Salesforce.com and Where SaaS Goes From Here (Eventually)

Salesforce.com and Where SaaS Goes From Here (Eventually)

Joshua Greenbaum’s recent article had a few good points that I’d like to reiterate, especially as they relate to Salesforce.com’s (SFDC) struggles to get its growth to the next stage.

SFDC is struggling to find the next big thing for itself, and Greenbaum says organic development frameworks/guidelines ain’t cutting it.  Greenbaum, via Cowboy 2.0, suggests that Force.com software partners are having the ground rules changed midstream, and draconian development and platform guidelines are denying otherwise viable 3rd-party apps.  In this quest for platform and value control, Greenbaum asserts that SFDC is terminally limiting its capability for organic expansion into a broader niche.

[…] the scuttlebutt at this writing is that he has: SFDC is pulling the plug on a number of existing partners’ efforts to build on Force.com, largely in an effort to protect SFDC’s turf and stifle interesting new apps that don’t fit the development model (ie. our way or the highway) of Force.com. It’s obviously SFDC’s prerogative to limit its PaaS play to whomever it likes, but closing the door on potentially worthwhile apps that are not built on native Force.com technology (the gist of Cowboy’s problem with SFDC) is a move to limit the scope and influence of Force.com at a time when SFDC can’t really afford more limits on something that is showing very limited results already.

The next stage of speculation is logical: if organic platform development efforts are faltering, then infusion is needed.  And infusion, in this sense, means acquisition.  While this might seem a logical decision path when internal technology investment dollars aren’t getting the job done, often they’re a deal with the devil.  Yes, you acquire new technology, new value and new customers, but does it take your concept — your platform — to where it needs to be?

And just where is that, anyway?  Greenbaum sees it thusly:

Which leads me to a discussion of where the future of SaaS and On-demand is going, and why, so far, SFDC isn’t heading there any time soon. The basics of my version of the future of SaaS is this: the next generation of SaaS vendors will be providing value-added services, based on the network effect that they can command as they aggregate data and processes from their customers and partner networks, that are simply impossible to provide on-premise for love nor money. It’s the effect you can find at established companies like E2Open and GT Nexus, among others: a value-added collection of services and capabilities that derive from the ability of a SaaS vendor to leverage their network and the connections that network provides to do things that couldn’t be done before.

Interesting concept, especially the bit about SaaS’s big value being it’s ability to leverage the network effect, but how close are we to this?  With tenuous understanding of how this will all look as a finished offering, the tendency to default to the path of least resistance is strong.  That’s why we see development frameworks with strong-armed control (my environment, my rules) and the desire to acquire new value from promising up-and-comers.

(Or to get bought outright, but really, that’s a bit too passive to seriously be on any war-room charts.  I hope.)

SaaS as a concept is starting to overcome some of its ideological stiction within the marketplace, which means customers are buying into the idea.  But when the customers come, so does the impetus to mature into something more flexible and scalable and customizable to their business (sound like ERP anyone?), which begs the question Greenbaum is asking: where do we go from here?  With SaaS standing on its own two feet (sometimes brilliantly), it’s not time to be modest about the platform’s real-world roadmap.

Author(s)