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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?"

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