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Salesforce.com Launches Hype-as-a-Service, Erodes Trust

By on Sep 11, 2009 Editor's Pick 19 Comments

Salesforce.com does a lot of things well, and has been a positive force for innovation in this industry. Recently the company announced the “Service Cloud 2″ and I was briefed by Alex Dayon, the SVP who heads up the company’s push into customer service. Dayon came to Salesforce.com with the acquisition of Instranet last year.

Essentially the news is that Salesforce.com now offers a cloud-based customer service solution that fully integrates Instranet’s technology into the Force.com platform. Also announced was the general availability of Twitter integration, such that users can capture information from Twitter and push back tweets.

This is a very nice announcement and shows that Salesforce.com is serious about becoming a leader in this space. Dayon says the market is “bigger than SFA” and is “our next billion dollar opportunity.”

The size of that opportunity along with a push for new growth options beyond SFA may explain why the hypemeisters at Salesforce.com have gone overboard on marketing statements. For example, the press release says:

“A year after salesforce.com acquired Instranet, salesforce.com will offer the world’s first Knowledge-as-a-Service, the first ever multi-tenant knowledge base designed for cloud computing.”

Really? What have Parature and RightNow been doing all these years?

And then there’s this…

“8,000 companies have already standardized on the Service Cloud including Extra Space Storage, NJ TRANSIT and Plantronics.”

That’s interesting, because Plantronics has been a long-time RightNow customer, according to RightNow’s VP of Products David Vap.

Now, I’m not writing this post to defend Parature, RightNow or anyone else. That’s their job. Aggressive marketing is part of the game in this industry. Software marketing is like playing basketball in the NBA. You’d better sharpen up your elbows and get ready to bang bodies.

But in this case Salesforce.com is going too far promoting statements that are simply not true. This Service Cloud 2 announcement is reverting to old Siebel tactics: Claim market leadership, make unsubstantiated claims, then build a bandwagon effect to acquire customers based on that hype.

The problem is, once trust is damaged it’s hard to get back. Just ask Tom Siebel.

For example, another statement in the press release claims that Salesforce.com customers have seen a “28% increase in customer satisfaction, 25% increase in call deflection” and other similar benefits. Now I’m not inclined to believe any of these claims. Just more hype from a vendor trying to sell something.

This is also not a shining moment for supposedly independent industry analysts covering Salesforce.com. Why has no one said anything publicly about these obvious misrepresentations? Could it be because Salesforce.com is a client? Then why should end user clients trust their advice?

And then there’s the media. I’m disappointed that experienced industry journalists from prominent magazines and web portals have also said nothing. Just reprint the press release and it’s all good. This lack of independent, critical coverage also undermines trust in what they publish. Big vendors and advertisers shouldn’t get a free ride.

So, my advice to those considering Salesforce.com is simply this: Verify all claims. If you get the runaround, then look elsewhere. There are many other choices for SaaS vendors in the market. Pick one that you trust.

In the end, what these egregious marketing tactics do is erode trust in the software industry. The SaaS movement has made huge progress over the sell-it-and-run license software days. Please, Salesforce.com, let’s not turn back the clock.

Marc Benioff, it’s your job to fix this.

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19 Responses to Salesforce.com Launches Hype-as-a-Service, Erodes Trust

  1. Chuck Van Court September 11, 2009 at 9:01 pm #

    Hi Bob:

    Good job calling out Salesforce on their recent marketing hype. SalesForce has quality products and it is a shame that they felt compelled to put out such hooey.

    We have been calling out this kind of over-the-top marketing from our http://www.twitter.com/fuzedigital twitter account for a while now and it’s good to see that we are not the only ones that have a problem with it. One vendor even went so far as to proclaim that they were “the world’s most popular software” in a Google ad. What will people not say to generate hype and do consumers not hold them accountable for such clear indications of just how far they are willing to go to land a deal?

    It would be nice if vendors would ensure that their marketing aligns with fact, but I think that for some companies the pressures from investors may be just too great.

    We sure feel fortunate that Fuze is owned by employees and run by engineers. In the end, our integrity and a good night’s sleep is just too important to us.

  2. Scott Jorgensen September 12, 2009 at 12:19 am #

    The RightNow knowledge base was not designed strictly for a cloud computing architecture nor is it strictly multi-tenant. The RightNow knowledge base was originally written to run single tenant on-premise or hosted.

    Salesforce.com is saying that their knowledge base is the first to be strictly designed to run using multi-tenant cloud computing.

    I think we’re splitting hairs to get upset about this marketing spin.
    ______________________________________________________________

    A 3rd party survey of 6000 customers is the source for salesforce.com’s quote of: “28% increase in customer satisfaction, 25% increase in call deflection”
    _______________________________________________________________

    As for Plantronics: Rather than speculating about two vendors’ claims. Someone in the media should just ask Plantronics to comment for themselves on what their standard is.

  3. Chuck Van Court September 12, 2009 at 2:23 am #

    Scott:

    In 2002 Fuze was engineered from the ground up as a multi-tenant application with no session dependencies and the ability to scale by merely adding hardware. I think Parature was developed even earlier than that.

    I can already hear the debate about what was meant by “cloud computing.”

    The bottom line is that SF clearly was more focused on generating hype rather than making a accurate claim.

    If it looks like a duck.

  4. Ray Brown September 12, 2009 at 3:11 am #

    Hi Bob Well done for stating it as you see it, always refreshing, particularly as Salesforce.com is an advertiser on Customer Think. p.s. what does egregious mean ?

  5. Chamoen September 14, 2009 at 4:31 pm #

    Salesforce.com is a sales & marketing company – not a technology company. Go to a technical preview event (live or online) – and be prepared for sales engineers to be delivering the presentation and answering the Q&A (ie force.com).

    However, sf.com will continue to beat up so-called “engineering” companies. Companies like this Fuze are probably better products, but compare their website to salesforce.com…who would most customers buy?

    Perception > all. You can’t avoid the marketing game.

  6. Gerhard Gschwandnter September 14, 2009 at 5:43 pm #

    When you created a billion dollar business in ten years, you can claim that you can walk on water and get a dozen journalists to report: “Benioff walked on a cloud together with Moses holding up a stone tablet saying: ‘The End of Software’”

  7. Chuck Van Court September 15, 2009 at 9:43 am #

    Bob’s post is about crossing lines. Of course effective marketing is vital for any company, but transparency and honesty still counts. People are not stupid and perceptions are created beyond skin level.

    Salesforce is a great company with a super offering and effective marketing. They really have no reason to create this deceptive and bloated marketing copy.

    Keep it real.

    P.S. When your customers and staff can’t find answers, be sure to send them a glossy from the vendor providing the knowledge base. Note to self: keep folks in marketing out of product selection.

  8. David Vap, VP of Products, RightNow September 15, 2009 at 12:10 pm #

    RightNow’s patented, self-learning knowledge base was originally designed to run as a service. Some customers weren’t ready 10+ years ago to run software-as-a-service, so we allowed them to deploy their own on premise version. Today, we deliver cloud based solutions to all of our new customers, including a cloud offering that is fit for the most strict Department of Defense requirements.

    The Instranet offering, which is the basis for Salesforce’s knowledge base, comes from an on premise legacy. Check out the Gartner news analysis of the acquisition which states that 75% of the Instranet customers were on-premise at the time of the acquisition. This doesn’t sound like a ‘purpose built cloud KB to me.’

    Regarding the multi-tenancy argument, Wikipedia’s definition for multi-tenancy sums it up best, noting there isn’t a universally accepted definition of a multi-tenant architecture. RightNow is on a multi-tenant architecture, while it is different than Salesforce’s, it still doesn’t make them the first.

    This isn’t a matter of evolving software or architectural disputes, the bottom line is that Salesforce chose to blatantly misrepresent themselves to the market, their customers, and prospects.

  9. Bob Thompson September 15, 2009 at 5:52 pm #

    I have invited prominent analysts (including Forrester, Gartner and Yankee Group) to answer the question whether it’s true that Salesforce.com offers the “first ever multi-tenant knowledge base designed for cloud computing.”

    These are the people who study the technology, monitor industry trends and write all those reports comparing vendors on elaborate rating scales.

    Most (all?) have 10 or more years of experience and have watched, as I have, the ascension of on-demand computing to what we now called SaaS or cloud computing. Multi-tenancy is a core and commonplace capability that is well understood and widely available.

    So far, not one has backed up Salesforce.com’s claim.

    At best, some say it depends on how “cloud computing” is defined. Maybe Salesforce.com is using its own private definition? Sheesh.

    Folks, this is like Bill Clinton arguing he wasn’t lying about the Monica Lewinsky affair when he said “there’s nothing going on between us.” He later explained to the grand jury:

    “It depends on what the meaning of the word ‘is’ is. If the–if he–if ‘is’ means is and never has been, that is not–that is one thing. If it means there is none, that was a completely true statement….Now, if someone had asked me on that day, are you having any kind of sexual relations with Ms. Lewinsky, that is, asked me a question in the present tense, I would have said no. And it would have been completely true.”

    Is it any wonder that we don’t trust politicians? And marketers aren’t far behind.

    I’m hoping that an analyst will have the guts to actually post something on this blog, instead of staying on the sidelines and saying nothing.

  10. Duke Chung September 16, 2009 at 3:44 pm #

    We started Parature about 8 years ago with a vision to provide a great on-demand customer service and solution for businesses. Our initial knowledgebase technology was built from the ground up on a multi-tenant platform in 2002 and we have since developed a fully-integrated suite of modules designed and delivered on the same multi-tenant technology.

    Multi-tenancy is a good strategy for a vendor to easily deploy and manage multiple customers on a single farm in a more cost-effective way; while this is a good differentiator, let’s not forget about the real value of what a great SaaS customer service and support product can do for your business. A good, feature rich knowledgebase, when fully integrated with an online support solution can ultimately help companies amplify that positive end-user customer service experience. From a support center perspective, the deflection of these repetitive answers is where the real cost savings are, not the multi-tenancy attributes.

    A good knowledgebase product takes years to build and tune, and there are several vendors who bring a decade of SaaS experience into doing this right for companies.

    Duke
    Parature
    Co-founder/CEO

  11. Bob Warfield September 16, 2009 at 8:58 pm #

    During our recent Social CRM webinar with Geoffrey Moore, one of the overriding themes was that in a Social world, honesty, authenticity, and transparency matter.

    Maybe the shock value of hype is finally being dented a bit by the frictionless web.

    I hope so!

    Cheers,

    BW

  12. David Vap September 18, 2009 at 10:55 am #

    I like what BW has to say; the frictionless web as a driver for honesty, authenticity, and transparency.

    I vote that we start tweeting and monitoring software marketing indiscretions under the #HAAS hash tag.

    #HAAS is Hype-As-A-Service

    This would be of benefit to customers, prospects, entrepreneurs, and for corporate ethics more broadly.

    I’ll start.

    David Vap
    VP Products
    RightNow Technologies

  13. Bob Thompson September 28, 2009 at 2:14 pm #

    Scott, thanks for making this excellent suggestion.

    The Salesforce.com statement reads:

    “8,000 companies have already standardized on the Service Cloud including Extra Space Storage, NJ TRANSIT and Plantronics.”

    Now perhaps Salesforce.com has its own unique definition of what “standardized” means. But I think most would think this meant that these companies have already committed to use Salesforce.com as their only cloud-based (SaaS) customer service solution.

    I attempted to reach Extra Space Storage and NJ Transit. Neither replied to my emails seeking confirmation that Salesforce.com is their “standard” customer service solution. If they do, I’ll be happy to post the results here.

    Based on all the media coverage of Extra Space Storage, where the CIO has spoken publicly about their relationship with Salesforce.com, it seems clear that ESS has made a big commitment. If NJ Transit has done so, there’s no evidence of that I can find on the public web site.

    But Plantronics is another story. I did manage to speak with a Plantronics spokesman Dan Race and asked him to clarify the company’s position regarding using RightNow and Salesforce.com. He refused to say that they had standardized on Salesforce.com. Rather, Mr. Race said, “We are using both vendors for different aspects of our customer service operation.”

    The RightNow knowledge base is deployed here, and has 1,210 items available. This doesn’t sound like “standardized” on Salesforce.com to me.

    And if it’s not true for Plantronics, how many of the other 8,000 are merely using Salesforce.com as one of their customer service solutions, not as the standard?

  14. Jim Berkowitz September 28, 2009 at 3:01 pm #

    I’m sorry but I believe that much of what passes as “marketing communications” IS hype.

    Picking on salesforce.com seems logical because they are the company that everyone is chasing… but really, are there ANY CRM solution providers out there that can not be accused of over hyping something?

    If every marketing statement by every CRM solution provider had to be verified as 100% truthful versus incorporating some hype… what would really be accomplished?

    A better, more practical approach is always BUYER BEWARE.

    I believe that when businesses are making software (cloud service) investment decisions that they should fully understand what is most critical/important to them and then do the due diligence needed to determine that what is needed or wanted is “truly” there/available.

  15. Mark Parker September 29, 2009 at 3:03 am #

    Well said Jim…

    It’s easy to say buyer beware…but remember the old saying ‘no one ever got fired buying IBM’…

    Sometimes in the enterprise it’s too hard to be responsive to your internal needs.

    I think this is why we see these crazy announcements from CRM vendors about company X has standardised on our solution and will have a gazillion users on it…When in reality certain outposts will go their own way because Solution A doesn’t fit their needs.

    Why can’t CRM vendors be honest and say ‘Hey, this division of Company A uses our product and friggin’ love it because the 100 users on it are all on the same page. I know it’s not the whole enterprise but we do a great job with this division’

    Mark Parker
    Smart Selling
    http://www.smartselling.com

  16. Bob Thompson October 7, 2009 at 4:06 pm #

    Denis Pombriant, analyst for Beagle Research, apparently agrees with Salesforce.com that you don’t have a real cloud computing solution if you also provide other options.

    As long as a customer has the option of multi-tenancy then I think it’s not possible to call a solution SaaS or Cloud Computing. In an optional setting like that the vendor still has to manage and maintain multiple versions of the application and with that comes all of the overhead and complexity of conventional computing.

    I respect Denis a great deal (he’s on our Editorial Board) but I’m perplexed by this position. So if a vendor is not SaaS-only, then it’s not SaaS at all? Microsoft for one will be surprised to find out that it’s not a SaaS vendor after all, even though it offers a multi-tenant CRM solution. Too bad customers can choose to install the same code, or mix and match on-premise and SaaS model.

    Well, this appears to be the same logic that Salesforce.com uses to immediately declare itself the leader in new application areas (e.g. customer service) that have had SaaS solutions for many years. “Cloud computing” and “SaaS” mean “how we do things at Salesforce.com,” not what the market or customers think.

    So listen up, vendors. To be the undisputed leader is actually quite simple. Just define the market segment you want to lead in a way that only you offer a solution that is deployed in exactly the way you deploy it. Now every company can be a leader in markets of one.

  17. Bob Thompson October 8, 2009 at 4:50 pm #

    Denis Pombriant replied to my comment on his blog here:
    http://denispombriant.wordpress.com/2009/10/08/correcting-the-record/

    I’m replying here because his blog is not open for comments, unless you have a WordPress account (I don’t).

    First, I’d like to say I appreciate Denis taking time to share his point of view. A friendly debate, even disagreement, is good for the industry and makes us all smarter.

    However, the central issue seems to be how “cloud computing” is defined. I have consulted numerous resources and interviewed analysts, and agree with Denis that these days cloud computing has three different major components:

    • Software-as-a-Service: multi-tenant applications, for sales, customer service, marketing etc.
    • Infrastructure-as-a-Service: sometimes called utility computing, meaning renting raw computing power or storage (e.g. Amazon.com)
    • Platform-as-a-Service: an environment to build and deploy custom apps (e.g. Salesforce.com Force.com)

    Wikipedia does a good job defining cloud computing here:
    http://en.wikipedia.org/wiki/Cloud_computing

    Denis makes the following point:

    Also Bob, the prevailing wisdom about cloud computing is that it’s more than SaaS and it includes Platform as a Service as well as Infrastructure as a Service. Reasonable people will differ but it’s hard to see how you can promote SaaS to cloud computing if you’re missing the other pieces.

    So far as I know, Salesforce.com does not offer IaaS, so by this argument Salesforce.com is not a cloud computing vendor either. I’m not sure about this but does any vendor play in all three segments?

    My view is that cloud computing in common usage means providing at least one of the three (SaaS, IaaS or PaaS). Much like CRM means selling solutions for marketing, sales or customer service, but there are plenty of specialized CRM vendors that don’t do all three.

    The only way I can interpret Salesforce.com’s logic in declaring itself “first” or “only” is by defining cloud computing as only the way they have implemented cloud computing. Providing other options means you’re not a cloud-computing vendor? Sorry, that’s self-serving and misleading, in my opinion.

  18. Bob Thompson October 13, 2009 at 2:07 pm #

    Gerhard Gschwandtner, founder/CEO of SellingPower, recently posted this exposÉ on Marc Benioff.

    In Tough Times, Salesforce.com Should Get Back to Basics

    Gerhard recounts some of this personal experiences with Benioff, which reveal much about Salesforce.com’s Chief Hype Officer.

    No doubt, Benioff has created a big organization, but he has yet to develop the fine art of class. He is a far cry from computer industry giants like Thomas Watson Jr. of IBM, who once said, “Really big people are, above everything else, courteous, considerate, and generous, not just to some people in some circumstances, but to everyone all the time.”

    Some of Salesforce.com’s recent moves, and the racketing up of hype well past the norm even for the software industry, strikes me as acts of desperation to find new growth as the SFA market has matured.

  19. Robbert Bouman November 11, 2009 at 12:01 am #

    Hi Bob,

    Couldn’t agree more. But there is another point that amazes me even more. We, ‘the audience’ keep seeing their high power marketing messages on their technology innovations.

    I admire Salesforce as a company and I am impressed by its financial achievements.

    On the other hand I see tons op blogs, papers and tweets of experts stating technology is only one element of the road to CRM success. I am a believer that both process and behavior are at least as much important as technology to fulfill your customer related objectives.

    The Salesforce markting crew seem to operate on other beliefs, though. They seem to keep getting away with making huge marketing waves on the superb technological aspects of their (basic?) features.

    What is it that keeps the journalists repeating those low value messages?

    Robbert Bouman

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