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Salesforce debuts customization and major deals

Specialist in hosted applications unveils latest set of customization tools and details 5,000-seat agreement signed with Merrill Lynch.

Salesforce.com, a provider of hosted applications, introduced on Tuesday new customization options for its online customer relationship management software.

The Web-based CRM specialist also announced a sizable deal with Merrill Lynch and a new distribution agreement signed with Accenture.

Salesforce gathered a group of customers for a meeting in New York where it detailed Customforce 2.0, its newest package of tools meant to help customize its applications. Salesforce used the opportunity to announce what may be its largest customer win ever, in the form of a 5,000 seat installation at financial service giant Merrill Lynch, and publicly formalized its ties with Accenture.

Last week, Salesforce reported a tenfold rise in profits for its latest quarter, posting first-quarter net income that grew to $4.4 million, or 4 cents a share, compared with income of $437,000, or breakeven per share, one year ago. The company said it won other big new clients during the quarter, including DuPont, and it reported revenue that nearly doubled, to $64.2 million from the same period last year, and was up 18 percent on a sequential basis.

Company officials said there may be several Salesforce customers who have seen the number of licenses they hold for the hosted CRM applications proliferate beyond the scope of the Merrill Lynch deal, but they said the pact marks the most sizable agreement Salesforce has ever won from the start of a project. Specific details of the deal, such as which Salesforce applications Merrill Lynch will use, or how long the company plans to continue its subscription to the hosted software, were not immediately made available.

At the event, John Freeland, Accenture's managing partner of CRM, took the stage to announce the new deal between his company and Salesforce, through which the consultancy will build a practice dedicated specifically to selling licenses for the software maker's applications.

Salesforce executives labeled the two announcements as proof that perceptions of its hosted software business model are growing increasingly positive and effectively drowning out noise about security threats from critics of such services.

"This news continues to validate the Salesforce model and prove that organizations who can afford to choose any technology in the world to automate their businesses believe in what we can do for them," said Phill Robinson, senior vice president of global marketing at Salesforce. "Accenture is a trusted advisor to some of the world's largest companies. They're telling us that they're seeing a shift in the CRM landscape and have been impressed by our momentum and will build a practice around Salesforce.com; that's very big for us too."

The executive said that prior to Tuesday's announcement the two companies had already been working together unofficially for more than 18 months.

Robinson said long-standing concerns about the safety of using online tools to work with potentially sensitive company and customer information have begun to abate, no matter what Salesforce's rivals might say. For instance, Bill McDermott, chief executive of SAP Americas, another enterprise software maker, said last week that most of the companies he speaks with aren't willing to part with such information, or what he called the "crown jewels of their organizations," in order to utilize online software.

Salesforce's Robinson said that security worries have dissipated as people see his company's customers succeeding with their installations of the software.

"On-demand technologies have become mainstream, and major organizations are making a commitment to it; even companies that are maniacal about security," Robinson said.

The customization package is meant to silence another criticism of hosted applications--that they can be too limited and inflexible to meet specific business needs. A major element of the update is the addition of Salesforce's Customforce Business Processes, a set of 100 templates the company has developed to help people in certain niche markets work more closely with its software.

The Customforce update also includes a set of expanded analytical applications that can be used to create business reports from the data stored in the software.