience is our topic for the evening, and you just know I want to get the details.