Salesforce.com at turning point as Dreamforce begins

Salesforce.com has grown fast but will need to continue diversifying, analysts say

Salesforce.com enters this year's Dreamforce conference riding a wave of rapid growth and increasing technological breadth, but much work remains ahead of it, analysts say.

"They're not simply an application company anymore. They're a tools company, a social networking and productivity company as well as a conventional, traditional applications company," said Denis Pombriant of Beagle Research.

It is an increasingly large operation as well, with about 87,000 customers and close to $US2 billion in revenue. Some 20,000 people are expected to attend Dreamforce, which began this week in San Francisco.

The company's name will always reflect its roots as an on-demand CRM (customer relationship management) software vendor. But Salesforce.com CEO Marc Benioff has led the company through a series of partial reinventions, making forays into areas like social networking and collaboration. It even named its first chief scientist last week, a move that symbolizes its broader ambitions.

"They don't want to make the same mistake Siebel made," said Ray Wang, CEO and principal analyst of Constellation Research. That CRM vendor failed to complete its plans for a next-generation platform, Project Nexus, and was ultimately acquired by Oracle.

However, Salesforce.com still has a "gaping hole" to fill in its portfolio, namely in analytics, Wang said.

Salesforce.com appears set to shed some light at Dreamforce on how that will happen, said 451 Group analyst China Martens, noting a session scheduled for Thursday titled "Analytics Road Map: 2011 Will Blow Your Mind."

Still, there are "so many opportunities for CRM to be sold" by applying the relationship management model to other business areas, such as the supply chain, Wang added. Salesforce.com has already made one step in this direction through FinancialForce.com, the joint venture it launched last year with Unit 4 Agresso.

The next generation of CRM software also must "really make the salesperson empowered," as historically it has been focused more on helping managers, Wang said. Products like Salesforce.com's Chatter collaboration and messaging application, as well as its emerging range of mobile software, are designed to make a salesperson more productive working on their own, he said.

Salesforce.com is expected to discuss a new "viral" version of Chatter that will be available at no charge. Along with those details, it would behoove the company to have customers, particularly from larger companies, onstage telling stories about their successes with Chatter, Martens said.

There should be plenty from which Salesforce.com can choose. During the company's recent earnings conference call, Benioff said some 60,000 customers had deployed Chatter.

Some insight into the status of once high-profile partnerships with the likes of Google and Facebook could also be useful, Martens added. "A couple of years ago, [the Google partnership] was a huge love-fest. I'd like to see if it is really as strong as it was," she said.

Dreamforce continues through Thursday. Benioff is expected to deliver the show's biggest announcement during a keynote address on Tuesday.

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris's e-mail address is Chris_Kanaracus@idg.com

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