"Every new paradigm needs a leader to articulate the industry’s guiding values and contribute the tools and platform to enable success. Microsoft and Intel stepped into a major leadership vacuum in the PC industry in the 80s. That was a critical step for the maturation of the technology industry. We are trying to do the same thing for multitenant on-demand services."
Mark Benioff, Interview with M.R. Rangaswami, Sand Hill Group
The idea of a 'platform' for 'multitenant on-demand services' is certainly appealing to thousands (perhaps hundreds of thousands) of current and future SaaS ISVs. And who wouldn't want to leverage the investment in on-demand infrastructure made by SaaS pioneer Salesforce.com. After reading the Mark Benioff interview on SandHill.com, I made it my business to attend the Salesforce.com Apex platform launch seminar held on January 16 in San Francisco, an all-day event in which the company would be showcasing it's ongoing transition from on-demand CRM provider to on-demand 'platform' provider.
The marketing message from the keynote addresses by Mark Benioff and George Hu (Salesforce CMO) reverberated with the popular Web 2.0 message of 'you-ism', proclaiming that 'you can be the next Salesforce.com'. One slide showed logos from YouTube and other 'You-centric' consumer services, while another slide included the recent Time Magazine Person of the Year Issue (You of course). Another slide displayed the logos of Microsoft, Oracle and SAP, who were referred to as part of 'the past'.
After the keynotes, and hearing Salesforce's classical 'disruptive technology innovator' messaging targeting incumbent market leaders, I decided to walk the expo floor, and then attend the partner breakout sessions, in order to validate for myself the core value proposition touted for the Apex platform, i.e. that "you can be the next Salesforce.com". Here's what I experienced.
Apex Platform Demos
As I went from booth to booth, demo to demo, to experience the range of partner applications built on top of Apex, I kept consistently noticing the same user experience, over and over again. Once one proceeded past the partner's start page I kept seeing the following two things:
1. The URL of all successive pages shown by Apex partners was "xxx.Salesforce.com", and
2. Salesforce branding occupies a relatively large portion of the upper right hand corner of every page.
As someone who was attempting to validate the core Apex platform value proposition of "you can be the next Salesforce.com", I have to say this was a dramatic disconnect. The persistence of the Salesforce URL told me that at least as far as the demos on the show floor were concerned, I was not seeing a true platform for 'multitenant on-demand services'.
And while I wouldn't take issue with the creative messaging of Salesforce.com CRM as the 'end of software', the industry as a whole has not reached the end of software nomenclature. So words like 'multitenant on-demand' platform still matter, especially in competitive positioning and messaging.
Additionally, the in-your-face persistence of the Saleforce branding was troubling to me, and I did not see how any SaaS ISV could really become the 'next Salesforce.com' in the future if the actual Salesforce.com in the present was staring their customers in the face at every mouse click. Hoping I was misreading what I was seeing, I decided that I would raise these issues with the executives leading the partner breakout sessions.
Partner Breakout Sessions
During the Q&A portion of the first partner breakout session that afternoon, I asked the presenter about what I was seeing down on the expo floor, and that I was at a loss to understand how any SaaS ISV could actually ever become the 'next Salesforce' if the Salesforce URL and branding were persistent during the partner's user experience.
I pointed out that my own conception of a 'multitenant on-demand platform' was more in line with an 'on-demand OEM' or 'powered by' approach that would enable the ISV partner to completely control user experience, brand identity and proprietary enhancements. I have yet to meet a marketing executive worth his or her salt that can afford to allow these key aspects of the user experience to be set by the platform provider.
To his credit, the Salesforce partner program exec did not dodge the question or in any way attempt to spin his answer. He candidly pointed out that Salesforce has "less than 10" on-demand ISVs using the Apex platform in the way I had suggested, but that in the future, it was expected that this number would increase. He clarified that in 2007, the partner focus would be on ISVs writing web services and composite apps that accessed customer data in the Salesforce.com CRM application, partners that were attempting to leverage Salesforce.com's current base of customers for their own market success. Fair enough.
So what did I conclude from my experience at the Apex platform launch event?
In 2007, You Can NOT Be the Next Salesforce.com
At this point in time, Apex is not in the main a general purpose multitenant on-demand platform designed for SaaS ISVs who want to control their own marketing destiny. And judging by the quality of streetsmart CEOs who approached me sharing similar concerns after I posed my question in the partner breakout session , I have to say that in 2007 Apex is more 'platformula' than general purpose on-demand platform. The capabilities and infrastructure may be in place under the hood, the roadmap is there, the formula for true native business web apps is there, but Salesforce has not 'popped the top' (a phrase used by Benioff in his keynote) off their CRM system if less than 10 on-demand ISVs are live. But on the other hand, there is a much larger question to ask and it is this.
If Apex is not platform but platformula, can one at least conclude that it is a 'platformula for success'? Based on the quality of their partners, I would have to conclude that it is absolutely a formula for success. But not really comparable to the Microsoft/Intel platform model referenced by Benioff in the Sand Hill interview.
Rather, Salesforce has provided a highly valuable, general purpose web services interface to their CRM system and the extremely valuable customers who use it, not unlike Amazon.com has done with its various web services initiatives that leverage both the Amazon commerce platform and Amazon-stored product and community data. And with 180,000 plus web services developers to its credit, Amazon is on track to make this approach pay off.
The upside. The current Apex 'story' is a messaging and positioning disconnect common in the software industry. It sells the 'hype cycle' when it should sell the 'virtuous cycle'. The quick fix? I'd urge the Salesforce executive team to get past the Microsoft/Oracle/SAP bashing, quit invoking the consumer 'You-marketing' crowd, and tweak their positioning and messaging around Apex to reflect the Amazon model, not the Microsoft/Intel model. In the age of the internet, the Amazon platform definition and model may actually turn out to be a better model for Salesforce to invoke, a model in which the 'platform' must include the real-time data to have value.
The downside. If I can raise the issue of platform vs. platformula (which used to go by the term vaporware prior to the dawn of the 'end of software' generation), so can the marketing organizations at Microsoft, Oracle and SAP, those cross-category, natural monopoly software superpowers who Salesforce believes live in the 'past'. As I point out in my book "Asymmetric Marketing: Tossing the 'Chasm' in the Age of the Software Superpowers", Microsoft, Oracle and SAP are all adept at coopting disruptive technology innovation, including open source, on-demand and Web 2.0. They in no way, shape or form 'live in the past'. They live in the competitive here and now.
So if the software superpowers do choose to make a big issue of Salesforce.com's 'multi-tenant on-demand platform' messaging, the marketing 'past' may once again become marketing prologue. Prologue to an on-demand future less kind to the marketing message of pioneer Salesforce.com.
Mark, George...Don't say I didn't warn you.
Thanks for your post - while I don't agree with everything, I think its a thoughtful look at Apex. On the specific point of seeing "*.salesforce.com" as the URL in the partner apps, this is a technical artifact and not a branding one. While it would be a nice feature to allow us to map other URLs to the salesforce.com servers (and one for the list!), its not a simple as mapping the domain to a Web server, as is common with hosting companies - that said, there are other integration models with Apex, and I'm willing to guess you've used an Apex powered app in the past without knowing it. Beyond that, I'd welcome the chance to show you what is possible in terms of UI customization / branding today, and what we are hoping to provide in the future.
Posted by: Adam Gross | January 21, 2007 at 09:22 PM