News

salesforce.com Is Validating SaaS Model, Say Industry Watchers

• By John K. Waters
• January 9, 2007

The salesforce.com AppStore announcement grabbed plenty of headlines just before the holidays. Salesforce.com's chief exec Marc Benioff says he wants his company to become "the iTunes of on-demand apps." The company's soon-to-launch AppStore is designed to allow customers to browse, test, and purchase AppExchange software from third-party developers.

The AppExchange platform, unveiled in 2005, is a Web-services-based foundation for developers who want to offer their applications as hosted services integrated into the salesforce.com on-demand CRM services.

At the end of fiscal 2007, salesforce partners will be able to sell products on an AppStore site or through salesforce.com's own sales team. Benioff says his company will receive 10 to 25 percent of the products' first year of revenue for the service.

At least one competitor thinks salesforce.com is good for everyone in the software-as-a-service (SaaS) market.

"I think it's great," says Don Best, vice president of strategy and marketing at Jamcracker. "Their success is validating the SaaS model."

Best hastens to add that his company, Santa Clara, Calif.-based Jamcracker, has beaten salesforce.com to the punch with the only functioning online SaaS marketplace currently in operation. The Jamcracker Service Delivery Network (JSDN) is designed to enable channel providers--which Best calls "the feet on the street"-- to connect with 79 million SMBs throughout the world.

Best is probably right. Industry watchers are beginning to speak in terms of "saleforce.com-like" services, or the new "salesforce.com-breed" of software provider.

Just this week, salesforce.com announced that it would be teaming with Siemens to offer a mashup between salesforce.com's CRM service and Siemens HiPath OpenScape communications application. Siemens plans to join salesforce.com's AppExchange roster, the company announced, which now lists about 400 plus member companies.

Siemens' OpenScape is a presence-aware applet designed to allow enterprise users to use a set of common communications tools, instant messaging, cell phone, and e-mail, in real time. The planned mashup embeds OpenScape within salesforce.com's CRM service, which will allow users to check on availability prior to setting up a conference call, sending an IM, or making a phone call.

Josh Greenbaum, analyst at Enterprise Application Consulting, says that the fact that a company the size of Siemens would partner with salesforce.com--essentially target its customers--shows the strength of the SaaS concept.

Jamcracker is going after this market with a service that automates the delivery of SaaS products, customer lifecycle, and end user management of all services. Self-registration, self-service for Move Add Changes (MAC), billing and support are all automated by the JSDN, providing a virtually no-touch method for channel providers to sell and deliver these services. These are best of breed services, not vendor-centric or dependent, says Best.