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Salesforce.com made a surprising announcement of its agreement to acquire Rypple, a software company that defines its product as a social goals application. I call this a surprise because although Salesforce has been extending its reach beyond sales and customer service to IT in providing a platform, tools and a database for building applications and storing data in the cloud, until now it has not entered directly into other lines of business. After its annual Dreamforce conference last summer, I analyzed the company’s strategy and products. Now I want to consider what this acquisition means for Salesforce and the human capital management market.

Rypple provides a new type of application that operates within the confines of cloud computing that enables managers and team members to collaborate in accomplishing specific objectives in an interactive manner. Perhaps Rypple’s largest challenge has been waiting for potential customers to catch up to this innovation and be willing to try a new approach to coaching team members. Unlike traditional HR and talent management applications, Rypple addresses goals and objectives, coaching and feedback, and performance reviews in a social environment.

I decided to check out the application for myself and ensure my analysis is as accurate as possible, which I think its uniqueness makes necessary to understand what Salesforce.com has acquired. Rypple focuses on three key activities: coaching toward defined objectives, recognition of work accomplished and feedback on the performance of the individual who has done it. The application runs in the cloud, which no doubt pleases Salesforce. It took me just minutes to set up in its cloud computing environment with the application and engage members of my team with it, even accessing it with its native application on the Apple iPhone. Rypple provides a comfortable user experience and intuitive methods for people to work toward common goals and socialize the focus.

Rypple has been active in getting testimonials from its customers, which include Facebook, Spotify, Rackspace, Kobo, Jive Software and other newer companies mostly in the Internet technology sector. Rypple had a simple pricing plan that offers some basics for free and charges $5 to $9 per month for more functionality for goals and reviews, coaching and feedback along with enterprise-level integration and support. Rypple also provides integration with Google, iPhone, Jive and Pivotal Tracker, which demonstrates its ease of access from other environments.

Now the question is what Salesforce.com plans to do with Rypple. It will create a new business unit and rename the produce Successforce and is likely to integrate this with Chatter as part of an effort to make that an enterprise backbone for social collaboration. This layering of applications complements Salesforce’s strategy for Chatter as it has done with its Service Cloud. In the short term I doubt that Salesforce will jump into the larger market for talent management and try to sell Rypple to human resources departments; this requires focused investments into this line of business, which it has not been doing as much as it has with IT. So the impact of the acquisition on the human capital management software market is  not clear. Salesforce  will also need to address the future of its partnership with Jobscience which applies aspects of CRM to administer and support HR and human capital management and has been providing them some significant proof points of its efforts.

Salesforce’s customers in sales and customer service should be eager to examine this application as should those looking to build upon its use of Force.com in the enterprise. Rypple also could help Salesforce gain an edge on Oracle’s Fusion for HCM that I assessed and its recently announced Oracle Social Network that lacks the vision and demonstration as this announcement. This move puts Salesforce.com more in line with the direction of what Saba and SuccessFactors (which is being acquired by SAP) are doing to advance social collaboration into human capital management. At the moment it is not clear if Salesforce will continue to support the existing stand-alone offering and pricing of Rypple, let alone the free version, so users should be cautious until the deal is final and Salesforce communicates the new direction. In any case this is an interesting move as Salesforce continues to surprise the market with its progressive applications of social collaboration for enterprise lines of business.

Regards,

Mark Smith – CEO & Chief Research Officer

 

At the Dreamforce conference, Salesforce.com (NYSE:CRM) CEO Marc Benioff unveiled the latest evolution of the company’s strategy and supporting technology for cloud computing and mobile technologies. Its aim is to enable businesses to engage with customers and prospects via social media channels – what Salesforce calls the “social enterprise” – and empower employee and customer social networks to operate individually and together. Note I did not mention CRM, which doesn’t have a role in this platform for basic interactions with prospects and customers and is accompanied by a large ecosystem of partners that provide dedicated marketing and contact center applications. As summarized in its announcement, Salesforce’s strategy is clearly different from that of others in the applications market, including Oracle and SAP, which have products for the cloud computing environment and have made strides into integrating collaboration and social media capabilities into their applications.

Salesforce.com’s social enterprise is a big step forward from the strategy it talked about at last year’s Dreamforce, and is now focused helping companies build social profiles of employees and customers that can managed and augmented with information about the individuals from other social networks. The company’s partners are also working on such capabilities. For example, software from Reachable can present the relationships among individuals in a social graph. This week Roambi introduced analytic and mobile integration with Salesforce Chatter, which is another advance in what my colleague David Menninger calls the consumerization of collaborative BI.

Salesforce says significant technological improvements in the coming Winter 2012 release and later will make Chatter a true social business tool with many methods to chat, share, approve and otherwise enable the collaborative process. Another addition slated for Chatter is the ability to include presence information in the chat the way most instant messaging networks do today in a feature the company calls Chatter Now. Users will be able to embed and share video, graphics and other kinds of files. Users who have too much traffic in their feeds will be able to filter content based on keywords. Chatter Approvals will be able to handle prompted interactions. With Chatter Customer Groups users will be able to invite and interact with customers or external people in private discussion groups. Those looking to build custom enhancements to the software can employ the Chatter API using REST and streaming that can be embedded with Chatter to interact with applications. Last year iWay Software demonstrated third-party integration to take any systems event and publish it into a Chatter feed.

Surprisingly, iWay, which is an Information Builders company, was not at Dreamforce this year, but it has paved the way for enterprise notifications in Salesforce’s social enterprise efforts. Salesforce also is targeting organizations using Microsoft SharePoint; they will be able to use Chatter instead of Microsoft’s messenger technology. Salesforce with Chatter Connect will be able to integrate its feeds with other environments to make a more seamless social and collaborative environment.

The expanded capabilities for Chatter, and Salesforce’s enhanced profiles of customers and prospects, will be integrated with the Service Cloud in an application called Chatter Service to help improve  customer interactions for contact centers. Chatter Service will also be able to integrate into Facebook. This could create a new class of customer self-service for organizations that want to move their initial interactions into social media, and move questions and comments into more formalized customer service channels for resolution. To address the full needs of a contact center though beyond social media will create other applications for which Salesforce has plenty of partners exhibiting including Contactual, inContact, Interactive Intelligence, Five9 and LiveOps. Salesforce showed how it can add value to the Sales Cloud with its advances in Chatter, but we do not expect to see a more integrated set of methods till 2012. Until then you can use Chatter by itself to interact with your sales team and the new versions will now be a good reason to evaluate them for what they call social sales. If you are looking to address the broader set of sales activities and processes beyond SFA, Salesforce has plenty of partners that should be considered if you care about efficiency and achieving sales quotas and targets.

Salesforce.com’s social enterprise direction will require simpler access to applications from smartphones and tablets. The company has created an engine to transform its applications to operate in an HTML5 environment so they can be utilized on smartphones and tablets from Apple, Android devices, RIM hardware and Microsoft’s, too. Salesforce calls this its Touch approach and will release it sometime in the future. You can sign up to be notified when that happens at www.touch.salesforce.com. This will be a significant new option for anyone operating in the Salesforce.com environment.

One of the key pushes by Salesforce is database.com, which is designed to securely store organizations’ data in the cloud; it can be used by applications running on the company’s force.com platform for cloud apps as well as new social enterprise offerings that will come out in 2012. Our upcoming research in business data in the cloud will unveil more challenges and opportunity for improvement to support technology like database.com. This offering makes it easy to provision a database and get started. Its pricing and capabilities suggest that database.com is a transactional centralized data service. It’s not clear whether it will be useful for business analytics, which our research finds to be a major need in organizations today. Business analytics has not been one of Salesforce strengths which its customers can attest which is why the portfolio of partners providing these capabilities is quite significant. Many of them also depend on their own database technology for analytics that operates in the cloud. If database.com is not able to support the analytics needs within the database its potential and impact to its customers could be hindered.

The challenge with database.com is that if you are trying to do automated data integration efficiently, including migration, synchronization or replication across clouds of data under applications or to the enterprise, you will need a separate product, and while Salesforce has many partners, none are part of the announcement or listed on the database.com website. As David Menninger has pointed out, integrating information from diverse clouds of applications requires work. Our newly completed research in Business Data in the Cloud will enumerate those challenges. If you are looking for help in dealing with integration in cloud and enterprise, consider Dell Boomi, Informatica, Pervasive and SnapLogic, with its dedicated data integration technologies.

Salesforce.com makes the social enterprise interesting, and it is taking the lead in advancing these kinds of interactions, especially with business-to-consumer companies, which need the most help in dealing with social media.  Its ecosystem of partners and the ability to integrate with consumer social media give Salesforce an early advantage in the market. If you are looking for new core applications in marketing, sales and customer service, you will need to invest in the partners to make this happen. As I wrote in my guides to Dreamforce for sales and marketing, it’s not easy to determine how to get the full value in your Salesforce.com investments, but it is worth the effort. If you are in sales or customer service departments or are trying to get a great mobile strategy, come and let us know as we can definitely help get what you need today. Organizations should take this social enterprise seriously, and especially those that see social media as essential to their future and Salesforce as well. You should realize that nothing comes for free and Salesforce has found another place for it to grow its business usage across an enterprise that can grow its subscription to its software substantially.

Regards,

Mark Smith – CEO & Chief Research Officer

Mark Smith – Twitter

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