Companies going all in for on-demand, not just CRM

By Barney Beal, News Editor 06 Mar 2006 | SearchCRM.com

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Carlos Basulto could practically serve as the poster boy for Salesforce.com's latest initiative.

Things that we don't [host] we're making plans to put on Salesforce.com Carlos Basulto, director of operations, EarthCalc Inc.

Basulto, director of operations for Modesto, Calif.-based EarthCalc Inc., a real estate development and public works projects company, is a one-man IT shop. His company runs its budgeting, project management and human resources applications through Salesforce.com's AppEchange, an online store for on-demand tools provided through Salesforce.com.

"Things that we don't [host] we're making plans to put on Salesforce.com," Basulto said.

EarthCalc made the decision to go all on-demand, all Salesforce.com when it realized that most of its software was already running on a terminal services application at a similar price to what Salesforce.com and AppExchange would cost.

"We haven't increased our cost, but we have increased penetration," Basulto said, citing users' familiarity with the Salesforce.com platform.

Related information: SAP's entry muddles the hosted market Hosted software moves marketing to the head of the line The hidden costs of SAP on-demand SAP acknowledges barrier to mySAP CRM implementations - Subscribe to SearchSAP.com's RSS Feed for news and tips on SAP.

EarthCalc's decision was made possible in part by the latest move by Salesforce.com. Today the San Francisco-based company released its Unlimited Edition, a response to customers' rapid deployment of its applications. The Unlimited Edition features support for an unlimited number of custom-developed or third-party applications deployed via AppExchange, enhanced storage and customization, Platinum Support and Administration, plus the capabilities of its Enterprise Edition and the Salesforce Sandbox, its testing and training environment. It's available for $195 per user per month. In contrast, the Enterprise Edition costs $125 per user per month; Sandbox is $25 per user per month for the version which allows all data and customizations and $18 per user per month for the metadata-only version; and Platinum Support is roughly 15% of the total license with the Enterprise Edition, according to Saleforce.com.

The popularity of the AppExchange required Salesforce.com to provide customers with an architecture with the ability to deploy an unlimited number of custom-developed and third-party applications, said Kendall Collins, vice president of marketing. For example, with the Enterprise Edition, customers could only deploy 10 applications, 25 custom tabs and 200 custom objects. This version allows for unlimited applications, 50 custom tabs and 2,000 custom objects.

"People are really ready to take advantage of custom applications and turn them on demand," Collins said. "They're spending a huge portion of their IT budget to maintain custom applications."

While there has been interest in the unlimited option from Salesforce.com's enterprise-sized customers, the smaller businesses that don't have a wide variety of systems already installed have been quicker on the uptake, Collins said. The enterprise may be where Salesforce.com finds the most traction with this release, according to Denis Pombriant, managing principal with Stoughton, Mass.-based Beagle Research LLC.

"I see Unlimited and AppExchange as the second disruptive innovation in on-demand," Pombriant said. "I see it first focused on the underserved and unserved markets, but eventually -- and I mean in the next couple years -- I see no reason an approach like this cannot suffice as a large enterprise's application and deployment solution."

However, don't expect everyone to rush to put their entire IT department in Salesforce.com's hands, he warned. It will be a long-term, strategic move for companies, similar to the move from mainframes to network computing. Mainframes are still doing valuable work, but companies have shifted their resources over the past two decades, Pombriant said.

EarthCalc did not take the step without reservations of its own, particularly after a series of highly publicized outages hit Salesforce.com in the last four months.

"Yes, those were a big concern for us," Basulto said. "We run the entire company through Salesforce and we had several of those. After seeing the things they've done with service capacity and trust.salesforce.com, we're not doubting the platform."

Salesforce.com launched trust.salesforce.com, a Web site that provides information on Salesforce.com's performance, outages and updates on any corrective action it's taking.

The additional support helped persuade EarthCalc to make the investment in Unlimited as well, Basulto said.

The Unlimited Edition is available immediately and includes 120 megabytes of storage per user, a six-fold increase over Enterprise Edition.

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