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Yammer, Salesforce, and other Emerging Trends – “Technology Enabled Services – The Business Productivity Opportunity”

January 8, 2011

TechCrunch Purveyor of Silcon Vally slink has a great video piece up on why CRM startups are experiencing success and extreme growth. While being cautious about taking introspect from a VC is always a bit on the optimist wagon there are some great insights.

Technology Enabled Services – The Business Productivity Opportunity

  • Salesforce just hired a gaming VP for there product development organization (think about the implications of using a Sales / Organization automation tool with a point ranking for contributers)
  • The success oppertunits take longer for the SaaS B2B offering
  • IT is over a trillion dollars a year
  • Incumbent CRM vendors (on premise install base) are expanding there  customer base by purchasing other on premise customers (Oracle, SAP, Microsoft etc.)
  • SaaS vendors are  focused on selling to new markets, and are global (Small medium enterprise)
  • Sales & Marketing
    • Selling more pricey solutions remotely (with less sales involvement)
    • Business Freemium model allow customers to test products, and create an up selling experience for an existing happy customer (note that this not a new customer as with an on premise sell)
    • For margins to be reasonable the conversion rates in 10-15%  are needed,
    • Finally some Freemium models are using viral marketing (you send it etc), each use generates a possible new customer
  • Yammer vs. Salesforce
    • Yammer – Originally directed to a consumer market now with over 80% of fortune five’s
    • Jive –  Professional Salesforce, more B2B
    • Chatter – Most likely will grow organically through the Salesforce customer base
  • SalesForce – Service Cloud, CRM, Chatter are the 3 strongest platform strengths
  • Cloud Security & Privacy – Challanges exist but they will not last
  • Consolidation Trends- Large Incumbent ventures, Sucessful M&A and consolidation of market

All this leads to some really interesting questions.

  • When the incumbents challenge the SaaS products how will they differentiate there product offerings? vs. just making there products offered on a subscription?
  • How long does it take mature and adopt a enterprise SaaS offering, SalesForce seems to have take 5-7 years. (How long did it take Sieble?)
  • When offering a Freemium offering what is the right position to take for a traditional vendor ?

 

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