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New software makes Salesforce.com a player

The application service provider is introducing new customer-relationship software that it says will put it in the same league as market leaders Siebel Systems, Oracle and PeopleSoft.

Application service provider Salesforce.com will introduce new customer-relationship software next week that it says will put it in the same league as market leaders Siebel Systems, Oracle and PeopleSoft.

The company, founded in 1999 by former Oracle executive Marc Benioff, will release the Enterprise Edition, a set of customer relationship management (CRM) applications aimed at Fortune 500 companies. The company's previous version, still available, is aimed at businesses with less than 100 salespeople, leaving Salesforce.com off the vendor shortlist in most multimillion-dollar CRM deals.

The new software, hosted by Salesforce.com and accessible through the Internet, provides sales, customer service and marketing applications that companies can customize and integrate with accounting and order-management applications from other software vendors.

The ability to integrate and custom-tailor the applications is the key to attracting bigger customers and is the reason ASPs (application service providers), which have relied on a one-size-fits-all model, have largely flopped, Benioff said.

"The three major disadvantages of ASPs is you can't integrate, you can't customize, and you can't work offline," Benioff said. "We can address all of that now."

Another drawback for ASPs is the inability to use applications without also being on the Web. Salesforce.com plans to tackle that problem with the release of its Offline Edition in the spring.

For $125 a month per customer, Benioff said, the new applications are comparable in feature and function to those offered by Siebel and Oracle but are much cheaper and faster to set up, requiring no new hardware or software. Many companies have complained that CRM projects cost them more and take longer than expected to implement.

"This is allowing the largest companies in the world to stop buying software and start using services," Benioff said.

PeopleSoft also offers hosted, Internet-based CRM applications but says that large corporations aren't as interested in the hosted model because of concerns about controlling customer information.

"If you don't own the software, there are certainly tremendous strategic implications," said Robb Eklund, vice president of CRM at PeopleSoft. "The lifeblood of the company is my customer pipeline and customer data. I want to be careful about where that lives and who has access to it."