Salesforce.com raises hosted CRM stakes

Ratcheting ratcheting up its customization capabilities, Salesforce.com will use its inaugural Dreamforce User & Developer Conference this week to launch the Winter 04 release of its hosted CRM service.

The company will also unveil Version 2 of Sforce, its XML-based platform for corporate developers. Sforce is designed to extend Salesforce.com’s capabilities by providing customizing and integration tools for the application.

The launch comes at a time when Salesforce.com is facing renewed competition from Siebel Systems.

Having completed its acquisition of hosted CRM provider UpShot, Siebel this week will announce beta customers for its recently unveiled OnDemand hosted service. The company is also attempting to spoil the Salesforce.com party by arguing that enterprise customers want a mixture — or at least the choice — of on-premise and hosted CRM.

In response, Salesforce.com is improving the Sforce platform’s customization capabilities to give customers more control over applications.

“Winter 04 and Sforce 2.0 are superior [to] a traditional software model,” argued Salesforce.com Chairman and CEO Marc Benioff. “We have this client service architecture that can be deployed in an organization regardless of scale and deliver equivalent high functionality to a enterprise with the simplicity that Salesforce.com customers have come to expect.”

Other extensions to the platform include S-Controls, which allows developers to customize the user interface to create forms. It supports any client-side browser technology, including JavaScript, DHTML, and .Net controls, and Web services user interfaces such as DreamFactory, said Adam Gross, Salesforce.com’s director of product marketing for Sforce.

On the user side, Salesforce.com is adding dashboards, real-time alerts, contract management tracking, and workflow automation to trigger business processes.

According to Kaiser Mulla-Feroze, director of product marketing at Salesforce.com, the company appeals to enterprise customer due to the lower initial cost of hosted CRM and the ability to create custom objects for vertical industry applications.

Magma Design Automation is already using Salesforce.com’s integration capabilities. According to David Brooks, director of CRM at Magma, the software development company’s unique situation requires that its customer-facing support system include bug tracking for its worldwide base of software engineers.

“With XML APIs [from Sforce] and scripts we put in place, a team of two guys in a month wrote several Python scripts with a Unix command interface that allow us to talk to Salesforce and Python’s RPC [Remote Procedure Call] interface,” Brooks said.

Siebel is also working on integration and claims to have 140 integration applications in place, of which 70 are specific to vertical industries. According to Siebel Executive Vice President David Schmaier, the company has an additional 100 integration applications under development.

Schmaier explained that the company’s strategy is designed to give companies the choice — or any combination of — on-premise or hosted CRM.

“The probability that General Motors or Marriott will host everything is approaching zero. Our view of it is, you might have some projects where the economics of hosted [CRM] makes sense,” Schmaier said.