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Salesforce.com’s 2011 Dreamforce conference is under way. If you’re in sales and you use the company’s application, here’s how to gain the most value from your time at the conference. 

Today, For background, we need to note that Salesforce.com is not as focused on the sales force as it once was years ago, now concentrating more on application development, collaboration, mobility, database and cloud computing advancements to address the needs of IT who is readily engaging into this method of software usage. All of these are useful underlying capabilities that a sales force might use, but they are not aligned with the critical sales activities and processes. If you use Salesforce.com for sales force automation (SFA) in managing accounts, contacts and opportunities, we advise you to link it to a larger management and operational process that we call sales performance management and now are doing some new research. Our ongoing research into this topic shows that sales organizations require a portfolio of applications to support this process, but that two-thirds of organizations are not satisfied that SFA is meeting their needs. 

Salesforce.com does have a framework for sales called the Sales Cloud that addresses sales representatives’ basic needs in managing accounts and contacts, entering opportunities and quotes, working through approvals and workflow along with analytics. The company will be introducing some new capabilities, including basic sales forecasting, but that will not match the current class of sales forecasting available from its partners such as Cloud9 that I just assessed. Salesforce does deliver auxiliary collaboration with Chatter, email and calendaring and the ability to augment its contacts in an account with its purchase of Jigsaw. It has been steadily advancing its capabilities for mobile technologies including smartphones and tablets. It also recently released its Account Viewer, an iPad app that lets managers and account sales teams access account and related information as part of a review or visit. 

It’s a good thing Salesforce isn’t standing still, because Oracle and SAP are entering this market with cloud and mobile-based SFA offerings. My analyses of Oracle and SAP found they have covered the basics of SFA and provide more functionality for sales managers and management, which should provide new competition for Salesforce.com. Microsoft is rapidly becoming competitive with its new offerings and move into cloud computing. 

Dreamforce has grown so big that picking out what matters for sales professionals is not easy. There is much focus on cloud computing, collaboration, mobility, analytics and social media at the conference, and these are important topics that we have outlined as the business technology innovations of the decade. The secret behind Salesforce.com’s strategy is its enterprise software in the cloud, and the diatribes on technology-related advancements in cloud computing will be overwhelming.  

Still you need to determine what applications fit best for your sales organization. At Dreamforce you will find a number of sessions that are valuable for sales operations and management staffs. I am looking forward to “LinkedIn for Salesforce: Close Deals Faster with Insights for Your Pipeline” and “Mobile Crash-Course for Busy Sales Executives.” “iPad Revolution: How Going Mobile Will Transform and Boost Sales Efficiency” will get you thinking about the use of mobile technology for your sales organization. I also suggest “Social Selling: Rising Above the Noise to Drive Sales Performance” and “The Future of Comp (Hint: It is not Excel).” If you are trying to see whether Salesforce will go beyond the basic projections of opportunity records and align to the forecasting process, stop into “Forecasting Best Practices and a Sneak Peak at the NEW Forecasting Application.” I would also not miss “Sales Cloud Roadmap: A Sneak Peak into the Future” to see if Salesforce will advance further into sales performance management, and “Roadmap Sneak Peak: The Future of Analytics in Salesforce” to see what the company plans to do about sales analytics, which our benchmark research shows needs serious improvement from the wide use of spreadsheets and generic reporting and dashboards.  

At the Dreamforce expo you can find a wide range of dedicated sales applications, some of which are more likely than others to be worth your time, but the show floor will be chaotic and there is no “sales cloud” area on the show floor. The quick guide below starts with sales-related vendors who have the smallest booths, and works up to those with higher sponsorship levels and investments. 

At the Bronze level, see what Merced Systems is offering in Sales Performance Management 4.0, which I recently assessed. Stop by Qvidian, which has been advancing the art of sales playbooks and proposals in applications, as I just assessed; it could be one of the gems of the show for sales. If you are trying to improve the science of territory and quota optimization, stop by TerrAlign to see how the largest and most complex sales forces optimize their sales organizations. Zyme, which my colleague Robert Kugel recently assessed, helps you gain control of your channel through data integrity. If you care about pricing and profitability, see Vendavo and Zilliant, both of which have been helping B2B organizations for years. 

At the Silver level, ChannelInsight provides applications to help manage channels sales, a critical area of focus for many who depend on distribution and reseller channels. Also Varicent, from our analysis is one of the fastest-growing providers of sales performance management specializing in sales compensation and incentives, along with quotas and territories and sales analytics. 

At the Gold level, Callidus Software is a long-time provider of applications for sales management and operations, and was rated a Hot Vendor in our Value Index for Sales Performance Management. It has been integrating talent management into its sales portfolio through acquisitions that started with that of ForceLogix in 2010. If you care about configuration, pricing and quoting in your sales organization to maximize margins and pricing more immediately, stop by Camelon Software. Cloud9 has just expanded to provide intelligent sales forecasting to complement its pipeline management, as I just assessed. Xactly is showing its rapidly growing suite of sales performance management; we rated the company a Hot Vendor, and it provides a range of applications for the sales organization. My latest analysis of Xactly shows significant growth of capabilities in its 7.1 release. 

At the Titanium level, if you are looking to arm your inside sales and accounts teams with maturing leads that might be ripe enough to sell to, you will find Marketo has expanded its footprint to provide a sales application called Marketo Sales Insight that is worth checking out. 

There will be a lot to cover for sales professionals. I will be busy assessing the latest from Salesforce.com and dozens of its partners as part of my preparation for the 2011 Value Index for Sales Performance Management. Our 2010 version indicated that Salesforce still has a way to go to reach Hot Vendor status. We are also busy with our latest benchmark research in sales to determine your priorities for more efficient sales processes from management to operations to sales teams, all aimed at gaining the best possible outcomes.  

Dreamforce should be a good event for those in sales teams. Make sure to network with your peers in the sessions, as the rest of the event will be chaotic, with attendance well beyond even Salesforce.com’s expectations. I too will be looking to see how I can get the best return on my Salesforce.com investment that we use for SFA, and whether our firm should continue using it. If you are in sales and want to track me down and catch up, find me on Twitter at @marksmithvr, and we can talk about providing you with ways to get inexpensive access to our research and consultations.  

Regards, 

Mark Smith – CEO & Chief Research Officer

In a very quiet and very subtle move, Callidus Software  (NASDAQ: CALD) has offered to purchase the assets of ForceLogix for about $3.75 million. This sales applications software company provides sales coaching software to help sales managers realize the full value of their sales representatives. In 2010, Callidus Software entered into an OEM agreement to embed ForceLogix within a new offering called Sales Coaching; it clearly concluded that the opportunity to expose the application to further opportunities in its customer base was too important for ForceLogix to be allowed  to continue to operate independently, and so it used some of its stated cash position of almost $11 million at end of September. This step into a pre-sales and sales management application is a key move toward expanding its sales performance management position. I would guess that Callidus sees some significant revenue growth in 2011 and beyond for its purchase.

The ForceLogix application is one that I have been tracking for many years. It has come a long way; its latest 5.5 release includes a series of great advancements. The core application is known to be quite robust in providing a series of performance and process metrics about a sales rep as well as guidance on places to improve. The advancements that came out in August with the new version include support for sales manager coaching, performance improvement plans and reviews and coaching suggestions. In addition, the application includes an offline version with synchronization to enable coaching and reviews even when not connected to the Internet. Critical advancements in workflow, notifications and tracking make the core application more robust, and its utility is improved with new management views for assessing actuals, competencies and trending. These advancements support what our sales benchmark research found improve efficiency of sales processes is a top benefit of sales performance management that every organization should be investing into and Callidus is one of the key suppliers of it.

It’s important to note as well that ForceLogix had stepped up its development efforts along with focused sales efforts. In fact, its list of customers has grown to include Corning, Lenovo, Motorola and others. Foreshadowing this move, ForceLogix had already been expanding its integration with Callidus with single sign-on and use of underlying information and metrics. Now with Callidus buying the assets, will it offer jobs to all of the employees and keep the same level of investment and growth? Time will tell.

On the Callidus side this is a positive growth opportunity, and one that comes as the company has been reducing its operating footprint and costs. Despite this shrinkage, Callidus is closing new customers both at home and across the globe (which is a growing percentage of its business); among those added are AAA of Michigan, ESPN, Health Net and others. Callidus has been working its way through a very difficult transition from a license-and-maintenance model for its offerings to a recurring software-as-a-service rental approach that now represents 72 percent of its total revenue in its third quarter results. This conversion is no easy task and as it finds further growth in the market will provide an interesting case study of business management and an operating model transformation.

Focusing on profitability and margins is good financial management, especially for a public company, but it alone is not enough if the company isn’t able to market itself effectively against peer competitors – in this case, competitors like Merced Systems and Varicent, which have been increasing their marketing and sales efforts, and Xactly, which appears to have flattened its spend in this area. Most interesting was the pullback of Callidus’s efforts with salesforce.com; at the latter’s 2009 Dreamforce conference it showed the new set of products in which it had invested significantly and which I analyzed.  Since then Dreamforce 2010 has come and gone and Callidus did not even exhibit at the event. Although in my opinion salesforce has not invested significant effort recently in advancements for sales forces (See: “Can Your Sales Force Trust Salesforce.com?“), there remains activity in that area, and all of Callidus’s direct sales compensation competitors were present and this year’s show and actively in dialogue with prospects and Xactly appears to have the front seat as salesforce uses its products and has many partnering activities in motion.

Competitively, Callidus, like others, will face the reentry of Oracle into this space with its Fusion CRM for Sales which I have recently assessed (See: “Sneak Preview and Analysis: Oracle Fusion Applications for CRM and Sales Organizations“), and major releases from Varicent (See: “Sales Compensation Easier To Manage with Varicent 7“) and Merced (which already has a Coaching Plus application that it highlighted at its recent conference. This will make it even more important for Callidus to effectively market its advancements and value if it is to compete in this highly competitive environment. It has appeared in 2010 that it has removed itself from most common marketing activities to slash its operating expenses. For Callidus the question is whether SAP will come back and embrace Callidus as a partner or as an acquisition or will IBM decide to expand its existing sales analytics solution.

Callidus has also found some other critical application expansion opportunities. It recently highlighted an onboarding application that has had yielded growth in the insurance industry – it helps streamline agents’ ability to operate across carriers quickly, in some cases in only 30 minutes compared to the week or more required in a manual process. This application is yet another example of the potential of sales performance management.

I believe that in acquiring the assets of ForceLogix Callidus Software has a great opportunity for growth, but it will have to beef up and improve its marketing efforts to ensure it can compete for consideration in this area. It has a solid foundation as we have assessed its company and products in our Value Index. Clearly the newly augmented application will offer an opportunity to sell back to its customers, but Callidus must reach for the larger opportunity of organizations starting with sales coaching and then progressing to improvement in sales compensation and other sales performance management applications that it has and should expand, build and partner more for in the future.  

Regards,

Mark Smith – CEO & EVP Research

Mark Smith – Twitter

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