Salesforce announces fourth quarter results

This past Wednesday, Salesforce.com’s announced that revenue for the quarter (that ended January 31, 2009) increased by 34% over the same period a year earlier. Even deferred revenue, which is a good barometer of new sales made by the company, was up by more than 26% quarter over quarter -- from $470 million in the previous quarter (ended Oct 31, 2008) to $594 million.

Obviously, the dramatically lower up-front costs of a Software-as-a-Service (SaaS) make that model very attractive to firms who are looking for ways to minimize large capital expenditures. And just as obviously, Salesforce.com CEO Marc Benioff will take every opportunity he can to remind listeners of this point....

"Salesforce.com is proud to be the first billion dollar cloud computing company," said Marc Benioff, chairman and CEO, Salesforce.com. "At a time when capital is precious, big-ticket software purchases just don't make sense."

Does this mean that your firm should pursue a SaaS strategy for your Customer Relationship Management system?
Not necessarily.

The fundamentals of your decision haven't changed. Sometimes, a SaaS solution makes perfect sense... especially if you have a highly mobile field salesforce. At the same time, however, making a switch to a SaaS model isn't the best option ... especially if your current CRM solution isn't hurting your business. And of course, it's absolutely critical to remember that the only way a CRM will help your business if it actually and really helps the salesperson on the street.

Nevertheless, I see this as relatively good news for the economy in general. Salesforce claims to have signed up 3,400 new clients in the quarter, bringing them to more than over 55,000 total clients and more than 1.5 billion subscribers. This tells me that firms are still willing to invest in improving their business. And that can only lead to good things, in the long run.

Salesforce.com, Inc.: CRM (NYSE)
Earnings announcement from Salesforce: Salesforce.com Announces Record Fiscal Fourth Quarter Results

Microsoft announces Windows 7 enhancements

Today, Microsoft published a partial list of the fixes and enhancements to Win7 that they are working on in response to user feedback. It's a nice list, and -- Project Managers take note -- it's an excellent policy to make this kind of information public. And based on the comments to the blogpost, I seem to find myself in the majority.

Microsoft still has not announced a date for the release candidate, but I suspect that it won't be long. Of course, the sooner they can get Vista off the stage the better. So I'm sure they're highly motivated to get Win7 out the door.

Read Microsoft's blog: Some Changes Since Beta for the RC

Salesforce data integration gets easier

One of the big challenges for Software-as-a-Service (SaaS) implementations is integration with operational systems. This can be especially difficult for organizations that rely on a high-volume of transactions from an existing client base to drive revenue. Since it is these types of organizations that can benefit the most from a solid CRM implementation, back-end integration becomes a critical success factor, and a key aspect of the system selection decision process.

Pervasive Software markets a product called Integration Manager that acts as a middleware tool to provide data integration between Salesforce.com and operational systems. A tool like this can provide two significant benefits.

First, it can significantly reduce the deployment time for a Salesforce.com implementation. Salesforce boasts of 3-week start-ups, but that is for a stand-alone system with no data and very little customization. It's hardly useful at all for a firm of any size or complexity. A substantive reduction in deployment time will dramatically improve the ROI of the system.

The second benefit comes in the form of improved quality. The biggest obstacle in data integration rears its head in the data transformation phase - the act of of manipulating the output of the systems of origin to conform to the destination system's requirements. A tool that is designed specifically for Salesforce can dramatically reduce the complexity of those transformations and improve the consistency of the resulting output. Both of these outcomes lead to higher quality data all the way around.

If your firm is considering a CRM initiative, please contact us. We can provide you with sound, objective advice in determining the best solution for your business.

Learn more about Pervasive Software
Salesforce.com, Inc.: CRM (NYSE)

Red Hat plans expansion of virtualization products

Red Hat recently announced the upcoming release of four new products designed to bolster its position in the server virtualization market. Their hope is that more corporate users will see open source solutions as being robust enough for mission critical systems.

The product line will be made up of: Red Hat Enterprise Linux featuring KVM, Red Hat Enterprise Virtualization Manager for Servers, Red Hat Enterprise Virtualization Manager for Desktops, and Red Hat Enterprise Virtualization Hypervisor. Red Hat also announced that they will base all their future virtualization offerings on the KVM platform and that they will provide migration tools for IT organizations currently using Linux 5 Xen. The Red Hat Enterprise Virtualization Manager for Desktops is to be based on Qumranet's SolidICE.

This means added competition for main stream virtualization vendors, and -- very likely -- downward price pressure being placed on those companies. Now that most organizations have gotten past their healthy skepticism of open source-based solutions, I believe that this product launch will create significant disruption in the virtualization marketplace. Firms like H-P will have to work even harder to justify premium pricing with reliability and ease-of-management data.

Read the article at InformationWeek: Red Hat Unveils Virtualization Portfolio
Red Hat, Inc: RHT (NYSE)
Microsoft Corp.: MSFT (NASDAQ)
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