Poised to dive into unfamiliar application deployment waters, Salesforce.com is recruiting some heavy hitters to help the hosted CRM vendor stay afloat.
San Francisco-based Salesforce.com is expected this week to unveil partnerships with Microsoft, BEA Systems, Sun Microsystems, and Borland Software Corp. designed to lay down the groundwork for enabling tighter integration with Salesforce.com's applications, a source familiar with the announcement said.
The development tools earmarked for construction will grant customers and software providers the ability to hook directly into Salesforce.com's online service and to connect more easily with other back-end applications.
The endeavor is slated to be called the Application Utility Framework, according to the source.
By opening its development environment to industry titans that can flex hardware, storage, networking, and integration muscle, Salesforce.com is seizing a major shift in the way enterprise software is provisioned, said Denis Pombriant, vice president and research director of CRM at Aberdeen Group Inc. in Boston.
"Software has gotten to be very complex and expensive. Evidence points to more of a utility model being the way of the future," Pombriant said. "We're going to see enormous growth in hosting, and (CRM) vendors that don't make investments in hosting will be laggard or out of business."
In a recent report, Pombriant estimated that companies hosting CRM services can undercut vendors delivering products via a licensing model by as much as 90 percent.
Aberdeen predicts that during the next year most CRM players will aggressively enter or redouble their efforts in the hosted realm.
Still, some analysts question the integration marriage Salesforce.com is trying to consummate.
"What's really interesting is, the role of storage and application integration is almost zero," said Erin Kinikin, senior analyst at Cambridge, Mass.-based Forrester Research Inc. She also questioned whether the highly visible partnerships will carry substance.
Kinikin said all CRM vendors are being forced to "play in the integration world" or risk losing business to enterprise-suite competitors such as Oracle, SAP, or NetLedger on the hosted side.
Salesforce.com's Web services APIs are too complicated for non-IT customers to disseminate, Kinikin noted.
"If Salesforce.com can deliver (application) integration (for) business users, they'd really have something," Kinikin added.
Also attempting to ford the muddy waters of integration, Siebel recently rolled out 50 integration applications for its vertical-oriented UAN (Universal Application Network).
Analysts believe that UAN 2.0 will be successful in countering the need to mix and match applications and to transform process information into business information.