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Salesforce pitches to become the 'iTunes' of enterprise apps

Sharing, ripping, charging for CRM

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Tapping into the rhetoric around Web 2.0, hosted CRM provider Salesforce.com has billed its latest online service as the "iTunes of enterprise applications."

Chairman and chief executive Marc Benioff has launched AppExchange, a hosted service for ISVs creating, posting and sharing business applications for download by end-users.

AppExchange, part of Salesforce.com's Winter 06 CRM release, also "mashes up" - or integrates - customers' account information like sales data with third-party services - such as mapping from Google Maps - through the open Salseforce.com API.

At a launch event in San Francisco on Tuesday, Salesforce.com demonstrated the Winter 06 interface featuring a Google Maps tab. When the tab was clicked, it showed the familiar Google map only marker bubbles contained information about sales teams. Sales teams were then re-assigned with business rules set through the Salesforce.com system.

Benioff said Salesforce.com is now like the iPod and iTunes store in that it allows users to receive content from a directory while allowing ISVs to post content and be compensated for their work. AppExchange contains 162 applications including Skype's free VoIP internet calling service and Business Objects' Crystal Reports for business intelligence.

Benioff separately told The Register that Salesforce.com hoped to make money from AppExchange by increasing its subscriber base, rather than charging ISVs for posting applications or taking a percentage of the money developers make using the service.

AppExchange and the Winter 06 release creates the "business web", using technologies like browsers, search, marketplaces and RSS pioneered in the "consumer web."

Benioff asked rhetorically: "Why can't there be an eBay of enterprise applications and an iTunes music store of enterprise applications, where we can write to the services we need to run our business? If it's so easy for us to get our music and news, how do we do that for our business as well?"

Salesforce.com has introduced two new datacenters worth $50m with mirroring planned next month to support the service. Their introduction follows last year's outage in the Salesforce.com service that Benioff said was due to a bug the company hadn’t “seen before.”

Benioff believes AppExchange helps maintain Salesforce.com's lead over CRM rivals Oracle and SAP and aspiring player Microsoft. All three have spoken of separately providing their own hosted CRM services and integrating their underling software architectures.

In a pointed stab at the trio, Benioff said: "A lot of companies are not here. They are still back talking about stacks of applications, delivering it on old technology and delivering stacks on old CDs. The technology is so big you have to ship it on a ton of DVDs. You are not able to create all this synthesis or leverage," Benioff said.

He added Oracle, SAP and Microsoft are unlikely to move to hosted services because it threatens their existing business model, based on software maintenance revenue streams.

He furthermore sought to prove AppExchange and Salesforce.com are the kind of services that traditional, large, enterprise-class customers currently using client/server software from Oracle and SAP can – and do – use. Salesforce.com has been forced in recent years to prove its is suited to the needs of large users and not just small and medium sizes businesses (SMBs).

Accordinng to Benioff, Salesforce.com has 6,700 subscribers at payroll specialist ADP, 4,500 at Cisco Systems, 3,900 at Symantec and 3,100 at Sprint/Nextel. ®

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