Wednesday, December 24, 2008

PLATFORMS :: How Apple and Facebook Influence

How Apple and Facebook Influence

I’ve got to confess that for the last 10 years I’ve largely ignored I knew it was growing through sales of its service, a very fancy Rolodex that helps companies keep track of customers and prospects. And I knew it evangelized the idea that applications for big companies can be delivered through Web pages rather than as software run in a company’s own data center.

Marc Benioff. (Credit: Peter DaSilva for The New York Times)

But I’ve tried to add just a bit of simplicity to my life by avoiding enterprise issues to write about technology used by consumers. When I sat down for the first time last week with Marc Benioff, the company’s chief executive, it became clear that Salesforce is now taking some interesting ideas from consumer-facing companies like Facebook and Apple. And it is also in the middle of a metamorphosis that could put it in the center of the development of services that consumers will start using.

Essentially, Salesforce is changing from a company that sells one suite of corporate applications to a platform on which many software companies can deliver applications. It has even added features to let its clients develop Web sites on which they can interact with and sell to the general public.

And, as I wrote on Monday, it is developing systems to let its applications trade data with other companies that offer cloud computing services, like Google, and Facebook. (My first instinct when talking about this sort of technology is to note the privacy questions that come up when clouds start talking to one another.)

As is so common these days, this strategy puts Salesforce in the position of trying to cooperate with the companies that are its biggest rivals in the world of cloud computing. Mr. Benioff has lots of reasons why Salesforce can compete with these companies, as well as I.B.M., Microsoft and all the others launching themselves into the clouds. I’ll leave it to others to write about the software architecture and data-center design of Salesforce.

But I do want to take note of how the company is connecting to consumers and the ideas emerging in consumer technology. One theme is how the sort of face-to-face sales effort that Salesforce has helped companies manage is now merging with the self-service ethos of the Web.

Mr. Benioff showed a high-tech, high-touch application developed for the Harrah’s casino chain to help the personal sales representatives it assigns to high rollers. It creates a Web site for the gamblers that lets them communicate about coming trips with their representative. It’s sort of like Expedia, but you don’t have to work out the details. You simply identify when you want to go, where you want to eat, and what shows you want to see. Your rep figures out the times and dates, then posts the resulting reservation back on the site.

As for drawing inspiration from the consumer technology world, Salesforce is just starting its own version of Apple’s iPhone App store, but for businesses. Until now, third-party software developers had to manually process sales for their applications that are delivered over the Salesforce system. Now there is an online store that lets existing Salesforce users click to buy add-on software themselves.

Perhaps most interesting to me was how the broad path that Salesforce is on mirrors that of Facebook (and in some ways that of Yahoo and Google).

Both Salesforce and Facebook started out as rather handy Web-based services for keeping track of contacts. And both have realized that these lists of people, and the underlying technology to manage them, can be central to a lot of different problems that their customers may want to solve. So both are now turning into “platforms” on which other companies can create and run a wide range of applications.

“We came into this by accident,” Mr. Benioff said. “We did not start the company as a platform company.” But he said that the process of creating one program that serves customers turns out to be a great way to build a more flexible environment. Other programs, like Lotus Notes and Microsoft Excel, evolved in a similar way. Even Microsoft Windows was first an add-on application for Microsoft DOS.

“All platforms started as killer apps,” Mr. Benioff said.

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