hosted

At its user conference in San Francisco this week, Salesforce.com shared its plan for conquering the world.

Salesforce has made a name for itself by offering sales management and CRM applications over the web. I’ve used it for groups as small as three or four people. Some corporations use it to serve thousands of sales people. I chatted with a Salesforce.com executive on a flight to Europe a few months back. They have a very solid value proposition. Since the software resides on their servers, the user:

Doesn’t need any hardware beyond laptops or terminals.
Devotes a few staffers rather than dozens to keeping things rolling.
Doesn’t license software. Doesn’t have to deal with upgrades.
Buys only as much as needed.
Doesn’t waste time evaluating vendors, negotiating deals, etc.

More importantly, offloading IT tasks enables a business to focus on its core activities. Investments in core yield larger returns than investments in utility functions. The service Salesforce.com provides is core to them, not to you.

Why aren’t corporations snapping up hosted applications like hungry fish? I have heard two arguments, both of which are presently obsolete.

The first concern is Security. What if hackers walked away with our customer data? In reality, I imagine your data is safer with Salesforce than in your own shop. Most data theft is an inside job. Sometimes it’s “social engineering.” I’ve heard that the weakest link is often the IT department smokers who rarely question the authenticity of the new guy who asks all those questions. Either way, hosts have more experience fending off the bad guys than your company will ever attain.

The second issue is legacy. You have staff, hardware, systems, and so on. The hardware and “stuff” are sunk costs. You may have spent tens of millions, but if your incremental cost is lower using someone else’s gear, it’s time to sell yours. And staff? It’s harsh, but that’s an unnecessary cost.

Let’s see now. Bandwidth is cheap and getting cheaper. Talent is scarce and getting scarcer. Partnering with a winner like Salesforce is now a best practice instead of a career-threatening move.

Back to world domination. Hal Christensen, the EPSS pioneer, attended the Salesforce.com user conference. As we talked immediately afterward, he explained Salesforce’s plans. Essentially, Salesforce wants to broaden from being an application to being a platform. Online applications in any flavor you want. Salesforce will be shortened to Force.com.

This makes a lot of sense to me. The timing seems right. Some organizations will go for shifting all applications to the web. No more hassles with IT. Why dork around with an LMS when you can push it off on Force.com. And who couldn’t love this: