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A negative trend for Salesforce.com (CRM)?

Posted on October 22, 2008

We’re out and about meeting companies and attending some technology conferences in Europe this week.  One thing we have heard a few times suggests that Salesforce.com may be looking more like legacy enterprise software than a new SaaS or PaaS platform.

To be clear nothing we heard suggests that it’s "game over" for Salesforce but rather that there appears to be a more robust market for more advanced, more flexible and lower-cost solutions in this market. 

It’s been over a year now since we first started hearing from corporate customers that their annual costs for Salesforce.com were out of line what they felt was justified and what they could get from other offerings.  Since people just about always prefer to pay less we didn’t think too much of it at the time.

Today we heard from some more organizations saying that they are finding Salesforce.com to actually be *hindering* and *slowing down* their sales process.  This was a bit of a surprise for us but when they took us through the reasoning it had much to do with the rather clunky interface of Salesforce and their continued lack of real integration.  (There is still a great deal of cutting and pasting involved in doing anything realistic.)

At the same time we are hearing from consultants and integrators that they are increasingly recommending to clients that the consider options and even build their own systems.

Although just a few pieces of evidence have some forward we generally find they are indicative of some emerging trends.  As more software gets developed and deployed in the cloud it becomes much easier to build applications based on open technology services.  This will put some pressure on Salesforce to modernize their products and architecture.  Their efforts to transform to a platform company isn’t looking very promising.

At the same time this is probably a more fertile area for new companies than we thought a few weeks ago.

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