THINK IT Services

A year ago, I published a series of 10 predictions regarding how the Cloud Computing marketplace would evolve in 2011 in E-Commerce Times. Here’s a recap and assessment of my predictions:

1. The Cloud Computing market will grow more rapidly than analyst firms forecast as organizations move from asking “what is Cloud and why is it important” to “where and how can I capitalize on the Cloud today.”
   • I think I did ok on this one, although there remain plenty of organizations who are still trying to define the Cloud and determine why they should seriously consider employing it.
2. This accelerated growth will occur despite a major cloud computing service disruptions and/or significant security infractions, which will heighten customer concerns but won’t discourage wider adoption.
   • This certainly was the case as we watched Amazon’s Web Services (AWS) crash, jeopardizing numerous start-ups and other companies dependent on its Cloud capabilities, yet failing to dissuade more businesses of all sizes to adopt AWS and other Cloud services.
3. A wider array of appliances and applets will be offered by a growing number of Cloud vendors, which will permit users to “download” the functionality they need so they can work offline or deploy cloud-based solutions behind the firewall to satisfy their reliability and security concerns.
   • This wasn’t as prominent a trend as I expected. However, salesforce.com did acquire Navajo Systems, an Israeli-based startup with unique encryption capabilities that are the basis of salesforce.com’s new Data Residency Option (DRO) that permits users to retain control of their data behind their firewall, which could exponentially expand the addressable market for Cloud vendors.
4. Community clouds aimed at specific vertical markets and supply chain relationships will become more prevalent, as various organizations recognize the value of sharing cloud resources and services with their peers.
   • Although the number of community clouds grew in 2011, they didn’t proliferate as much as I expected as most organizations focused their attention on more binary public vs. private cloud alternatives. 
5. Corporate decision-makers will shift their focus from reliability, security and integration concerns to strategic and tactical governance issues, ranging from planning, selection, deployment, monitoring and evaluation to optimization and monetization of cloud initiatives.
   • This trend was more subtle because most corporate decision-makers continue to have serious reliability, security and integration concerns about the cloud, but are also developing corporate policies and procedures to govern their planning, selection, deployment, monitoring and evaluation processes.
6. The rate of cloud company failures and M&A activities will escalate as many startups are unable to keep pace with rising customer expectations and intensifying competitive pressures, and established players attempt to accelerate their development efforts via acquisitions.
   • The magnitude of the Cloud movement permitted the vast majority of startups and established players to prosper. M&A activity has escalated as the year has gone along, capped off with SAP’s acquisition of SuccessFactors, Oracle’s purchase of RightNow and salesforce.com’s recent Rypple buy.
7. Vendors that provide cloud integration tools and professional services, in particular, will be key acquisition targets because they represent a critical component in pulling the various cloud piece-parts together. The acquisitions of Cast Iron Systems and Boomi are just the beginning on the tools side. Consolidation among cloud integration service firms will occur in the coming year.
   • A series of acquisitions by Appirio were the clearest example of this trend on the professional services side of the integration world. But, the number of Cloud integration and consulting companies continues to increase in response to growing demand. The lack of integration tool vendor acquisitions was a bit of a surprise.
8. Social networking will become a required component of enterprise applications, driven by the success of Salesforce.com’s Chatter. By offering Chatter free to a broader population of end-users within its existing accounts, Salesforce.com is not only raising the bar for its direct competitors, but also expanding and redefining its role within the enterprise.
   • Salesforce.com’s intensive marketing campaign promoting the virtues of the ‘Social Enterprise’ have brought broader attention to this idea. It has not only forced other Cloud vendors and established players to promote their social networking capabilities, it helped fuel Jive’s IPO.
9. Datamarts will become a cornerstone of a new generation of cloud-based Data-as-a-Service (DaaS) and Business Process as a Service (BPaaS) solutions, as well as industry benchmark services.
   • Salesforce.com rebranded Jigsaw as Data.com and unveiled Database.com, but examples of BPaaS didn’t get as much attention because they are taking shape within specific vertical markets.
10. New channel programs will be introduced, new channel partners will emerge and new revenue streams will be established. Ironically, the leading cloud vendors — such as Amazon, Google and Salesforce.com — will continue to have the toughest time building successful channel programs because of their direct sales heritage.
    • The success of THINKstrategies’ first Cloud Channel Summit is an indication of the level of interest in building successful partnerships in the Cloud. Although, channel executives from Amazon, Google and Salesforce.com were prominent speakers at this event who have made significant progress with their channel development programs, they all readily admit they are still searching for the right formula for success.

Salesforce.com, Dell-Boomi, Progress Software and Birst are the latest Cloud companies sponsoring and speaking at the Cloud Channel Summit, on Monday, November 7, at the Computer History Museum in Mountain View, CA.

These Cloud companies join a growing number of sponsors, partners and speakers participating in the one-day executive forum which will bring together senior executives from leading Cloud vendors and their channel company counterparts to share industry best practices and innovative ideas for building profitable and successful channel partnerships in the Cloud. 

Click here for more information.

In case you missed it, I published a couple of commentaries and participated in a three videos over the past two weeks discussing the industry implications of the major announcements at Salesforce.com’s annual customer/partner extravaganza, Dreamforce 2011.

Here are the two recent commentaries:

• E-Commerce Times: Dreamforce Takeaway – It Is All About Cloud Channel Strategies, 09/09/11 
• Datamation: Are You Ready for the Social Enterprise? 09/06/11

And, here are the recent videos,

• The Pulse Network: ITEC This Week, 09/09/11 
• DreamSimplicity: At Dreamforce, 09/05/11
• TechTarget: Is Salesforce.com’s DRO the First Step to a Private Option? 09/01/11 

The Pulse Network also gave me an opportunity to promote our upcoming Cloud Channel Summit. Check it out here.

Stay tuned for more perspectives regarding the business implications of Salesforce.com’s latest initiatives and announcements.

Today’s official launch of Microsoft Office 365 squarely positions the company as the latest major contender seeking to win a share of the rapidly growing Cloud Computing marketplace.

Although Microsoft has been saying that it is “All In” and funding a TV ad campaign which has made the catchphrase “To the Cloud” popular, Microsoft 365 represents the company’s boldest offering to date. The company has been watching its Office suite suffer attacks from Google Apps for years. In fact, Google Apps are quickly becoming the basic productivity suite of choice for most new college graduates entering the workforce.

Many of these new entrants to the workforce are forgoing email altogether by relying more on Facebook, Twitter and text to communicate. In response to these trends, Salesforce.com is pushing its Facebook-like Chatter communications platform as a dramatic switch from traditional email.

IBM is also attacking the Microsoft Office franchise with its revamped LotusLive offering. And, VMware is pushing its Zimbra alternative. You can also expect Apple to put more emphasis on its web-based productivity tools to build on its iCloud platform which has already captured plenty of market attention.

All of these players recognize that the first step in the corporate migration process to the Cloud tends to be via email. While this seems like an easy place to start the journey to Cloud-based alternatives, there are still plenty of risks associated with moving in this direction, ranging from reliability to security.

One of THINKstrategies’ most recent clients, Exoprise, recently conducted a survey which found plenty of interest in Cloud-based email alternatives, but an equal amount of apprehension about the uncertainties regarding these offerings as well.

Exoprise has devised a Cloud-based tool which can help organizations evaluate their on-premise versus Cloud email alternatives by assessing current and projected usage patterns. It is offering free access to the assessment tool so IT and business decision-makers can determine if Microsoft 365 fit their needs.

Unlike in the case of Microsoft’s many ill-fated operating system adventures of the past which it was able to withstand because there was limited competition, a failure to jumpstart its Cloud offerings with Microsoft Office 365 will adversely impact its position in the market because of the growing success of Google Apps and other Cloud alternatives.

Therefore, you can expect Microsoft to put plenty of effort into making Office 365 a success to better position the company in the Cloud for the longhaul, even if it cannibalizes some of its traditional Office software revenue initially.

One of the most vexing challenges facing today’s IT and business decision-makers is how to integrate critical corporate data across a widening array of on-premise and on-demand systems and applications.

Many believe that the age-old data integration issues of the past have only been compounded by today’s rapidly expanding assortment of Cloud-based solutions which raise the expectation of easy end-user access from anywhere at any time.

While there are a growing number of application program interfaces (APIs), Web-based connectors and Cloud-oriented systems integrators that are reducing the difficulty of overcoming this integration issue, it still represents an important impediment that many organizations are reluctant to face.

Intuit announced a new program yesterday aimed at addressing the data integration issue. The Intuit Anywhere program promises to give software developers a new method of extracting QuickBooks data directly into their third-party applications, including web and mobile.

This new data export and integration capability is an extension of the Intuit Partner Platform (IPP). It utilizes a set of widgets and data services to permit customers to more easily take their data generated within QuickBooks and import it into the other Intuit-ecosystem apps which help them run their businesses.

In conjunction with its unveiling of the beta program which is aimed at testing and fine-tuning the Intuit Anywhere capability, the company also announced six new IPP partners that will be participating in the beta program:

• Bill.com 
• Concur 
• eBay 
• FreshBooks 
• Mavenlink 
• MethodCRM.com

Intuit has recently been more actively promoting the scale of its Cloud business, power of its platform, and reach of its alliance partners in the market, including Microsoft and Salesforce.com.

The new Intuit Anywhere program promises to make the data captured in its Quickbooks flagship product more ubiquitous which should strengthen Intuit’s position in the market.

Plenty of has been written about last week’s disruption of Amazon’s Web Services (AWS) which took hundreds of organizations offline, including many rapidly growing start-ups and evolving aspects of enterprise operations.

(The best I’ve read summarizing the questions raised and lessons to be learned as a result of the AWS outage was by my friend Phil Wainewright.)

After suggesting at the beginning of last week that recent issues surrounding Google could derail the rapid growth of Cloud Computing services, it is obvious that Amazon’s problems must be added to the list of sobering events which will certainly cause many entrepreneurs and enterprise decision-makers alike to re-think their Cloud strategies and deployment tactics.

Google’s support issues, combined with Amazon’s service availability problems, clearly make real two of the three greatest fears which IT and business decision-makers face when considering the widening array of Cloud alternatives. The third primal fear regarding Cloud services is the potential for a serious security infraction. To date, Cloud providers have outperformed many organizations in fending off security threats. But, a well-publicized violation would raise serious concerns about the short-term viability of Cloud services for mission-critical, core applications and business processes.

I say ’short-term’ because we all have short memories, or maybe it is fairer to say higher tolerance levels than we realize when it comes to our fears regarding web-based services. For instance, Salesforce.com has only seen greater growth since it suffered a series of serious service disruptions in 2006, and has not seen any appreciable service abandonment as a result of subsequent outages more recently. Another example is NaviSite which suffered a outage that lasted nearly a week in 2007 and was recently acquired by Time Warner Cable for $230 million.

As I said back in December 2007, “Failure Doesn’t Matter”.

However, if these problems persist not only will Amazon’s credibility and competitive position be compromised, but the commodity-services oriented aspects of the Cloud Computing business will also be set back significantly.

In the meantime, the winners as a consequence of last week’s outage and Google’s support issues are the established players who may not be offering bleeding edge services at the lowest available costs, but are promising more reliable services at reasonable prices. For instance, folks at IBM timed things perfectly with their new SmartCloud services. And, Verizon completed the acquisition of Terremark just in time to capitalize on Amazon’s problems.

There are also lots of smaller players who can win greater attention as a result of Amazon’s outage. I spoke to SmartBear in the midst of the AWS issues last week to learn more about its acquisition of AlertSite and they were eager to discuss how their combined capabilities could help organizations mitigate the risks associated with Cloud availability and performance issues.

Hopefully, Amazon and other Cloud service providers will learn important lessons from last week’s outage which will lead to improved service quality going forward. In the meantime, this event will make corporate decision-makers more aware of the tough questions they must ask the Cloud providers about their services and the standards they should set for their performance.

As I suggested a year ago, I also expect last week’s outage to reset the competitive landscape and the criteria for success, moving the advantage from the price leaders to the quality service providers.

(Disclosure: I have done consulting work with Salesforce.com, NaviSite, IBM and Verizon.)

The recent flurry of major vendor announcements regarding their new Cloud Computing initiatives, latest acquisitions and offerings clearly shows that the “Cloud Rush” is in high gear.

Here’s a quick list of the announcements which have caught my attention over the past few weeks in chronological order since HP unveiled its Cloud ‘vision’ last month, and my views regarding their significance,

• Cisco Announces Intent to Acquire newScale, 03/29/11  – Cisco Systems has been pushing into the ‘new data center’ environment for a while with its Unified Computing solutions. It acquired newScale to improve its provisioning capabilities to make it a more viable Cloud vendor for enterprise customers and service provider partners.
• Salesforce.com to Acquire Radian6, 03/30/11  - Now that Salesforce.com has succeeded in popularizing its Chatter social networking capabilities, it wants to give its customers the necessary tools to monitor, manage and measure the effectiveness of these new features.
• Intuit, Salesforce.com Announce Strategic Alliance, 04/01/11  -  Despite its investment in FinancialForce.com and support of numerous integration tools vendors that link salesforce.com’s CRM solution with QuickBooks, salesforce.com is seeking to strengthen its position in the SMB/SME market by building a closer working relationship with Intuit which is also working with Microsoft. Intuit is also trying to reinforce its position within the SaaS/Cloud ecosystem.
• SugarCRM Acquires iExtensions, the Market-Leading CRM for Lotus Notes, 04/05/11  – SugarCRM’s growth is further proof of the growing acceptance of Open Source solutions in the market. Its acquisition of iExtensions strengthens its ties with Lotus Notes which is a pivotal part of IBM’s SaaS/Cloud efforts. And, its growing relationship with IBM illustrates how SugarCRM hopes will gain an even greater foothold in mainstream businesses. Don’t be surprised if this alliance evolves into an acquisition in the months to come.
• SITA Launches Dedicated Air Transport Industry (ATI) Cloud, 04/06/11  – I’ve been saying for the past year that the SaaS/Cloud market is entering a third stage in its evolution, moving from broadly focused horizontal business and IT management apps to a new generation of industry-specific SaaS/Cloud solutions. This new stage is a clear indication that the SaaS/Cloud movement is gaining acceptance across nearly every industry and is now viewed as an important mechanism for reengineering the fundamental business processes within various sectors. SITA has been supporting the operating needs of the airline industry since 1949, and is among the latest industry-specific providers to launch a strategic initiative aimed at Cloud Computing.
• IBM Joins Forces With Over 45 Organizations to Launch Cloud Standards Customer Council for Open Cloud Computing, 04/07/11  - IBM has been aggressively pursuing Cloud opportunities since the concept first gained attention. It made an initial effort to spearhead the Cloud standards process which caused a lot of controversy because many people were suscipious of IBM’s motives at the time. Today’s announcement will generate a more positive response because it is supported by an impressive cross-section of enterprise organizations and Cloud vendors. It also recognizes and endorses the existing Cloud inititives of various standards bodies, the most recent of which was announced by the IEEE on Monday. IBM also rolled out another wave of Cloud products and services today that further expands its portfolio of hardware, software and service offerings, and puts additional pressure on its competitors.
• Dell Invests $1 Billion in Technology Solutions and Services to Help Customers Drive Business Results Today and in the Future, 04/07/11  – Dell is not about to let IBM, HP or Oracle outpace its own Cloud initiatives. The company tried to demonstrate today the magnitude of its efforts to develop and deliver Cloud solutions and services aimed at enterprises and end-users. Dell can tell a good Cloud story because of its long history of delivering automated systems and offering Ecommerce services. It has also done a surprisingly good job leveraging its Perot Systems professional services and systems integration services to create vertical market solutions. Click here to read my initial vision of Dell’s Cloud capabilities two years ago.

These announcements and initiatives illustrate the significance of the Cloud Computing phenomenon. They also show the scalability of the market opportunities, extending from SMBs/SMEs to major industries. And, they demonstrate how the Cloud is fundamentally changing the competitive landscape and customer expectations.

Salesforce.com unveiled a series of important enhancements to its Software-as-a-Service (SaaS) service-desk management capabilities this week aimed at helping businesses more effectively track and respond to the escalating volume of data feeds from Facebook and Twitter.

The company’s Service Cloud 3.0 announcement coincided with its CloudForce 2011 event at the Javits Center in NYC, in the backyard of ‘Corporate America’, the financial services sector and the traditional media world to maximize its attention.

The new round of enhancements were primarily focused on enabling users of Salesforce.com’s service-desk management platform to better monitor Facebook and Twitter feeds, and track their response to comments, complaints and other service requests via these increasingly important social networks.

Salesforce.com made sure to brand each feature as a separate offer to ensure it gained as much attention as possible, including Salesforce.com for Facebook and Salesforce.com for Twitter.

The new monitoring capabilities are actually enabled by a third-party company, called Radian6, which is now selling its solution on Salesforce.com’s AppExchange as well. By coincidence, people I know at SAP also use Radian6 to track Facebook and Twitter data feeds. So, don’t be surprised to see Radian6 acquired quickly by one of the two companies if Google, Microsoft or another suitor doesn’t swoop in sooner.

Despite the fact that most of the enhancements unveiled by Salesforce.com this week won’t be available for another quarter or two, its announcement overshadowed SAP’s own attempt to assert itself in the SaaS and social networking arena by previewing a new portfolio of on-demand business applications at CeBit aimed at responding to Salesforce.com’s growing success and the overall acceptance of SaaS/Cloud-based alternatives to legacy, on-premise applications.

I had an opportunity to get a private briefing re: SAP’s new offerings before this past week’s announcement (as I did for Salesforce.com’s Service Cloud 3.0 announcement) and was impressed with their functional and social networking capabilities, as well as the company’s intensifying efforts to deliver cost-effective SaaS solutions. However, it still has a long way to go to convince customers and the broader marketplace that it can succeed in the SaaS marketplace after numerous false-starts.

Meanwhile, Salesforce.com isn’t taking its foot off the gas pedal as it extends its lead as an innovator, and market/mindshare leader.

Disclosure: Salesforce.com and SAP are THINKstrategies clients.

Social networking is one of the big three themes of 2011, along with Cloud Computing and Mobility.

Salesforce.com has been pushing its Chatter social networking platform for the corporate class with the new public service, Chatter.com, promoted with two ads during the Super Bowl halftime show.

Today, Constant Contact made a move to keep pace with the social networking expectations of its customers by acquiring Bantam Live, a contact management and social CRM provider for $15 million. This acquisition follows Constant Contact’s purchase of NutshellMail last May which enabled the email marketing company to link its messages to Twitter and Facebook.

The Bantam Live acquisitoin goes beyond simply giving Constant Contact subscribers a Facebook-like user interface and experience. It also includes contact/CRM, task management, calendaring, deal tracking, and project management, among other capabilities.

By adding these functionalities onto its email marketing platform, Constant Contact is pushing to dramatically expand its role within its customer accounts. Rather than being a tool which users only open when they are conducting email campaigns, a broader set of potential users now have multiple reasons to utilize it to coordinate a wider array of everyday activities.

In fact, if social networking tools like Facebook and Twitter continue to outpace traditional email as the primary communications and collaboration platform for a new generation of businesspeople, then Constant Contact could become the MS Outlook of the future for a broad, cross-section of small- and mid-size businesses (SMBs) which already depend on its email marketing capabilities.

Some might suggest that the modest price paid for Bantam Live diminishes its strategic importance. All you have to do to dispel that idea is to look at the major impact Salesforce.com’s unheralded acquisition of GroupSwim at the end of 2009 that became a cornerstone of Chatter.

Many in the SaaS/Cloud world have been speculating about when Salesforce.com will acquire a marketing automation vendor to round out its ‘Sales Cloud’. Now, Constant Contact is suggesting that its marketing automation platform could be the centerpiece of a broader set of day-to-day business functions.

Disclosure: I’m a Constant Contact user and Salesforce.com is a THINKstrategies client.

The year of the Cloud has come to a climax at Salesforce.com’s Dreamforce conference in San Francisco where over 30,000 registrants converged to celebrate the rapidly expanding world of ‘on-demand’ solutions and collaboration tools.

Salesforce.com used the event to beat back the recent efforts of Oracle and Microsoft to gain a share of the Cloud Computing market with a new round of initiatives aimed at building on its phenomenal momentum and success.

The two most significant announcements on Day One were Salesforce.com’s offer of free Chatter accounts across its customer base along with a public version of the social networking service in February, and a new Database.com offering as a spin out of its Force.com Platform-as-a-Service (PaaS).

Day Two began with the news that Salesforce.com plans to acquire the Open Source oriented, Ruby-based application development platform, Heroku, for $212 million in cash. Salesforce.com and BMC Software also announced that they are joining together to offer RemedyForce, a new Cloud-based IT service management and support offering built on Force.com. Salesforce.com also unveiled SiteForce, a new and improved version of its website design tool which was introduced previously.

Talking About Chatter

A year ago, Dreamforce attendees responded to the unveiling of Chatter with a lot of apprehension about why they should permit a Facebook-like social networking tool into their organizations. In response to this lukewarm reception, Salesforce.com put its marketing engine to work to overcome this hesitancy and has generated growing customer acceptance. 

Much of the opening session of Dreamforce was focused on the practical benefits of Chatter in corporate environments through a series of demos of use-cases and customer success story testimonials. Salesforce.com also emphasized how Chatter bridges the old and new worlds of the business user by linking to Microsoft Outlook and mobile devices.

Salesforce.com announced Chatter Free to extend its reach further into organizations beyond the sales and marketing departments. This initiative will permit Salesforce.com users to invite others within their organizations to utilize Chatter, in the same way Facebook users can invite friends to join their social networks.

With less fanfare, but possibly of greater significance, Salesforce.com plans to also roll out a public Chatter.com service in February aimed at popularizing Salesforce.com’s social networking capability in the open market. Both these moves will broaden Chatter’s footprint within organizations and brand equity in the marketplace. These moves will also make the folks at Facebook rethink whether they should have pursued the corporate market rather than relinquishing it to Salesforce.com. It will also get the attention of SuccessFactors which has been proclaiming that its Business Execution Software solution has a greater installed base of end-users than Salesforce.com.

Fortifying Force.com

Salesforce.com isn’t just seeking to permeate the enterprises via Chatter. It also wants to convince the developer world, both independent software vendors (ISVs) and internal enterprise developers, that Force.com is a credible PaaS for a new generation of enterprise-class, Cloud-based, mobile apps.

In its typical style, Salesforce.com unveiled Database.com as a new capability even though it is actually a part of Force.com which has been unbundled to create a new standalone offering and point of entry to Salesforce.com’s PaaS environment.

The standalone Database.com capabilities are being offered to respond to the changing way in which applications and databases are being architected in a more pluralistic fashion in the Cloud. The goal of Database.com is to democraticize database development, and give Salesforce.com’s customers and partners another reason to expand their use of its applications and PaaS. 

Salesforce.com has also been working hard to fend off competitive claims and developer concerns that its Force.com PaaS is too proprietary. It made a strong move in this direction with its alliance with VMware earlier this year, which produced VMforce.

Salesforce.com’s acquisition of Heroku reinforces this point, quickly giving Salesforce.com a strong foothold in the Open Source/Ruby application development environment, and immediate access to the rapidly growing Heroku developer community.

Heroku is considered by many to be the top Ruby platform in the Cloud market. The company has experienced 50% growth in application development activity in the past few weeks alone according to its Founder/CEO during his keynote presentation. Heroku will maintain its brand and become Salesforce.com’s seventh Cloud offering.

The Heroku acquisition and Database.com are geared to the new world of social, mobile apps. They are also intended to offset Microsoft’s aggressive efforts to gain customer and partner acceptance of its Azure PaaS, and undercut Oracle’s ‘false cloud’ offerings which it calls “Cloud-in-a-Box”. The Heroku acquisition is also a dramatic contrast to SAP’s purchase of Sybase, with Heroku representing the rapidly growing world of Cloud-based applications and Sybase viewed as an old-world development vendor attempting to recreate itself around mobile apps.

As Salesforce.com’s executives strongly stated during an industry analyst/press briefing, the message which the company is trying to convey to the market with this acquisition is that Force.com will be open and that Salesforce.com is going to be a platform company. A number of enterprise customers confirmed the importance of Salesforce.com’s PaaS efforts in their decisions to select the company as a strategic vendor.

SaaSifying IT Management

Salesforce.com’s announcement of RemedyForce in conjunction with BMC is significant for a number of reasons.

It is the company’s first attempt to provide a solution aimed specifically at the IT organization which is increasingly embracing SaaS-based alternatives to traditional IT management software. I’ve been telling clients and others about that the SaaSification of IT management and why this trend in the Cloud Computing market eliminates another barrier to greater customer adoption.

It is also the first time Salesforce.com has teamed with another company to launch one of its product-lines, or “Clouds”. This represents an important endorsement for BMC, as well as a risk for Salesforce.com. Teaming with an established ISV is an interesting choice for Salesforce.com. Like every established ISV which has attempted to add a SaaS component to its portfolio, it hasn’t been an easy road for BMC. But, the company has a highly committed CEO and has built a SaaS solution on Force.com which is gaining customer acceptance in the market.

This alliance puts Salesforce.com in the peculiar position of depending on a partner for the success of one of its product-lines. It also renews questions and concerns among its other partners about who gets preferential treatment within Salesforce.com’s ecosystem and why.

Closing Thoughts

One of the lingering complaints about Salesforce.com’s solutions is their premium price. Marc Benioff even joked about this point in his opening remarks at Dreamforce and got a hearty laugh from the audience. In an attempt to capitalize on this issue, Microsoft has launced a marketing campaign offering $200/user rebates  to Salesforce.com customers who jump ship in favor of Microsoft’s Dynamics CRM Online.  Benioff made light of Microsoft’s PR ploy by bringing the actor/model who is pictured in the Microsoft ads on stage during the Day Two morning keynote session and successfully convincing him to come back to Salesforce.com.

All joking aside, Salesforce.com’s premium prices hasn’t slowed its tremendous growth and hurt customer satisfaction/retention rates, or diminished the enthusiasm of the customers and partners attending Dreamforce this year.

The buzz and activity at Dreamforce 2010 is not only a clear indication of the Salesforce.com’s growing success, but also an impressive illustration of the widening movement to the Cloud.

[Disclosure: Salesforce.com paid for my hotel accommodations during my attendance at Dreamforce.]