By Sramana Mitra and guest author Siddharth Garg
Sramana Mitra: So, following your terminology, systems of differentiation is where software as a service is playing, and systems of innovation, the more experimental zone, is where platform as a service is gaining adoption?
Marc Ferrentino: That is exactly right. When you look at Salesforce.com, a lot of applications that are built on Salesforce.com are things that people are trying out, the way they are trying out processes and different flows. Or they are building a website or a marketing site, but they are not quite sure what the up going to be, and they don’t know if they are going to get two users or two million users, right? So, the elasticity of the cloud and the nimbleness of the cloud really play well, specifically its Force.com platform because it is a higher-level platform. What we see are nontechnical people building applications. Those are the same applications they may have been trying to hack together as spreadsheets or build on Lotus Notes, and they are now building on Force.com; these applications are now becoming broad-based platforms for business analysts to try new things with and play around with and do innovative work.
The nice part about this is that it is not entirely outside the IT realm, which is what CIOs really like. They like the idea that they can give a tool to a business analyst to help that person become more nimble, but they don’t have time to move [the tool] into production. That is when IT governance comes in, but it is a much lighter form of IT governance. It is trying to give the best of all worlds, and it is something that more progressive customers have adopted. We have seen some great success with organizations trying new things and allowing employees to play around. I am not sure if you are familiar with the term “shadow IT?” It is a term we use a lot; it is a thing that emerges when IT is not as responsive to business needs as much as the business would like it to be. Salesforce.com comes to that place that needs to innovate, to try anything in terms of having a place to play, but still in the purview of IT.
SM: You are seeing that option of platform as a service by a somewhat nontechnical user, the business analyst.
MF: Correct. We have seen a huge uptake in that, and a lot of it I think has to do with Salesforce. It’s the only company that has higher-level platform as a service concepts right now, so it has been really well adopted. I think hundreds of thousands applications that have been built on our platform. I am referring to non-SFA applications, and a lot of those applications were being built or have been built by business analysts whether they are recruiting apps, PR apps, a performance management app, or a project management app. Probably the analyst has built it outside or they have never heard of a competitive intelligence application that was built on Salesforce.com by the competitive intelligence team at one of our customers.
SM: Now, switching a bit in the direction of entrepreneurship. As you know, the blog supports the One Million by One Million program, and our goal is to help a million entrepreneurs reach a million dollars in annual revenue and beyond, so a lot of the work we do is to shed light on entrepreneurial opportunities based on perspectives like yours. Now, three, four, or five years ago there was a small company that was starting up, and today that company has gained a lot of traction. The name of the company was Acctio, and it was built on Salesforce.com and did contract management software applications. The company’s founder had actually done a regular enterprise startup in the area of contract management.
Before that, there was a lot of venture money that got completely diluted, and they didn’t make any money. The company was not successful per se, and then when they come out of it they said, We don’t want to raise any money, we really want to bootstrap this. And they were successful in doing so because they knew all the domain knowledge and built it on top of Salesforce.com when they brought the product to market. Very soon, within a couple of years, they were doing $5 million in revenue. I haven’t talked to them lately, but I am sure they have done well in terms of bootstrapping this company. Now, these applications are the ones you have called innovation applications or in the innovation bucket of applications. Are there opportunities for entrepreneurs to build products in that category?
MF: That is exactly what we are seeing right now. We have a lot of entrepreneurs building application on Saleforce.com like the ones you are talking about, but they have specific domain expertise. This is a conscious decision by the executive team: Salesforce was to not do what Siebel did, not go in and be everything to everybody and build all these different verticals like Siebel had done. We have basically deferred to our partners’ communities for this, and it has been an amazing thing because it gives our customers choices. So, you have companies like Acctio, and you have quite a number of other companies out there have filled applications, and they are highly verified applications.