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Why is “No Software” Bad Positioning?

In commenting on my post entitled "Is Hosted CRM Viable?" Enough BS asks:

"I do not understand how you see local software as the answer to hosted software reliability problems. Could you elaborate?"

Simply put, local software could cache data locally and then replicate back to SalesForce.com when available thereby allowing people to access and update their data when SalesForce.com is offline. Not everyone would take advantage of this, but those who did could get past these downtime issues, and such a solution would scale a heck of a lot better than SalesForce currently does (By analogy, imagine if the all DNS queries had to route through one of the ten (10) root servers?!?)

SalesForce.com does have the Offline Edition, but it is only handles about 25% of what is needed.  For example, synchronization needs to be handled seemlessly and close to real time.  What’s more, there needs to be an option for something like Offline Edition to be the only interface users need, not the interface they use when the regular one is not available.  In other words, the user shouldn’t even need to know when SalesForce is down; everything would just keep working.

And local software can provide a lot of other benefits besides reliability. My opinion in this area is admittedly broader in scope.  If SaleForce continues to shun local software in their positioning, their competitors who do not will eventually bypass them.

For example, assume you want to update the address for ten (10) Contacts at the same company. Currently it is a very labor intensive projects.  It would be a lot easier if you have a grid of data that behaves like Excel than having to edit each individual record in a web form.  Of course, SalesForce.com could add a web feature to make this use-case easier, but they will never be able to add enough features to keep up with the practically infinite data entry and data manipulation needs their users will have, and that local software can make easier.

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