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Salesforce.com Plans Expansion into Other Businesses -- Next Year

Salesforce.com CEO Marc Benioff is trying to dispel the notion that his company is a one-trick pony.

At the annual Dreamforce conference in San Francisco last week, Benioff told 90,000 attendees and the thousands more who tuned in to his keynote via a Facebook feed that he plans to expand his company's Software as a Service (SaaS) applications well beyond customer relationship management -- the foundation of Salesforce.com's business.

While this is not the first time Salesforce.com has veered from its charter of offering tools aimed at helping organizations better interact with its customers, it's arguably the broadest extension of its service offerings into lines of business it hadn't previously touched, such as document sharing, marketing automation and human resources.

In a sign that Salesforce.com is looking to stake a claim in these new areas, many of the new services launched last week won't be available until the second half of next year. That's out of character for Salesforce.com, which typically doesn't pre-announce services well before their availability, said R. "Ray" Wang, CEO of Constellation Research.

"Marc did not announce things in general availability other than the marketing apps, which was unusual," Wang said. "They did a lot of forward-marketing, which is not like Salesforce. I think he's afraid other people are going to jump into this market, so he's announcing things in development that are not released as code."

Wang, who attended the Dreamforce conference, said it was telling the number of HR, finance and marketing executives that were at the conference, who upstaged those from IT organizations. That's no coincidence. Citing a projection by Gartner that chief marketing officers will spend more on IT than CIOs by 2017, Benioff said, "Now we're inviting them into the cockpit into this incredible new marketing cloud."

The offering is Salesforce Marketing Cloud, which combines the scanning of social networks, advertising, business measurement and workflow based on technology it acquired from Buddy Media and Radian6. The key audience for Salesforce Marketing Cloud are these CMOs.

Benioff planted the seeds for extending Salesforce.com's reach with its launch two years ago of Chatter, its social media tool best described as a version of Facebook designed for use in an enterprise or extranet type scenario.

As noted by my colleague John K. Waters, Salesforce.com used Dreamforce to jump into the HR field -- or, as it's called these days, the "human capital management" (HCM) field -- with the launch Work.com, a system designed to let managers and HR benchmark and reward the performance of employees in a social context.

Through an expanded partnership with leading HCM SaaS provider Workday, Salesforce.com will provide integration of Work.com with Workday's HCM offerings. Salesforce.com's push into HCM comes as key rivals have moved into this rapidly growing segment. Oracle last year acquired Taleo, SAP picked up SuccessFactors, and IBM just announced it has acquired Kenexa for $1.3 billion.

Another area where Salesforce.com is spreading its wings is document management with a move aimed at offering an alternative to the likes of Box and Dropbox. The company described the new Salesforce Chatterbox service as the "Dropbox for the enterprise." But with so many services such as Dropbox and Box.net out there, is Salesforce a) moving too far adrift? and b) likely to gain a foothold into document sharing?

"Although Box.net has gained lots of attention and many users, it hasn't established a firm hold on the B2B and enterprise markets," said Jeffrey Kaplan, managing director of Thinkstrategies, a consulting firm focused on cloud computing. "And there are no dominant players in the other areas."

Likewise, Kaplan, who also attended Dreamforce, said Salesforce.com will raise its profile in other new functional fields it's entering. "Salesforce.com will bring greater legitimacy to each of these areas, in the same way it has championed the idea of social networking in the enterprise with Chatter," he said.

Perhaps the biggest challenge facing Salesforce.com's ambitions to widen its footprint is the number of companies it has acquired in recent years, said Joshua Greenbaum, principal analyst of Enterprise Applications Consulting.

"Now that they have all these assets, they need to do a better job of integrating them," Greenbaum said. "They need to focus on allowing developers and customers to integrate all this functionality and stop creating silos of functionality that are as problematic as any legacy silo is."

Posted by Jeffrey Schwartz on September 24, 2012 at 11:59 AM