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What Every Smart Company will soon have…

Salesforce.com IdeaExchangeThe tone on this blog has been rather negative lately, I admit, but I generally rant about the things that bother me not about those that don’t. :-)  

However, I really do have to give Salesforce.com credit for this one: IdeaExchange is one incredibly great idea (pun intended), and every smart company either will or soon should do the same.

I’ve been meaning to blog about this since they first released it but Mark Mangano’s post over at SalesforceWatch.com just reminded me to get off my duff and write about it.  By the way, another company now doing the same that Mark didn’t mention is Yahoo Suggestions.

Now if Salesforce.com will just listen to those submitted ideas… ;-)

Must FAX to Change Credit Card

Riddle me this: Why does the self-proclaimed "Leader in Software-as-a-Service" require you to fill out a form and fax it in to change the credit card used for billing on your account? This is the email I got from their billing department when I asked where on their website I would go to change my credit card information:

From: Omar Hernandez [mailto:
 This e-mail address is being protected from spam bots, you need JavaScript enabled to view it
 ]
Sent: Monday, January 29, 2007 12:04 PM
To: Mike Schinkel
Subject: RE: Need to change billing info

Mike,

If you would like to change the credit card on file,please fill out and sign the form I have attached and return back to me. Once I get this form, I willupdate your account immediately. You can send it tome either by fax at my number below, or by email asan attachment. Please let me know if you have any questions. 

Regards,
Omar Hernandez
salesforce.com

 This e-mail address is being protected from spam bots, you need JavaScript enabled to view it
 
415-536-XXXX  Phone
415-901-8494  Fax

I thought the whole idea of "Software-as-a-Service" was that you did things online at their website! Sheesh!

Small Business Owners; Beware the $695 Offer!

If you are a small business owner that is considering the use of Saleforce.com, don’t get seduced by their $695 for five (5) users per year on Team Edition; it is simply a bait and switch tactic like a crack dealer to get you hooked and unable to quit!

Anytime you implement a system that is critical to your business such as accounting or customer relationship management you’ll put significant effort into making it work for your business. Once implemented your business processes will usually become so intertwined with the app it will be almost impossible to switch to something else! And that is what Saleforce.com is preying on.

Although you may have only budgeting $695 for a year of Salesforce.com you’ll have to ante up for more than five (5) times that if you later realize you need features not included with Team. That’s $3900/year for the Professional Edition with five (5) users, or worse it’s $9000/year for the Enterprise Edition. That’s a 561% increase from Team to Professional, and a 1295% increase from Team to Enterprise!

It only gets worse if you have more than five (5) people that need to access Salesforce.com. And note that they don’t have less expensive access for sales assistants, everyone with a login has to pay for a seat based on the full price for the Edition.

How bad is it? Let’s take a look at the features you DO NOT get if you are on Team Edition as per Saleforce.com’s own edition comparison (think you might need any of these?):

  • Salesforce Automation
    • Salesforce Console
    • Customizable Forecasting
    • Contract and Renewal Management
    • Integration with Third-Party Methodologies
    • Product Catalog
    • Revenue Schedule Management
    • Account and Opportunity Team Selling
    • Client Lifecycle Management
    • Advanced Call Scripting
    • Territory Management
    • Mass Quota Updates
    • Worklow and Approvals
  • Marketing Automation
    • Mass Email
    • Lead Management, Routing, and Assignment
    • Web Site Lead Capture
    • Web Site Lead Tracking
    • Campaign Management
    • List Management
    • Advanced Call Scripting
    • Worklow and Approvals
    • Salesforce for Google AdWords
  • Customer Service and Support
    • Document Management
    • Case Queues and Auto-Assignment
    • Advanced Case Escalation and Notiication
    • History Tracking
    • Suggested Solutions
    • Multilingual Solutions
    • Agent Console
    • Service Dashboards
    • Call Center Edition
    • Web and Email Case Capture
    • Self-Service Portal and Knowledge Base
    • Asset Management
    • Service Entitlements
  • Real-Time and Historical Analytics
    • Dashboards
    • Analytic Mash-Ups
    • Read-Only Report Access
  • Desktop and Mobile CRM
    • Offline Edition
    • Desktop Solution Administration
    • Apex Mobile
  • Data Model Customization
    • Custom Object Sharing Controls
    • Smart Field Defaulting
  • User Interface Customization
    • Global Translation Workbench
    • Rename Tabs and Labels
    • Multiple Custom Page Layouts
    • Record-Dependent Page Layouts
    • AJAX Toolkit
    • Standard Button Overrides
  • Enterprise Administration
    • Account-Based Sharing Controls
    • Record-Level Security
    • Field-Level Security
    • Multidepartmental Administration
    • Profile-Based Departmental Security
    • Delegated Administration
    • Opportunity, Lead, and Case-Sharing Controls
  • Business Process Controls
    • Lead and Case Routing
    • Multistep Approval Processes
    • Worklow Automation Rules and Tasks
    • Multiple Business Processes
  • On-Demand Database
    • Weekly Export Service
    • Real-Time Database Mirroring
    • Data Loader
    • Salesforce Sandbox
  • Integration Platform
    • Apex Web Services API 8.0
    • Single Sign-OnóLDAP Integration
    • Salesforce Connector for SAP R/3

How about of you are on Professional? These are the things you don’t get on Professional Edition?:

  • Salesforce Automation
    • Account and Opportunity Team Selling
    • Client Lifecycle Management
    • Advanced Call Scripting
    • Territory Management
    • Mass Quota Updates
    • Worklow and Approvals
  • Marketing Automation
    • Advanced Call Scripting
    • Worklow and Approvals
  • Customer Service and Support
    • Service Entitlements
  • Real-Time and Historical Analytics
    • Read-Only Report Access
  • Desktop and Mobile CRM
    • Desktop Solution Administration
  • Data Model Customization
    • Custom Object Sharing Controls
    • Smart Field Defaulting
  • User Interface Customization
    • Multiple Custom Page Layouts
    • Record-Dependent Page Layouts
    • AJAX Toolkit
    • Standard Button Overrides
  • Enterprise Administration
    • Field-Level Security
    • Multidepartmental Administration
    • Profile-Based Departmental Security
    • Delegated Administration
    • Opportunity, Lead, and Case-Sharing Controls
  • Business Process Controls
    • Multistep Approval Processes
    • Worklow Automation Rules and Tasks
    • Multiple Business Processes
  • On-Demand Database
    • Real-Time Database Mirroring
    • Data Loader
    • Salesforce Sandbox

And here’s the list of things that even Professional Edition customer have to pay extra for:

  • Salesforce Automation
    • Product Catalog
    • Revenue Schedule Management
  • Marketing Automation
    • Web Site Lead Tracking
    • Campaign Management
    • List Management
  • Customer Service and Support
    • Asset Management
  • Desktop and Mobile CRM
    • Offline Edition
    • Apex Mobile
  • On-Demand Database
    • Weekly Export Service

But then here’s another "gotcha"; let’s assume your business is limping along on a Team Edition license because you can’t really afford to pay for Professional and then you hire an 11th person needing access to Saleforce.com, you are screwed! Time to ante up $8580 for a year allowing 11 people access to Saleforce.com!

Now many of you might be thinking that I’m offbase and that I’m begrudging Salesforce.com for trying to make its profit. But please realize most small businesses by definition are scraping to get by and every little expense can be a killer. Small businesses typically just cannot afford to pay for a Professional license let alone an Enterprise license. Yet many of the features small businesses need are simply not available in Team edition are import for small businesses.

Saleforce is trying to position itself as a leader. Leaders don’t implement strategies designed to trick their customers. Instead, leaders focus on meeting their customer’s needs at a price that is fair to their customers. Companies selling intangibles like that which Saleforce offers set their prices based on their market and then focus on meeting their customers needs, not on milking them more then they can typically afford.

What should Saleforce.com do differently?  Drop the 10 user limit on Team Edition and make sure that the features needed by small business are included in Team Edition. Things like SAP integration; well, they can leave that to the Entreprise edition. Then focus on getting as many users as possible, not just milk the users they have. They have a chance to be "it" for SaaS, but their policies are designed to give their competitions as much ammunition against them as possible.

Now don’t get my wrong, there are many companies where it is well worth $150/month to improve your sales team’s productivity, but for many others it’s just not cost effective. In either case, Salesforce.com should rely on selling their value and not trying to set traps; this is just indicative of the general disdain which Saleforce.com has for its customers.

They’ll Nickel & Dime you to Death

One of my biggest complaints with Salesforce.com is how they seem focused on ways to nickel and dime their customers. I was just reading one of their help files[1] and found the following example (emphasis mine.):

Salesforce.com recommends that all customers back-up their salesforce.com data. All customers are advised to perform a weekly export. An export should be generated prior to any data project performed by an organization via the import wizards or DataLoader imports, updates, or deletions).

A weekly export service is available to customers, and is outlined below.

The weekly export service allows organizations to export a complete set of their Salesforce data, including all attachments, for archival purposes. A system administrator can request a data export once every seven (7) days. The salesforce.com service will automatically extract the organization’s data into compressed .csv data files and send an email confirmation to the administrator requesting the export.

The email will contain a web address to a secure page, from which the administrator can download the series of compressed data files.

To request a data export, follow the steps listed below.

1. Click on:

Setup | Administration Setup | Data Management | Data Export.

2. Select the "Include attachments" check box (if desired).

3. Select any data that you would like to include by checking the box next to the name of the object. Selecting the "Include all data" box will include data from all tables.

4. Click the "Data Export" button.

A confirmation email will be sent when the export has completed, with a link to the export files, as mentioned above.

The weekly export service is available for all Enterprise Edition customers, and is included in your license fees.

The weekly export service is available to Professional Edition customers as an add-on service, for $50/month.

To purchase this feature, please contact your salesforce.com sales representative, call us at 1-800-NO SOFTWARE, or send an email to This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

Now isn’t it a little arrogant and self-serving to require customers to pay extra for data backup when the loss of their data will typically be because of Saleforce.com’s failure to protect the data, not their own?

Oh well, just another case of Salesforce.com nickeling and diming their customers…

  1. I would have linked to it, but the URL won’t work unless you are logged in to my account. Grrr.

An Achille’s Heel for Competitors to Strike

A few days ago I blogged about how SalesForce.com’s contracts force you to pay for the maximum licenses you’ve needed instead of the number you currently need.

Let’s think about this from a SalesForce.com’s competitor’s standpoint. If I were a competitor of SalesForce.com, I would scream as loudly as possible that "Unlike SalesForce.com, our contracts allow you to downside licenses so you pay only what you need today, not the maximum you needed in the past!"

What do you think?  Do I have any takers?

Effects of the “No Downsizing” Clause

A few days ago I blogged about how SalesForce.com’s contracts force you to pay for the maximum licenses you’ve needed instead of the number you currently need.

Let’s consider what effect that will have on prospective SalesForce.com customers over time. The billing person I spoke to when I wanted to downsize told me she frequently has customers asking to reduce licenses only to be shocked to find out that SalesForce.com’s contract does not allow customers to downside. She said it was because they were public and needed to hit their quarterly numbers. Hogwash! It’s because they don’t value meeting customer’s needs. And something tells me she didn’t come up with that thought on her own.

Anyway, so what effect?  Over time I believe (at best) SaleForce.com customers will recommend avoiding SaleForce.com to prospective customers, and (at worse) will cause many businesses to switch to other providers when their contract expires.  If nothing else, it will leave a bitter taste for SalesForce.com with anyone that really needed to downsize and could not.

Can you say: "Short Sighted?"

Comparing cost of SaaS to software w/SysAdmin can be Disingenuous

I’d like to make a further point about Mike@msn’s comment on my earlier post Wait! Don’t Add that (SalesForce.com) License! related to when he said (emphasis mine):

Consider the downside of purchasing 100 *perpetual* license seats, a server, and Sys Admin for an on-premise solution that goes seasonally unused.

Yes my post referenced a hypothetical 100 user scenario, but in small business scenario such as 10 users or less there is rarely going to be a Sys Admin even for a packaged software solution so including them as part of the cost comparison doesn’t always fly. In many small business cases, the Sys Admin is the business owner! And for the company that seasonally employs 10 sales reps but usually only needs one, the cost of those extra nine licenses offseason are just as painful to that small business as the cost of the extra 90 licenses is for the larger one.

Predatory SaaS licensing isn’t okay just because it’s better than purchased software

Mike@msn commented on my earlier post suggesting that SalesForce.com customers should be very careful when adding licenses by saying that:

It’s definitely a risk reward proposition, but at least the Saleforce.com licenses are only annual and carry no infrastructure costs.

Consider the downside of purchasing 100 *perpetual* license seats, a server, and Sys Admin for an on-premise solution that goes seasonally unused.

The perpetual license fees are amortized over 3-5 years, whereas the ROI of sForce is usually achieved within the year.

Mike makes a good point, but I do think it’s kind of like saying after the car accident: "Hey, you lost your leg but look at the bright side, you are still alive!

As a counter example, take a look at Sun Grid Compute Utility promising to sell computing like electricity is sold; i.e. pay for what you need, and only when you need it.  That’s how SalesForce.com should be sold!  Add a user, increase your invoice.  Delete a user, lower your invoice (or get a credit.) 

Imagine if your local electric power company was allowed to charge each of it’s customers a flat rate equal to the rate for the peak amount of power they used during the prior "contract" period?  Their customers would be in the poor house, and they’d probably be making more profit than Exxon Mobil did in 2005!

So in other words, comparing SaaS to packaged software is not the point. Just because a specific SaaS provider offers a cost that is only marginally better optimized for customer’s needs than packaged software doesn’t mean they have optimized for customer’s needs. Maybe it is only me but I don’t think we should just accept predatory licensing simply because it costs slightly less than a less evolved alternative.

Wait! Don’t Add that License!

The day before yesterday I blogged about how SalesForce.com’s contracts force you to pay for the maximum licenses you’ve needed instead of the number you currently need.

Let’s consider what effect that might have on you as a SalesForce.com customer: Because of the very high penalty for adding licenses that are later not needed, you should be very careful before adding a new license.  If you add a license you later don’t need then tough; you still have to pay for it! (godforbid you add a large number of licenses you later don’t need!)

So SalesForce.com contracts create a big disincentive for companies to add licenses because they can never subtract licenses from their bill.  Stupid, stupid, stupid.

Stupid Contracts Eliminate Potential Customers

Yesterday I blogged about how SalesForce.com’s contracts force you to pay for the maximum licenses you’ve needed instead of the number you currently need.

Let’s consider who cannot use SalesForce.com because of their self-centered and short-sighted contracts:

Any company with sales that vary significantly by season

Imagine if 75% of your sales occur during October thru December and you need 100 sales reps to generate those sales. However, during January thru September you only need about 10 sales reps to cover demand. For this scenario SalesForce.com’s contracts would require you to pay for 90 licenses you don’t need during nine (9) months out of the year.  That comes out to be $11,250/mon, or $101,250/year more than you should have to spend if you have Enterprise Edition.  Whew, talk about blowing your budget!!!

So given that scenario, what fool would ever sign up for SalesForce.com if they have significantly varying demand by season?  Probably the fool that didn’t read the extra fine print legalese, that’s who!  But anyone smart with that scenario would avoid SalesForce.com like the plague!

So SalesForce.com leaves the money on the table for smart prospective customers with seasonal business, and they screw the rest. Stupid, stupid, stupid.