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Is SalesForce.com TRUSTWORTHY, Redux?

Peter Coffee, one of the two men (formerly) from the media I respect the most[1] just blogged about how code running on Apex "is safe" from prying eyes because you never install at a customers site. However, he then goes on to say:

The only third party that could possibly access the actual code — salesforce.com, for example — is the one with the greatest interest in helping to protect it, and thus protecting the reputation of the multi-tenant platform that supports it.

Well, as I blogged previous (but unfortunately have yet to have the time to follow up), I have serious concerns about Salesforce.com not always putting it’s interests ahead of its customers. Whereas a customer using a company’s code illegally might result in an opportunity lost cost, the overall cost to the company is rarely if ever business threatening[2]. On the other hand, if Saleforce.com decides that an AppExchange vendor is occupying a spot that Saleforce.com would like to occupy, Saleforce.com can put them out of business like that.

While I do trust Peter Coffee as I implied above, he doesn’t make the decisions at Salesforce.com, Marc Benioff does. And based on everything I’ve seen, I don’t trust the cabal led by Marc Benioff not to have situational ethics when a significant market benefit might potentially be gained.

But then, maybe that’s just me.

  1. The other person being Jon Udell
  2. If it is business threatening, then the business has much bigger problems that management should be more concerned about.

4 Responses to “Is SalesForce.com TRUSTWORTHY, Redux?”

  • Peter Coffee responded:

    Well, I’m glad to know that I’m personally trusted. That’s a good start.

    As for Marc, I don’t know of any other current-era CEO who’s gone farther beyond mere Googlish “Don’t be evil” to build a corporate ethic of “Do good.”

    But ethics and track record aside, from a pure game theory point of view it would be a terrible strategy for salesforce.com to do anything that makes anyone question its desirability as a business partner. The company could only expect to get away with the tactic you envision exactly once — and we’re too young to be looking for a Last Big Score. We’re here to build a platform, and we plan to play a long game.

  • Mike Schinkel responded:

    Peter: It’s not the big things, its the little things. And over time, it’ll be the big things too. People don’t start out doing bad things that are big but as they continue doing them, like drugs, they keep looking for the bigger high until eventually they are caught.

    IMO Salesforce.com’s corporate culture views customers with disdain so I don’t really trust them at any level. Sure they are nice and positive to people at their dog and pony shows, but if you want to really understand what’s wrong with Salesforce.com, read their contracts. Salesforce.com’s contracts are as one sided as terrorist trial at Guantanamo! (oops, nobody’s had a trial there, they’ve just been held indefinitely. So never mind. ;)

    Anyway, I’ve blogged in more detailed reply and it will publish on 2007 Jan 31st.

  • Peter Coffee responded:

    You say, with the air of someone making a prediction, “People don’t start out doing bad things that are big but as they continue doing them, like drugs, they keep looking for the bigger high.”

    That’s a pretty bleak assessment of human nature, isn’t it? What about the high that people get from knowing they’re doing *good* things? I’d hate to think of a world in which that wasn’t a factor.

    As for “one-sided” contracts, I invite comparison of this statement from our 2006 Annual Report — “Customers typically have the right to terminate their contracts for cause if we materially fail to perform” — with this clause from a popular end-user license agreement: “[VENDOR] warrants that the Software will perform substantially in accordance with the accompanying materials for a period of ninety (90) days from the date of receipt.” The latter seems somewhat at odds with the notion (expressed in the same EULA) that “The Software is licensed, not sold.” The former seems entirely consistent with the idea that salesforce.com sells a service.

  • Mike Schinkel responded:

    Thanks again for the comments Peter.

    >>>>”You say, with the air of someone making a prediction, ‘People don’t start out doing bad things that are big but as they continue doing them, like drugs, they keep looking for the bigger high.’ That’s a pretty bleak assessment of human nature, isn’t it? What about the high that people get from knowing they’re doing *good* things? I’d hate to think of a world in which that wasn’t a factor.”

    Actually, not at all; you didn’t read the context. If someone starts out doing small bad things, they typically move on to larger bad things. If someone starts out doing small good things, they will probably go in the reverse direction. IOW, only people going down a negative path will escalate negatively, and not all will, but many will and when you are asking about trust, i.e. risk management, assuming the worst is safer. Yes, I’m making broad generalizations, but to be more accurate I’d have to write a lot more and generalizations often are generally accurate (pun intended.)

    >>>>”As for ‘one-sided’ contracts, I invite comparison of this statement from our 2006 Annual Report — ‘Customers typically have the right to terminate their contracts for cause if we materially fail to perform’ — with this clause from a popular end-user license agreement: ‘[VENDOR] warrants that the Software will perform substantially in accordance with the accompanying materials for a period of ninety (90) days from the date of receipt.’ The latter seems somewhat at odds with the notion (expressed in the same EULA) that ‘The Software is licensed, not sold.’ The former seems entirely consistent with the idea that salesforce.com sells a service.”

    That’s one small component of the contract, and I’m not asking for relatively comparisons; just because there is worse doesn’t make Saleforce.com good.

    Peter, let me ask it differently: why does Salesforce.com require annual contracts at all? Why not month-to-month? Typically contracts are in place because of high start up costs (You are not going to try to tell me Salesforce.com has high start up costs for small business customers are you? If they are, someone on the inside is being incompetent) or because a company wants to lock in customers for their own benefit. Why doesn’t Salesforce.com trust it offering and be willing to let it’s customers decided to leave if they are not getting what they need out of Salesforce?

    My belief is that if you went to month-to-month contracts for small accounts you would 1.) cut your sales costs, 2.) increase your customer base much more rapidly, 3.) have higher customer satisfaction among smaller businesses, and 4.) ultimately make more money. But as is, I don’t see Saleforce.com’s culture allowing that.

    Get Salesforce.com to show us that it cares as much about the financial needs of its customers as it cares about it’s own needs, and if you do the company will be rewarded. But the current contract is about lock-in, not meeting customer’s needs.

    Check out the posts I have scheduled for the next two days that cover other issues related to contracts, and here are some of my past posts on the subject:

    One-sided Contracts make for Unhappy Customers http://www.thoughtsonsalesforce.com/2006/05/onesided_contra.html

    Stupid Contracts Eliminate Potential Customers
    http://www.thoughtsonsalesforce.com/2006/05/stupid_contract.html

    Wait! Don’t Add that License!
    http://www.thoughtsonsalesforce.com/2006/06/wait_dont_add_t.html

    Predatory SaaS licensing isn’t okay just because it’s better than purchased software
    http://www.thoughtsonsalesforce.com/2006/06/dont_accept_a_p.html

    Comparing cost of SaaS to software w/SysAdmin can be Disingenuous
    http://www.thoughtsonsalesforce.com/2006/06/comparing_cost_.html

    Effects of the “No Downsizing” Clause
    http://www.thoughtsonsalesforce.com/2006/06/effects_of_the_.html

    An Achille’s Heel for Competitors to Strike
    http://www.thoughtsonsalesforce.com/2006/06/a_competitive_a.html

    Peter, I’m not writing this to bash you or Saleforce.com; see the tagline on this blog. I actually want to see things change for the better. You joining gives me hope, but I’ve got to bring your awareness to the problem and get Marc and the media’s attention at the same time.

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