Salesforce offers all-you-can-eat tariff

Hosted CRM firm Salesforce.com plans top-end licensing for its most demanding on-demand users

Salesforce.com will today announce a top-end licence that will give power-hungry users more flexible access to the on-demand platform. At the same time, the firm has rebuffed suggestions it should offer an on-premise version of its service.

The new Unlimited Edition stands above the current top-end Enterprise Edition, offering six times more storage, Platinum technical support, and the ability to run any number of applications. It is also the first edition to offer inclusive access to Sandbox, Salesforce’s recently introduced service for testing plug-in applications.

The new licence fits Salesforce’s AppExchange strategy for offering “an eBay of applications” that lets firms try and buy slot-in programs to extend functionality across the Salesforce hosted platform. Salesforce said there are now 4,400 installations of AppExchange programmes, although only some of these are being paid for by customers.

Unlimited Edition allows access to any number of AppExchange applications and custom tabs, as well as 2,000 custom objects. “This is an edition that will support your entire business so you can pick and choose what you want to run,” said Phill Robinson, Salesforce vice-president of marketing. “It’s the equivalent of a 60GB iPod.”

Analysts said the new licence makes sense. “If you’re going to replace the on-premise software paradigm you have to replace all the things that are good about it, such as testing, removing constraints on the number of applications and having a significant amount of storage,” said Denis Pombriant, managing principal at analyst firm Beagle Research.

Although Salesforce continues to enjoy hyper-growth, at least one analyst believes it should consider offering an on-premise version of its service.

Scott Nelson, managing vice-president of customer relationship management (CRM) at analyst firm Gartner, said the firm would need a non-hosted adjunct to its online capabilities in order to succeed in winning more blue-chip accounts with large numbers of seats.

Rivals such as Siebel, Microsoft, SAP, Sage and RightNow Technologies offer their CRM software in both on-premise and hosted formats but Salesforce has shown no sign of pursuing a dual-pronged strategy.

“I think it’s something they should seriously look at,” Nelson said, speaking ahead of the Gartner CRM Summit in London next week, 14-15 March. “[Otherwise] they will limit themselves to a segment of the market. Hosted software is skewed to small and medium-sized firms. There are two alternative delivery models and its makes good, logical sense to support both and share data across them. If you’re an SAP, targeting large, industrial firms, hosting will never be the dominant business model.”

However, Bruce Francis, vice-president of corporate strategy at Salesforce said there were no plans to change the pure online strategy. “The economic advantages are much more efficient for customers and I’ve yet to see a compelling hybrid model,” he said.

Proponents of the hybrid model say it provides customers with flexibility and scalability, although RightNow argued that most customers use on-premise software as an on-ramp then turn to the hosted model when convinced of scalability, availability and other factors.

“Choice is critical to our customers [but] we continue to see greater than 90 percent of our new customers choosing to host with us,” said Jason Mittelstaedt, vice-president of marketing at RightNow. “If anything, the tiny minority that’s choosing to run it on premise are coming back to hosted.

Salesforce said dual-mode selling leads to internal confusion, such as uncertainty as to which product to push. “On-ramps make road pizza out of your business model,” Salesforce’s Francis said.

Even Gartner’s Nelson thinks it is unlikely that Salesforce will offer an on-premises service, given its long-standing criticisms of running CRM behind the firewall and marketing that includes a logo with a ‘No Software’ banner.

“They clearly wrote their software for hosting and they probably won’t change because it goes against their message,” Nelson said.

Separately, the Trust Salesforce site, showing availability of the service globally, has gone live.