Week of crashes highlights on-demand peril

Problems with Salesforce.com raise questions for hosted service providers

Salesforce.com Inc.'s crash on Tuesday came amid a spate of outages at hosted service providers, a run of bad luck that suggests the "on-demand" software wave may require customers to temper their demands.

"Click and wait, click and wait," is how customer Charlie Crystle described his experience with Salesforce.com. Crystle, the chief executive officer (CEO) of nonprofit fund-raising software maker Mission Research, took out Salesforce.com subscriptions earlier this year for six people in his Lancaster, Pennsylvania, company. Although full-blown outages like Tuesday's are rare, Crystle estimated that at least once a week the system slows to the point of being nearly unusable.

"I've got a sales team that ends up really unhappy. They want to get in there and close sales," Crystle said. He plans to soon cancel his Salesforce.com licenses and switch to a homegrown, in-house sales management system.

Salesforce.com is being tight-lipped about the roots of Tuesday's outage. A software problem with one of Salesforce.com's database clusters caused the service to be intermittently unreachable for some customers for about six hours, according to Bruce Francis, Salesforce.com's vice present of corporate strategy. Salesforce.com does not yet know the extent of the outage, he said.

"We're not really sure. We haven't gone back through the logs yet," Francis said. "At a time like this, it's all about focusing on fixing it."

Anecdotal reports suggest that the breakdown was among the most severe in Salesforce.com's six-year history. "We are told the outage impacted a majority of customers, as well as restricting the company's own access to the system," First Albany Corp. analyst Mark Murphy wrote in a research note. "We are aware of multiple customers that are quite displeased with the outage."

Salesforce.com's system was back online late Tuesday and is currently running normally, Francis said.

Salesforce.com's blackout followed similar downtime from other "software as a service" providers. Six Apart Ltd.'s TypePad blog hosting service went down for the day last Friday following a failed storage upgrade. Affected customers included Major League Baseball's MLB.com site, which hosts all of its blogs with TypePad. In addition, the del.icio.us bookmark-sharing service that Yahoo Inc. just bought suffered days of problems last week after its data center lost power.

Yankee Group Inc. analyst Sheryl Kingstone said she hopes occasional problems such as Salesforce.com's stumble won't scare customers away from on-demand services. Internal software is hardly immune to breakdowns, she said, noting that her own corporate publishing system was down for several hours this week.

"I wouldn't say this is indicative of a trend, or likely to happen again," Kingstone said of Salesforce.com's outage. "A lot of the vendors are putting very large investments in place to prevent these sorts of situations."

Salesforce.com, based in San Francisco, is in the midst of a major update and infrastructure overhaul. It's sinking $50 million into setting up new data centers on the U.S. East and West coasts with redundancy and failover capabilities, an initiative it calls "Mirrorforce."

An array of Salesforce.com integration problems popped up in mid-November when the company brought its new California data center online, and its next update could prove similarly rough: One consultant who has worked through a string of glitches in recent months affecting his clients' deployments calls the forthcoming Winter '06 update the "grab your ankles" release. With it, Salesforce.com will bring up its East Coast data center and go live with a new platform, called AppExchange, for integrating third-party applications with Salesforce.com systems. Salesforce.com plans for the Winter '06 edition to debut for customers on Jan. 9.

Salesforce.com now supports 351,000 subscribers on its on-demand CRM (customer relationship management) system, providing outsourced, managed sales software for more than 18,000 organizations. The company and its charismatic CEO, Marc Benioff, have been evangelical pioneers of the hosted-software model that a number of other vendors have rushed to embrace. Still, almost none have built up systems as large as Salesforce.com's. Francis denied that Salesforce.com's reported slowdowns are a sign it's struggling to keep pace with its customer growth.

"When you are architecting a large, complex system like ours, you're always working to improve it," he said.

As of late Wednesday, several customers said they were still waiting for details about Salesforce.com's breakdown. "An apology would be nice," said Crystle from Mission Research.

While customers awaited information, they had one piece of oddly timed advice from Salesforce.com. "Keep Offline Edition Always Synched!" advised a noted posted Wednesday on Salesforce.com's CRMSuccess.com blog. For users looking for perpetual access to their data, backups may be the key to happiness in the on-demand world.

Copyright © 2005 IDG Communications, Inc.

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