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CRM Technology Decisions: Benioff champions the ASP model

Matt Hines, News Writer

ATLANTA -- Salesforce.com CEO Marc Benioff steadfastly maintains that his company's online utility model offers all the functionality of traditional CRM software. The always-colorful Benioff also contends his company is stealing market share from industry leader Siebel Systems Inc.

Speaking to attendees at TechTarget's CRM Technology Decisions conference, Benioff compared the process of implementing Siebel's software to constructing an office building twice as large as an organization can use.

"Companies can't afford that kind of risk anymore," Benioff said. "Why would you make that kind of investment to get something you don't really need?"

According to Benioff, San Francisco-based Salesforce.com is winning head-to-head bidding wars against Siebel, San Mateo, Calif., for CRM implementations at companies in the $40 million to $50 million revenue range. Because it's a private company, however, Salesforce.com does not release quarterly revenue numbers.

Benioff cited research from Stamford, Conn.-based Gartner Inc. indicating that a typical Siebel CRM deployment takes 27 months to achieve success. He said that a comparable effort around Salesforce.com's outsourced CRM service needs only six months to meet similar goals.

Conference attendees peppered Benioff with questions about whether Salesforce.com's flagship Enterprise Edition can deliver the same level of customization, security and value proposition as traditional licensed applications.

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Benioff challenged CRM project managers to view his company's model as the future of computing.

"Customers shouldn't be burdened with huge architecture investments," he said. "Do your own research and look at the costs related to hardware and obsolescence. Using a Web-based utility, you don't have those concerns anymore." Most hosted providers automatically upgrade users when new versions of their software are released.

Asked why users should buy into his promises, Benioff quipped that they shouldn't.

"I'm a vendor, so don't trust me or the analysts. Look into the logistics for yourself," he said.

Those in the audience appeared open to Salesforce.com's application service provider (ASP) model. Tim Nichols, data architect at Atlanta-based SunTrust Banks Inc., said his company would price Salesforce.com against other vendors before making a buying decision. He also said his company would not have security-related concerns about putting its customer data in an outsourcer's hands.

"As a bank, we're already using the Web to move a lot of information, so online security isn't new territory for us," Nichols said.

Another angle developing in Salesforce.com's favor is a growing perception that ASP-oriented services can serve as an efficient trial method for first-time CRM buyers. It's a notion that several speakers at CRM Technology Decisions advocated in their presentations.

Michael Maples, an independent consultant based in Atlanta, said he recently helped a midsized public relations firm pursue such a strategy.

"They were considering a complex enterprise system but, with no previous CRM experience, senior executives had doubts about making a large up-front investment," Maples said. "Salesforce.com was a significantly cheaper way to gauge how their organization might fare with CRM."

However, Salesforce.com remains vulnerable to the same issue that's plaguing many CRM implementations -- licensed or hosted. Attendee Sean Cassidy, IT business analyst at broadband technology developer Scientific-Atlanta Inc., said his company had no problem getting a Salesforce.com demo turned on, but getting users to buy in spelled defeat.

"A lot of salespeople still don't want to share data or show their hand," Cassidy said. "That's why our executives eventually pulled the plug."

FOR MORE INFORMATION:

Article: Salesforce.com adds to its enterprise arsenal

Featured Topic: Hosted CRM

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