Reflections on Dreamforce, ZD's Channel Summit and Verio's Partner Event
Waiting for a delayed flight to Chicago from Vegas, as I try to make my way home to Boston, is an opportune time to recap a week of travels across the Software-as-a-Service (SaaS) and managed services landscape.
This past week began at Salesforce.com’s annual Dreamforce user conference. It was another lovefest that attracted a record crowd of over 7000 users, partners, press and analysts, up from fewer than 5000 a year ago. The 40% growth in total attendees was eclipsed by a tripling in the number of partners showcasing their on-demand capabilities, despite a big increase in the price for booth space.
The focal point of the event was Salesforce.com’s introduction of its new Platform-as-a-Service (PaaS), called force.com. The company also introduced a user interface on-demand solution (IaaS), visualforce.com. (Click here, to read THINKstrategies’ whitepaper regarding the new PaaS.)
These announcements are the latest examples of the company’s brilliant ability to continuously iterate its corporate capabilities and accompanying marketing messages to monopolize SaaS industry mindshare. Force.com is an extension of the development toolkit and Apex code Salesforce.com has offered to its customers and partners for the past year.
Salesforce.com has been moving toward positioning itself as a platform player for a while, but the PaaS announcement was the clearest assertion of its intentions in this area to date.
The company’s Chairman/CEO, Marc Benioff, even went so far as to suggest in his keynote unveiling of the PaaS and IaaS that these are the last pieces of the puzzle in Salesforce.com’s corporate portfolio. While this is hard to believe, it is clear Salesforce.com has recognized that, as the 800 pound guerilla of the SaaS market, it has the opportunity to capitalize on its success and resell the foundation of its on-demand applications to customers and other independent software vendors (ISVs) who want to accelerate their SaaS development cycles, overcome their service delivery challenges, and leverage proven on-demand tools.
Despite the significant new revenue opportunities and important strategic positioning potential of this move, Benioff assured Dreamforce attendees that Salesforce.com is not abandoning its primary application business which still has plenty of upside potential of its own.
Some SaaS watchers have questioned whether Salesforce.com can balance its platform and application businesses. This balancing act hasn’t defeated Microsoft or Oracle, but instead has made them stronger and has been a pivotal reason for their success. Like them, Salesforce.com has the brains and brawn to succeed at the platform level in the same way it has in its core on-demand application areas.
An indication of its brilliance and market strength is the amount of attention this week’s PaaS announcement generated among its competitors. The day of the announcement, NetSuite sent an email to industry analysts and press pointing out how it had beaten Salesforce.com to market with an on-demand platform and interface years ago. Yet, once again Salesforce.com’s marketing team has succeeded in generating far greater attention than the less flamboyant NetSuite.
SAP also tried to counteract the buzz surrounding Salesforce.com’s announcements by unveiling its latest effort to enter the SaaS market, Business ByDesign. While there were plenty of interesting aspects of SAP’s latest on-demand software plans, I’m taking a wait and see attitude given its failure to fulfill its previous SaaS promises. It is worth noting that SAP is only committing itself to a hosted rather than a multi-tenant solution. As a result, some SaaS watchers are discounting SAP’s offering. However, Oracle is doing quite well with a similar hosting approach. In my view, the more significant meaning of SAP’s latest promises is that it demonstrates how important the SaaS movement and Salesforce.com have become.
My week only began in San Francisco at Dreamforce, I then flew to Chicago for the Ziff-Davis Channel Summit where SaaS and managed services were on everyone’s minds as vendors and channel companies debated the potential impact of these trends on their mutual go-to-market strategies. I had the privilege to participate in a panel focusing on the organizational challenges facing established channel companies seeking to become managed service providers (MSPs). If you’re a faithful reader of this blog or my other writings, you would have found little new in our panel discussion. But, I was struck by the palpable tension between the vendors and channel companies regarding the market implications of the on-demand movement. Both parties will need plenty of help repositioning themselves in this rapidly changing marketplace.
I capped off the week in Vegas speaking at Verio’s Partner Summit where the company was unveiling its new Business Solutions portfolio of SaaS and managed services to its channel partners. Verio did a great job packaging and positioning the new portfolio to the satisfaction of its channel partners who responded positively to the new offerings and were eager to present them to their customers. While I’ll accept a little credit for helping Verio refine the packaging and positioning of its offerings, the company deserves the bulk of the credit for listening to its partners and telling them that the new offerings will be adjusted in response to customer and partner feedback.
My Fall travels are just beginning. This coming week, I’ll be back in San Francisco facilitating a client’s customer advisory council meeting, and then to NY for a client strategy session. The following week it is on to Charlotte for a Carolina SaaS Users Group gathering, and LA for another client strategy session. I’m then in Austin for Pervasive Software’s IntegratioNext conference and NYC where I’ll be speaking about SaaS at Interop.
So, as I crisscross the country and add frequent-flyer miles to my account, I’ll continue to give you my perspective regarding the latest announcements and trends in the on-demand market.