On Demand! We want it here, we want it now. Hell, we want it yesterday. Considering the instantaneous nature of the Information Age, these requests are reasonable to make of any technical solutions provider. This is especially true, if not exclusively so, of an on-demand software company whose function is to host software systems and deliver them online. When these high performance services are availed to us, we experience the 21st Century connectivity – but if they can’t deliver as promised, they might as well not have offered.
The story is that Salesforce.com, a leading provider of on-demand software, lost a major customer to Oracle Systems. These rumors sent Salesforce.com’s stock (NYSE: CRM) tumbling down from $42.99 in late January. The company had been performing wonderfully; their stock price tripled in the course of the past year, but perhaps investors are reacting to rumors with a “where there’s smoke, there’s fire” mindset. There is reason for concern
Salesforce.com has been troubled in recent months by technical problems, namely crashing servers. These crashes, in turn, cripple the service they provide customers. An inadvertent outage might be an inconvenience, but repeated crashes generate outright hostility. Their company blog, Salesforcewatch.com, admirably fields these fiascos in comment thread format.
Unfortunately, some of Salesforce.com’s recent problems are just plain unacceptable. You cannot separate the human element from any technological business. Service representatives at Salesforce.com, like anywhere else, must perform as well as their product and are, I’m sure, well up to the task – provided their product is working.
What can a phone jockey at Salesforce.com do to help an irate salesman who cannot access his files? Suggest some yoga? Totally faultless in this affair, the customer service rep is better equipped for lost passwords or other menial mysteries. When the integrity of a company’s infrastructure hiccups and interferes with the customer’s business (forget featured conveniences – salespeople keep everything but their children’s names on file), it doesn’t matter who picks up on other end – the damage is already done and it’s time for vitriol. The assumed redundancy of the provider has failed. The offered technologies are no longer magic.
Chris Nicodemo, IT Director at ICMediaDirect.com, let me have it straight from the hip, “IT wins the battles, but we’re only as good as the technology we provide. First, our systems are redundant and we back that up with attentive personal service. Quality personal support helps retain the customer base.”
Here’s hoping that Salesforce.com’s customers are patient through this rough patch– because their chosen business to be a good one.
They are not without their high profile defenders, says Prudential Equity Group analyst Brent Thill: “We think the potential customer loss issue is overblown” and adds that their biggest customer accounts for only 2% of their revenue target for 2006. (Tip: don’t try telling your boss that his or her reactions to lost clients are “overblown”.)
On-demand software can and should be a terrific and profitable business. It would be best for a company in this business to work its kinks out now because mobile Internet connection will soon play a huge role in the business world, particularly in sales. Sales teams in insurance, pharmaceuticals, financials, building supplies – they will all need even more performance from their software providers. And just like today, they will still hate the paperwork and minutiae. Whoever best simplifies the sales process wins.
The on-demand software provider shoulders the burden of its customer’s database and keeps it easily accessible. General benefits include:
Saving company costs on hardware installation and maintenance.
Offering user ID/password for clients
Billing issued on pay-as-you-go basis
Handling update installs and patches
This is an example of 21st Century functionality at its best. On-demand customers need only a good Internet connection to benefit. IT anxiety and systems implementation can be outsourced, thus leaving a company more able to focus on core business. Solutions will vary, to be sure, but a software provider’s service must be fully reliable – no exceptions. Hopefully Salesforce.com learns from this bump in the road.
Salesforce.com’s own corporate blog, “CRMCoach”, refers to online software being the new “gold rush.” Perhaps. But, historically speaking, gold has often been the prime motivation behind careless actions. I quote the Coach: “We’ve gone from a web where everyone expected everything for free to one where we make software freely or very reasonably available and sell services.”
If you’re charging people money while building expectations, you had better provide results. If not, customers will walk, if they haven’t already.
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