View From Above » Salesforce.com

Salesforce and Oracle struggle with change

Ron Miller — Thu, 04 Oct 2012 17:47:51 +0000

As Oracle and Salesforce wrestle with one another, both companies are struggling to deal with a changing market.

Salesforce and Oracle both recently completed their user conferences in San Francisco. They were both splashy, well-attended affairs with 50,000 attendees at Oracle Open World and 90,000 at Dreamforce, but both companies showed signs that with great size, it becomes harder to maneuver quickly in a changing market.

If you want to go by pure numbers, then Salesforce won that game at their conference, but it’s not that simple of course.

Make no mistake, these are both big, successful companies, but they each have flaws and reacting to change is one of them. Due to their sheer size, it makes it all that much harder to make adjustments to changing markets and trends.

Let’s look first at Oracle, which made its mark in the age of large, complex enterprise software packages. It used its wealth to buy up a variety of software niches including content management, CRM and enterprise search (to name but a few), using its riches to check all the necessary boxes. But what it didn’t anticipate is the company down the street that was building its own empire in the cloud where it was less complex and easier to manage.

It took a long time for Oracle to see the light because after all going to the cloud was completely against the entire focus of the company. They wanted to own the data center, but were wise enough to realize that for many companies, the data center was beginning to shrink because they were moving at least some of the operations to the cloud.

Oracle may be stubborn, but it’s not stupid and starting a few years ago began offering the first cloud services. They have recognized they need to offer services in the cloud, but what’s not clear is if they can create cloud products that their market wants while still trying to protect their core enterprise software business.

It’s a dilemma that many disrupted companies face as they try to live between two worlds and don’t really grasp the new one very well, while the old one is diminishing in market importance creating a strategic dilemma.

Salesforce has played the role of great disruptor, but as we have seen this year with Craigslist, as the original disruptors go mainstream, they too can be disrupted and become just as slow to react to changes around them as Oracle has been.

And so we have Marc Benioff at the recent Dreamforce conference talking about “discovering” the value of social in the enterprise, and how for him, the light just went on even though social has been in the enterprise for years now. The problem isn’t that Benioff hasn’t understood the value of social. His company has been making purchases of its own including tools like Buddy Media and Radian6 for social media monitoring, but Salesforce has been late to social, just as Oracle was late to the cloud.

As these two giants face off against each other, I wonder if each of them can be flexible enough to keep their core businesses intact while reacting to the changes around them. It’s going to be a huge challenge for each of them and it should be fun to watch.

Photo by emdot. Used under Creative Commons License.

Salesforce Finally Makes Total Mobile-Cloud Connection

Ron Miller — Thu, 20 Sep 2012 20:44:18 +0000

After all these years as one of the premiere cloud vendors, Salesforce.com finally gets the enterprise cloud-mobile-social connection.

The primary focus of this blog has always been the link between mobile and cloud and to a lesser extent, social — the idea that you can get your content anywhere regardless of your location or the device you are using. As one of the original cloud vendors, you would think Salesforce.com would understand this at a fundamental level, but until recently, they have only begun to understand the mobile and social components.

Salesforce began building the social components over the last couple of years with purchases of Buddy Media in June and Radian6 last year. As Cathy McNight of Digital Clarity Group told FierceContentManagement at the time, “Salesforce.com’s acquisition of Buddy Media puts them in a leader’s position in the quest to bridge the social-enterprise divide.”

Then came Chatter of course, the SDFC socal component. In August, SFDC announced Chatter Communities and last week Benioff let the cat out of the bag at TechCrunch Disrupt that SFDC was about to launch a Box file sharing and collaboration tool competitor called Chatterbox.

And if you doubt the company’s commitment to the cloud-mobile-social connection, consider SFDC’s other services, Do.com and Work.com, which also make it easier to share and gather project information in the cloud and across mobile devices. That they lacked a dedicated file sharing program at this point, was actually quite a surprise, but it was also a surprise that while praising Box at TechCrunch Disrupt, Benioff revealed his company would now be competing with it.

In his keynote address at Dreamforce this week, the massive SFDC partner and user conference, Benioff addressed the idea of the cloud-mobile-social connection as though it were something that Salesforce just discovered and that nobody else had thought of it yet.

You expect high-sounding rhetoric at a conference address like this one, but the fact is that there have been plenty of companies making that same connection for a long time. In fact, I launched this blog in December of 2010 with a post about that year’s Dreamforce conference as an example of the quintessential cloud company — which I still believe to be the case.

But I assure you that I didn’t invent the mobile-cloud idea at the end of 2010 either. It was something that had been stirring for quite some time, and it was precisely because of the trend that TechTarget asked me to start a blog about it.

Salesforce simply recognized what has been obvious to any of us cover this space, that companies need a number of tools to operate in today’s mobile world. They need smartphones and tablets and they need apps that run on those tablets and give them access to enterprise content wherever they may be, and finally they need to be able to share and collaborate in the cloud. The cloud is the glue that holds this all together. You can’t be mobile or social if you’re not in the cloud — at least not effectively.

Salesforce has finally seen the light. Chances other vendors — large and small — won’t be far behind.

Photo by piyush.k on Flickr. Used under Creative Commons License.

Excuse me If I’m not Dazzled by the Oracle Cloud Announcement

Ron Miller — Mon, 11 Jun 2012 13:16:24 +0000

When news broke last week that Oracle had decided to join the 21st century and launch a cloud product in order to take on the likes of the highly successful Salesforce.com, my first was reaction was that it was about 10 years too late the game.

Can a traditional enterprise software and hardware company suddenly compete in the cloud? I think not.

Don’t get me wrong I find the idea of the dinosaur software and hardware company taking on the preeminent cloud computing vendor (and one of the earliest examples) to be highly entertaining. Oracle is the poster child for traditional enterprise software implementations. It is the polar opposite of what you think of when you think about cloud services.

It’s complex instead of simple. It’s expensive instead of cheap. It’s hard to implement instead of easy. It requires significant resources to install, configure, maintain and manage. In short, it’s everything cloud is not — yet now Oracle wants to be your cloud vendor.

Does anyone else see a major disconnect here?

Let’s not forget, up until his company jumped into the fray, Ellison has gone out of his way to make fun of cloud computing. In 2008, he was quoted in a Guardian article as calling it complete gibberish in this delicious quote:

“Maybe I’m an idiot, but I have no idea what anyone is talking about. What is it? [The Cloud] is complete gibberish. It’s insane. When is this idiocy going to stop?”

Maybe he’s evolved in 4 years. Who knows? But it’s also impossible to ignore the recent Google/Oracle patent trial around Java appeared to be a full-scale attack on cloud computing.

So when that tack failed, Oracle did an about face and decided to embrace cloud computing instead (or perhaps it was just trying to clear away the competition ahead of its announcement).

But anytime a company the size of Oracle gets involved, it has to make the competition pause. Perhaps that’s why Salesforce made a big acquisition last week when it purchased Buddy Media just days before the Oracle announcement. (Coincidence? We think not.)

Brent Leary, who is co-founder and partner at CRM Essentials LLC, a CRM consulting/advisory firm focused on small and mid-size enterprises, says it’s never too late for a company the size of Oracle to take a shot.

“I think we’re too early in the game to say anything that happens now is too late. But that doesn’t mean companies can wait around to make moves,” he said.

He added, “Historically Oracle is an acquisition machine, but now with Salesforce joining the arms race the purchases seem to be accelerating. There’s a lot at stake here, and the companies who can quickly add and integrate missing pieces to their cloud puzzle stand to gain significant mindshare.”

True enough, but can a company built as a traditional hardware and software company really take on a vendor who has built its cloud business from the ground up? My feeling is that this is going to be a very difficult transition for Oracle, regardless of its market clout, precisely because it has built its business up to now as being the anti-cloud.

Time will tell if Oracle can compete, but my gut tells me this doomed to fail because Oracle while trying to move to the cloud still must protect its core software and hardware businesses — and it’s going to be tricky balancing those two competing requirements.

Photo courtesy of Oracle OpenWorld San Francisco 2009. Used under Creative Commons License.

Cloud Rising in the Enterprise

Ron Miller — Mon, 28 May 2012 19:13:37 +0000

As cloud vendors accomodate the needs of IT pros, cloud computing is taking a firmer hold in the enteprise.

Earlier this month, Salesforce.com announced some impressive quarterly numbers. Last week Box announced new administrative tools aimed squarely at IT and EMC announced it had bought file sharing and syncing service Syncplicity.

What do all these announcements have in common? They all show that the cloud is finding a comfortable place in the enterprise.

Let’s start with Salesforce’s earnings announcement. Salesforce is in many ways the grandfather of the Cloud computing movement. It alone proved that companies would be willing to put sensitive data on someone else’s servers — and when you’re talking about your customer information, that’s pretty sensitive.

Although Salesforce reported an overall loss for the quarter, it beat revenue projections and is looking at $3 billion in projected revenue for the year. According to ZDNet, overall Salesforce beat expectations:

“Salesforce reported a first quarter loss of $19.47 million, or 14 cents a share, on revenue of $695.5 million. Non-GAAP earnings were 37 cents a share. Wall Street was expecting non-GAAP earnings of 34 cents a share on revenue of $678.2 million.”

Meanwhile Box, which has always tried to separate itself from consumer-oriented services like Dropbox and Google Drive made a significant announcement when it released a Beta version of a new set of administrative tools that give IT more insight into how users are accessing and using content, more sophisticated audit tracking for regulated industries, better device control including the ability to add a device password, and finally, new enterprise licensing plans to provide customers with a more predictable pricing model.

These moves further cemented Box’s enterprise orientation, and these types of tools may make more enterprise customers comfortable with a cloud approach to file syncing and sharing, as well as collaboration.

Finally, we have traditional enterprise software vendor EMC buying file syncing and sharing Syncplicity. With this purchase, EMC gets a tool that provides a way to access and share content across device types, while removing the restriction of being tied to the desktop to get your content.

While Syncplicity is hardly a household name, it reported it has 200,000 customers of which 50,000 are of the enterprise variety. What’s more Syncplicity includes some fairly sophisticated back-end controls, which among other things let administrators cut off access to a document or folder instantly simply by revoking permission.

All three of these announcements, each in their own way, show that enterprise software vendors recognize employees need safe and secure access to enterprise content on a variety of devices, and they are not always going to be accessing it from inside the firewall.

The announcements also show that customers are demanding and getting the kinds of tools they need, and as they do they are growing much more comfortable working with cloud tools, even for information some might consider sensitive.

It’s a matter of creating tools that give IT Pros the control they require to do their jobs, while giving users access to content and tools wherever they are on any device. It’s not an easy line to walk, but vendors appear to be taking the challenge seriously.

Are Cloud Security Concerns Overplayed?

Ron Miller — Wed, 14 Sep 2011 15:34:51 +0000

For as long as I’ve been hearing the term “Cloud Computing” the biggest concern has always been security, especially if you are handing the keys to the kingdom over to an external vendor, but I’m wondering if these concerns are overplayed to a large extent — and so is former US CIO Vivek Kundra.

The story goes if you want to secure your content, you need to keep it inside the confines of your firewall because anything less is exposing your precious data to outside forces. Now I don’t mean to minimize these concerns because certainly some companies, regulated industries in particular, have to keep these concerns top of mind, but are security concerns really valid?

It’s a question Kundra asked recently during an exchange with Salesforce.com CEO Marc Benioff at Dreamforce 11, Salesforce.com’s huge user conference. According to a report on CIO.com, Kundra, who has been a big advocate for cloud solutions in the government, belittled the idea that security was a reason to stay away from the cloud.

In fact, he sees the security argument as a red herring:

In other areas, what you get is a false choice; people erect these barriers around security and privacy, which in some ways are very unfounded. And the reason I think they’re unfounded and ridiculous in a lot of ways is because the United States government already has outsourced over 4700 systems.

And it’s a valid point. He goes onto suggest that these systems are often built by highly paid systems integrators — some of whom might have a lot at stake to spread FUD (fear, uncertainty and doubt) about cloud computing.

Yet how many private companies outsource many of their own services? How many companies for instance do their own payroll anymore? Even very small companies tend to outsource this kind of activity because it’s easier to have someone else do it. Yet that means these payroll companies have access to your employee’s names, addresses, salaries, social security numbers and a lot of other highly confidential information outside your firewall.

And yet we rarely if ever hear anyone getting up and claiming its crazy to outsource your payroll data because you could be compromising your employee’s privacy and crucial company information.

Heck, what better example of cloud computing is there than Salesforce.com. When it launched in the late 90s, did you think it would be common place a decade later to store your most important customer information on another company’s servers? Now thousands of companies, big and small, do just that.

My favorite cloud security story comes from the MIT CIO Conference in 2009. As I explained in a post on DaniWeb at the time, Rear Admiral Elizabeth Hight, vice director of the Defense Information Systems Agency fully embraced the cloud, and in fact described the first private cloud I had ever of at the time, used by military personnel in the field to access services they needed quickly and relinquish them when no longer needed.

What was interesting though was not just that the military was on the cutting edge of cloud computing, but that a drug company executive on the same panel complained the cloud wasn’t secure enough for her. As I wrote:

Panel moderator, Erick Brynjolfsson of the MIT Center for Digital Business did not miss the irony that the military, which requires perhaps the most secure network in the world was not afraid to engage in cloud computing, but the private sector company CIO claimed she was handcuffed by regulations around security.

The point being that 2 years later, we’ve come a long way, and cloud computing has matured remarkably quickly. Yet we are still being subjected to what Kundra sees as misleading arguments about security, and he may be right that it’s time to move on.

Salesforce Chatter Super Bowl Ads Incomprehensible

Ron Miller — Mon, 07 Feb 2011 12:49:05 +0000

What do you do when you have the chance to show more than 50 million people what online collaboration and the cloud is about? What you don’t do is what Salesforce.com did last night with its two half-time Chatter Super Bowl ads and that’s completely lose the point in cute cartoon characters and an obtuse message. In my view they blew a ton of money and a huge chance to educate the public at large about the real advantages of the cloud.

If you haven’t seen them, watch them now, they’re short:

[kml_flashembed movie="http://www.youtube.com/v/tdqoQ0zL7GQ" width="425" height="350" wmode="transparent" /]

[kml_flashembed movie="http://www.youtube.com/v/tcjAD-_H_rk" width="425" height="350" wmode="transparent" /]

Instead, they almost made the Bill Gates – Jerry Seinfeld Vista ads look good. You may recall that in the Summer of 2008 in a desperate attempt to save the flagging Vista operating system, Microsoft threw $300 million at hot shot ad man, Alex Bogusky, whose previous claim to fame was a series of Burger King ads. The ads were a disaster.

I’m not sure how much Salesforce.com paid for these cartoons, but like the Vista ads from back in the day, these fell flat. The idea wasn’t bad. You make cartoon look-alikes of the Super Bowl half time show band, The Black Eyed Peas. So far, so good. Only problem is nobody seems to have reviewed the copy, which lacked any sort of coherent message about what Chatter is as a product, or what the cloud is over all.

The recent Microsoft ‘To The Cloud‘ ad campaign has done a good job of at least presenting the notion of the cloud to the public at large. They might not know what it is, but they’re thinking about it. Unfortunately, the Chatter ads didn’t even achieve that much.

One of the many things the ad failed to do was determine who exactly Chatter was for. Was it for end users because if it was, I had no idea what Chatter was supposed to do after watching those ads. Heck I know what Chatter is and I didn’t get the message.

Maybe it was aimed at IT Pros or perhaps even non-technical executive decision makers. It seems Salesforce sensed that some people are worried about security in the cloud. I could tell that because the character Will.i.am clumsily left you with a take-away in the first video that the cloud is safe and secure. Right, and if you’re a decision maker without a clear sense of this product, or maybe even of the cloud itself, watching a cartoon without any clear message and a clumsy attempt to reassure me is probably not going to get it done.

Meanwhile, the second ad, which ran after the half-time show attempted to explain how Salesforce Chatter can help your business, at least I think that was the goal. The message was in there some where, but I’m not sure what it was.

Every Super Bowl ad cost a fortune, and not all them were great, but Saleforce.com had a chance to do something to really push its product and educate the public — all in a couple of quick spots. Instead, they sacrificed clarity for cuteness and delivered a message that was basically incomprehensible, failing when handed a golden opportunity to educate the public at large about the advantages of cloud computing.

Data Is The Next Cloud Frontier

Ron Miller — Mon, 13 Dec 2010 13:04:13 +0000

We heard a lot of news last week related to data in the cloud. Perhaps the biggest news was Salesforce.com’s announcement that it was launching Database.com, an online database tool. Salesforce also announced the purchase of Heroku, a Ruby-based online development platform that offer developers an alternative to Java.

Meanwhile, cloud data vendor Factual received a whopping $25 million dollars in venture capital to continue its work in providing data as a service in the cloud. What do these announcements have in common?

For one thing, it shows that data management is moving to the cloud in a big way, whether that’s providing pre-populated databases as with Factual or an environment for building database applications as with Database.com.

In both instances, they take direct aim at Oracle. An ironic side story here is that while all of this was happening Apache walked away from the Java committee. Oracle now controls Java after purchasing Sun earlier this year. The fact that Salesforce bought an alternative development platform to Java couldn’t have been a coincidence. Both moves were aimed at Oracle’s core database business.

As for data in the cloud, one key venture capitalist, Mark Suster writing in his Both Sides of The Table blog suggested that data is the next major layer in the cloud. He articulately lays out the evolution of the cloud stack (I encourage you to read this; it’s a well written and fascinating post).

Suster outlines how as each layer of the cloud has developed, the cost of starting a new technology business has dropped. He believes that data is a long missing piece and he points to more recent startups like Yelp and foursquare as examples.

These sites started with some core data provided by the developers, but in most cases they relied on users to enter data about places to really take off. With a service like Factual, these companies could buy the data about all the restaurants in NYC or the country for that matter and seed their databases before launching.

They could buy storage from Amazon S3 and server space from Rackspace. They could build a database application with Database.com and all for a fraction of the cost of delivering a comparable product from startup in 2000 when a company had to buy almost all of the hardware and software at tremendous up-front cost.

As I wrote last week, when I first read about Database.com, I saw it as a logical step for Salesforce.com, but I didn’t necessarily see the full implications of it until I read Suster’s excellent blog post.

As we sit here all of this is coming together, seemingly in a single week, and having a potentially huge impact on the future of IT. Instead of dealing with expensive hardware and software solutions to implement database applications, you could provide the same services with cloud applications at a fraction of the cost.

What’s more you could get that same economy of scale and efficiency that Suster spoke of for start-ups, regardless of the size of your business or where it is in a business maturity model. IT Pros need to be paying attention because these trends matter. Otherwise, that flexible startup started on a shoe string using cloud services from Day 1 could be passing you before long.

Dreamforce reinforces cloud vision

Ron Miller — Mon, 06 Dec 2010 11:39:16 +0000

It seems appropriate that I’m launching this blog the same week as Salesforce.com is holding its annual Dreamforce conference because Salesforce was the first company to truly bring an enterprise application into the cloud (even though nobody really called it cloud back then).

Word has it that billionaire businessman Marc Benioff was a starving entrepreneur in 1999 when he came up with the idea for Salesforce.com in a rented apartment in San Francisco. At the time, if you asked most IT professionals if they would be willing to put all of the details of their company’s customer data on somebody else’s servers they would have looked at you like you were daft.

Sure, maybe it was possible such an idea could work for small businesses who don’t have to deal with the sensitive security matters of a larger enterprise, but the big boys would never go for it.

Yet Salesforce.com grew into a billion dollar business, and not just with those small businesses, but with plenty of big ones too. Turns out the idea of putting a service up on a web site and charging far less than the comparable installed software made a lot of sense for a lot of companies.

In the introduction to Benioff’s book, Behind the Cloud, Dell CEO and chairman Michael Dell writes that much like how his company, Dell Computers, had done with PCs, Salesforce rooted out the inefficiencies inherent in traditional enterprise software design. As Dell wrote:

“Enterprise software was exorbitantly expensive and onerous to implement, and, in the end, it didn’t work very well.”

When you add to that the ridiculously long upgrade cycles that took up to several years, and that when you did upgrade, it tended to break what you had in place, you might be wondering why IT wasn’t looking for a better way.

Once Salesforce proved the model could work without the sky falling (if you’ll pardon the expression), other IT pros had to at least take notice (or at least you would think they would). And if you could put your customer data in the cloud, why not other sensitive data?

Yet even today in 2010, more than 10 years after Benioff launched Salesforce.com, we have lots of push-back about cloud computing. There are of course some legitimate concerns around governance, data ownership and security, and I don’t mean to minimize them, but the fact is that there are many rock-solid cloud businesses out there today managing lots of data beyond just customer information including files, content, project data, and more.

It’s surely not a perfect solution (but show me one that is), but if offers regular upgrades (sometimes weekly or monthly) behind the scenes for free without breaking what’s in place (most of the time). That alone in my view makes cloud computing worth considering.

You still have a neck to throttle as the folks in IT are fond of saying because if that service goes down or has a security breach, the whole model is at risk. Salesforce and Google and Box.net and so many others understand that better than anyone.

Whatever your feelings about cloud computing or Salesforce.com at this moment in time, you have to admit that it pioneered the idea of storing enterprise data outside the firewall, and what was once considered a radical notion is a mainstream concept today.