Line56 writes about the face-off between NetLedger and Salesforce.com, as both now tread on each others markets.
NetLedger will announce a migration program, called the Legacy SFA Switch Program, which includes products, a migration wizard and license credits that help companies move from salesforce.com.
On the other hand, salesforce.com is pushing into the back-office. It plans to launch Billing Edition in the first quarter of 2003. The new billing system will include invoicing, contract management and order management, and will be a part of salesforce.com’s overall service.
The interesting question: what comes first – ERP or CRM?
The question though, is what should come first — CRM or ERP? NetLedger’s Nelson says: “All data goes to the accounting system. It’s the system of record and the key CRM data repository. It’s taken us years to knock out accounting… and simply to bolt some ERP functionality onto CRM isn’t going to work.”
Katherine Jones, managing director of enterprise business applications at Aberdeen Group, agrees that CRM might not be the best starting point for developing a pre-integrated, front-office and back-office solution. “The world doesn’t revolve around CRM,” she says, adding, “To be trite, you don’t want the tail wagging the dog.”
But Marc Benioff of salesforce.com points to a landscape littered with failed CRM implementations as testament to the difficulty in building and selling cutting-edge CRM solutions. Moreover, he says many companies already have an ERP system and won’t dump it just to go with a single, integrated offering. ” Reality is everybody makes CRM decisions independently from their financial decisions,” Benioff says.
On the revenues front, NetLedger’s revenues are USD 10 million while Salesforce.com is at USD 60 million. CRM ahead of ERP?
San Jose Mercury News has an in-depth look at Marc Benioff and his radical business model:
In the new era, software programs will be sold in mass quantities for low prices like any other commodity. “My personal goal is to demonstrate this is the next wave,” Benioff said.
The way he sees it, the software industry has long abused its customers, forcing them to hire expensive consultants to customize the code and install the programs on in-house computer systems in order to gain an edge over their competitors.
Benioff, and a growing number of sympathizers, say it makes more sense for customers to rent the programs and let software pros handle the technical side. Users tap into Salesforce.com over the Internet, the same way they order books from Amazon. There is no installation, no customization and updates happen effortlessly. Competitive advantage comes from getting the benefits from the application far quicker and for much less money.
Such a radical change in the way the industry works could send some of Silicon Valley’s biggest software names into a tailspin. Just as mini computers displaced mainframes, and PCs dislodged workstations, software-as-a-service could turn industry heavyweights into has-beens.
Indeed, Benioff predicts that powerhouses like PeopleSoft, SAP and Siebel Systems will eventually be swallowed by other companies. It’s the natural order of technology, he says. The new generation grows up to consume its parents and sometimes entire industries.