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Salesforce is a global software-as-a-service (SaaS) company to be reckoned with. The swarming crowds at its Dreamforce event last week were estimated to exceed 90,000. The company is rapidly growing an ecosystem that includes Sales, Service and Marketing Clouds; Force.com for building applications; and Data.com for storing data in the cloud centrally for use across Salesforce products. It is also focusing on social computing, as I outlined at the beginning of the event. Hundreds of Salesforce partners complement and in some cases compete with the company with a large range of applications and tools available on the Salesforce AppExchange.

In the last couple of years Ventana Research has been closely examining support for data within and across cloud computing environments like Salesforce.com’s and dozens of others, and we have seen the need to provide an interchange with data in on-premises enterprise applications and systems. Unfortunately Salesforce, like other companies that deliver applications and platforms in the cloud, has failed to advance such interchanges. It is clear that managing data in the cloud, as our research has found, can have significant process benefits, such as improving data quality and reducing resources to establish and maintain the cloud effort.

I was looking to find more direction from Salesforce.com at Dreamforce, as were thousands of other organizations who are now connecting their applications and data together. I found few improvements outlined for Database.com in the Winter ’13 release, and found no real substance to support organizations’ broader data needs beyond just processing data within its own environment – but organizations cannot just put all of their data in this offering for their broader business and IT needs.

Organizations create and store larger volumes of data that needs to be utilized across business processes, within an enterprise or shared across cloud computing environments. Our research shows that a significant number of organizations (more than 40%) need or plan to add data integration for cloud computing and software as a service (SaaS). Such integration to support the needs of people and processes across applications requires many levels of plumbing. First, when organizations start using a new application that operates in the cloud, it must migrate data to the new application. Most organizations then require some level of replication and synchronization of data until their legacy application is no longer needed. Second, as new data is created within the cloud application, it inevitably must be replicated to other applications, perhaps on a daily or weekly batch basis, or maybe via real-time feed as transactions occur. This data might need to be piped to other cloud computing areas or on-premises applications and data environments, and that requires more than just some administrative tools within an application or database.

Distributed applications that create data must also have some level of consistency in their definition and use of customer, product and service information. In addition, our research has found concerns about areas such as data security, which was the top concern in 63 percent of organizations. Having dedicated software to help manage the data plumbing in the clouds and enterprise can provide better safety nets and auditing of data usage. As organizations continue to demand analytics across line-of-business areas, a third-party approach will best fit most organizations’ needs, as I point out in “Salesforce struggles to deliver on the dream of analytics.” This basically means that integrating data for analytics at any level of information management requires integration of data across the cloud.

Salesforce has not been progressive in helping organizations manage data effectively. It still uses methods such as exportation (56%) and custom coding through APIs (39%), which are part of the problem when it comes to providing consistency, quality, security and overall efficiency to adapt to enterprise needs. Our research finds organizations are rapidly adopting dedicated tools that do a better job.

Salesforce does have a portfolio of partners that help with application and data integration needs across a range of business processes, which is important; our recently released Ventana Research Data Integration Value Index included in our assessment the ability to support cloud computing environments. But other vendors do more to help business and IT with their data needs. Several such vendors deserve special mention.

Informatica provides an on-premises and on-demand environment for data integration and has continued to advance its cloud computing offering as a platform for supporting a range of applications and data needs. Informatica also this month announced a new software offering to help with data integrity by ensuring that consistent data is placed in the cloud computing environment. It leverages a master data management approach, which our research finds is growing rapidly, as 29 percent of organizations have initiated new projects and 26 percent have them in planning. The software also helps consolidate instances of Salesforce and provides the ability to augment existing data with offerings from Salesforce’s Data.com and other sources, such as IMS, Moody’s and Thomson Reuters.

As another example, SnapLogic provides a dedicated cloud computing environment for componentized integration of data across applications and systems. It has been able to provide a data integration environment that analysts find easy to use to dissect their data deluge and support management’s need for analytics, and that developers can use to tailor the flow of data to the range of business processes that customers and partners might need. SnapLogic’s dedicated focus on the cloud and its leverage of partners’ and customers’ work makes it a vendor to watch.

Information Builders provides direct connectivity to Salesforce and supports a range of real-time and batch-related tools for unifying the cloud and on-premise environments. Zyme Solutions offers tools to provide consistent data across channels and partners and supports associated business processes across accounting, order management, customer service and supply chain applications.

Many organizations are not able to just consolidate applications but instead have existing applications whose data must be integrated across a range of business processes. Kapow Software provides a method for capturing data in any browser-based environment. It can also help organizations make existing applications operate on other platforms, such as mobile technology, then enable the data from the screen to be integrated into the cloud or on-premises enterprise environment. This approach simplifies the integration of applications and processes through a self-service approach that helps leverage existing investments.

As your organization looks to integrate cloud computing environments like Salesforce with the enterprise, you will not find much help from Salesforce itself. Chances are you will need help from third-party providers to build an automated and sustainable approach. Automating data activities related to the cloud is a very important task to 38 percent of organizations and growing in importance rapidly.

The challenges your organization faces with data are getting larger, and the financial benefits of data in the cloud, such as reduced TCO and reduced implementation fees, are substantive. Too much time and too many resources are wasted in manual approaches where data is transitioned inconsistently and incorrectly. Automation helps organizations rationalize their overall information management efforts.

The largest barrier to efficient information management that we found in our research is data spread across to many applications and systems, according to 67 percent of organizations, followed by multiple versions of the truth (64%). If your organization lacks an information and data strategy for cloud computing across line-of-business areas where applications are being rented frequently, you’re at risk of wasting time and money and having incorrect or out-of-date data.

I hope that Salesforce will present a better blueprint for integration technologies in the future to guide customers toward the options it has and is available from its partners. The company inevitably will need to buy a company that provides this technology to meet the needs its customers have today and will continue to have in the future.

Regards,

Mark Smith

CEO & Chief Research Officer

We have just released our 2012 Value Index for Sales Performance Management (SPM), in which we evaluate the competency and maturity of vendors and products. Our firm has been researching this software category for many years, and our latest benchmark research in sales performance management found many areas for improvement among sales applications in a field where many sales organizations still use outdated or insufficient applications to manage revenue generation and customer relationships.

I am excited to bring this research to market again this year. No other research firm performs this level of analysis or follows it up on a regular basis. The Ventana Research methodology utilizes a request for proposal and assessment approach, and each value index takes six months to complete; unlike other analyst firms, we look at the product details that have the most importance in successful adoption and use. In the process we identify best and worst practices that further refine how we assess technology vendors in each category.

Our Value Index analysis for Sales Performance Management looks at the complete range of applications for sales organizations, including forecasting, coaching, compensation, incentives, quota and territory management and other key areas. This year it also examines the emerging needs for mobility, collaboration and analytics. We examine role-based requirements for a sales organization, from management, managers and operations to the account and sales representatives. We also look at the need for integration with other applications and processes. We individually assess and score the key product areas of usability, reliability, manageability, adaptability and capability, and also the customer assurance areas of validation and TCO/ROI.

A lot has changed among SPM suppliers since our last Value Index. For instance, Oracle has made multiple releases of Fusion CRM for Sales. Its applications are now rated Hot and rival those of salesforce.com; as well Oracle has many applications that salesforce lacks. For the first time we assessed SAP Sales OnDemand; its new focus and the updates to this cloud-based application have advanced it significantly. Xactly continues to release applications that are usable, manageable and adaptable to an organization’s sales processes. Microsoft has made significant strides with its applications, which now can be accessed on mobile platforms such as Apple iOS and Android. These are just a few examples of the advances in applications for sales that go well beyond the traditional sales force automation of the past.

While many vendors use the sales performance management moniker to describe their application suites or capabilities, some are just beginning to address the broad scope of needs across all sales processes. We do not assess in the SPM context vendors that provide only sales force automation applications, which really just track accounts, contacts and opportunities; that is only one portion of what sales organizations need to be efficient and effective. The SPM category is maturing rapidly, with new applications and capabilities that often available for rent in the cloud by organizations that prefer that approach to buying and installing software.

Our Value Index methodology assesses vendors across the seven categories noted above, each weighted according to its priority to buyers, and sums the results to 100 percent for scoring purposes. We placed a heavier emphasis this year on usability and manageability, which organizations indicated in our benchmark research are their highest priorities. You can read the details on our methodology and process in the full Sales Performance Management Value Index 2012 report.

Our analysis this year found eight vendors that provide robust offerings and deserve to be rated Hot, which is the highest value level and demonstrates maturity of offerings. Oracle and salesforce.com rank at the top, followed by SAP, Xactly, Microsoft, Varicent, CallidusCloud and Synygy. We note in our analysis that Microsoft and Oracle showed rapid product advancements, and their focus on usability, manageability and adaptability helped raise them in the ratings from last year. Oracle is the only vendor ranked Hot in the Capability evaluation, which is a thorough examination of all of the features needed for sales performance management. Salesforce.com has its work cut out to keep pace and maintain its leadership position in the face of fierce competition from the other vendors listed here.

We take pride in our Value Index, and we believe it is cool to be a Hot vendor. Unlike us, IT-focused analyst firms that do not research or advise sales organizations have a limited view focused on SFA or sales compensation and have created more confusion than clarity. The competitive market for these applications comprises a mature set of applications and capabilities across the roles and responsibilities of sales. Congratulations to the vendors that stood up to our detailed assessment processes and granular analysis, which represent how organizations assess and select vendors. If you want further information, please download the executive summary. We look forward to offering continued guidance to buyers on this critical application category for sales and operations professionals who need to have the most productive and result-oriented sales organizations.

Regards,

Mark Smith

CEO & Chief Research Officer

Mark Smith – Twitter

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