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Salesforce adds on-demand to CRM tools

Business applications provider launches latest version of its hosted services, emphasizing greater customization, new capabilities.

SAN FRANCISCO--Salesforce.com introduced the latest update to its hosted customer relationship management package on Tuesday, with a focus on increasing customization and integration capabilities throughout its applications.

The San Francisco-based applications service provider said the new release, Salesforce.com Winter '05, will go live Nov. 15, becoming immediately available to all of the company's existing subscribers. Salesforce sells monthly licenses for its Web-based customer relationship management (CRM) applications, which businesses use to help manage operations such as sales force and marketing automation.

The Winter '05 release includes a new program, CustomForce, that lets companies change the user interface, business reports and workflow of Salesforce?s customer information systems to their liking. Companies can also customize tabs, layouts, fields and access controls for the software.

CustomForce can build new applications to handle, for instance, recruiting, information technology and public relations.

Salesforce Chief Executive Marc Benioff discussed the new program at his company's user conference in San Francisco, where 2,000 people converged to hear about the latest developments from the company.

Benioff contrasted Salesforce's approach to business systems to those of such rivals as Siebel Systems and SAP. Since most companies find packaged applications lacking in some way, software suppliers often create different versions for certain industries, such as high-tech, for a better match.

"Cisco Systems doesn't want the high-tech version," Benioff said. "They want the Cisco version. They want the edition that's exactly for them. That's what CustomForce is all about. That is our strategic direction."

CustomForce is available at no extra charge to users of Salesforce's pay-by-the-month programs.

The company said the Winter '05 release will enhance its subscribers' abilities to create new software tools that draw on data already contained in its systems. The customization package is individually known as Customforce.com and will be made available to the company's existing Salesforce.com and Supportforce.com customers at no additional cost. Supportforce is the company's customer service management application.

The company said the new release also features across-the-board upgrades to its core CRM package, Salesforce, as well as Supportforce and its Sforce product line of Web services and application integration tools.

Winter '05 is the company's latest effort to expand the scope and capabilities of its online services. Earlier this year, Salesforce introduced a new line of customer service programs for call centers, and last year, it released a set of tools for linking its programs to customers' in-house business systems.

The company is also working on letting people access its software from all kinds of machines, including Internet-enabled mobile phones, BlackBerry pagers, handheld personal digital assistants and from within productivity applications such as Microsoft Office.

Salesforce, which launched one of the , is the poster child for subscription business software--a new model for selling and delivering software that's on the rise among corporate users.

But Salesforce is facing an increasing number of competitors in the software-as-online-service field, including NetSuite, RightNow Technologies and Siebel Systems. Several new contenders have entered the market this fall, including SugarCRM, which is launching a hosted version of its open-source programs, and a new product called SalesCenter from Uptilt.

Unaccustomed to customization
Since application service providers--companies that host applications over the Web--began appearing in the late 1990s, lack of customization has been considered both an advantage and drawback in their products. Smaller companies have traditionally found the lack of complexity helpful in adopting the tools, but larger customers have shied away from the applications, based on their need to integrate CRM with other enterprise systems.

According to Sheryl Kingstone, an analyst at Boston-based research firm The Yankee Group, Salesforce is adding sophistication to its products with the hopes of attracting larger clients. The company has found most of its success among midsize and smaller businesses.

The analyst said that the more Salesforce reaches out to larger customers, the more it will be forced to build Web services "wrappers," or links to legacy software systems, as it has done with Customforce. However, she said, the company needs to deliver a balance of flexibility and simplicity to lure new clients.

"Simplicity can help drive (Salesforce) upstream, because many larger enterprises have applications that they are not using, and they want to decrease cost and complexity and increase users," Kingstone said. "Whether they can attract numbers of larger customers depends all on how well they fit. It is easy to convince people around simplicity, but it will be hard to get other companies to drop their investments in legacy systems."

Matt Hines reported from Cambridge, Mass. Alorie Gilbert reported from the Salesforce customer conference in San Francisco.