Salesforce.com wants to be a content management player

On-demand software vendor Salesforce.com on Tuesday announced plans to enter the content management market via the acquisition of Web 2.0 content collaboration startup Koral.

[ Analysis: Salesforce gets trendy with Web 2.0 solution ]

Under a new initiative dubbed Salesforce Content, the hosted CRM (customer relationship management) company intends to eventually provide management for all of its customers' information, whether it's structured data held in databases or unstructured data such as documents, e-mail messages, audio, and video.

"Starting today, we are a content management player," said Bruce Francis, vice president of corporate strategy at Salesforce.com.

As part of the move, Salesforce.com will build Apex Content a new extension to its existing platform, which will serve as the basis for its content-based applications and enable developers to include those capabilities in software they build on top of Salesforce.com's software. The first content application to appear will be Salesforce ContentExchange.

Both Apex Content and Salesforce ContentExchange are based on technology the company acquired with its purchase of nine-person start-up Koral. The deal closed last month and Salesforce.com didn't reveal any financial details.

ContextExchange includes the ability to tag business content, rate and comment on content, and subscribe to particular documents, topics and authors. The software aims to help users to find the data they need more easily and faster than using enterprise content management products from the likes of EMC's Documentum or Microsoft's SharePoint portal software, according to Francis. "Tagging documents in Salesforce will be like tagging pictures in Flickr or videos on YouTube," he said. Salesforce.com plans to release details on the pricing and availability of both ContentExchange and Apex Content later this year.

With companies still struggling to find ways to better leverage the information they hold within their organizations about their customers, partners and competitors, Salesforce.com is entering the content management market at a good time, said Jeff Kaplan, managing director of consultancy ThinkStrategies.

Taking Web 2.0 technologies that have proved successful in the consumer world and applying them to the business world is a smart move as is buying Koral. "With a small, relatively untested entity, you can add on functionality for a larger company in a way that doesn't disrupt their own internal operations and help to foster the growth of the start-up within perhaps a more secure business environment," he added.

Much like Google, which is continually moving outside its search engine roots, Salesforce.com is constantly broadening its scope to cover new markets related to its core hosted CRM competency, Kaplan said. Both companies are acting as disruptive forces in established software markets. So far, Salesforce.com hasn't sacrificed anything in its expansion, but he cautioned that the company may face a struggle in future as it tries "to be more things to more people."

As Salesforce.com moves into document management, Rob Bois, an AMR Research director, believes the company will see uptake among its core customer base, many of whom have yet to broadly adopt the technology other than what's already provided with CRM software. "However, Salesforce.com's entry into the broader document management arena may at least get some of the traditional vendors more interested in the Software as a Service model, perhaps to reach new demographics," he wrote in an e-mail. "In the near-term, however, I wouldn't expect Microsoft to fold up its SharePoint operations based on this news," Bois quipped.