Chatter is Not Social CRM

I was talking with a friend who works for an unnamed big enterprise software company, here’s how the conversation went:

ME: Hey, so what new stuff are you guys working on?

HIM: Not a lot, so-and-so wants to build a social CRM product.

ME: Really? I’ve been spending a lot of time in that market, it’s really interesting.

HIM: Yeah it is, so-and-so wants to put something like Chatter on our on demand CRM product.

ME: Pause

ME: So you guys realize that bolting on a social feature is not what makes CRM truly social?

HIM: Pause

HIM: Yeah, but it’s all that so-and-so can talk about.

There’s a huge difference between CRM and Social CRM and being one doesn’t mean you can be the other. There is a legitimate ongoing debate about the nature of social CRM itself, whether it’s a product or a strategy, but for the sake of argument let’s just say it’s a product which dramatically transforms the manner in which you engage with your market and the capabilities are far afield from what traditional CRM products are capable of doing, however (and it’s a big HOWEVER) social CRM does not replace traditional CRM products at all but rather extends and augments them while at the same time building out a distinct product footprint on their own.

I really like Chatter because it is a social layer anchored in the data model that has delivered, which by that I mean they have built the Chatter feature set on top of the data objects rather than just building a chat product that they offer as a new feature. It makes a ton of sense and should deliver far more value than just trying to copy Yammer.

However, as much as I like Chatter I recognize that this is a social feature and it is not social CRM… they are two completely separate things. Big enterprise software companies don’t have the skillset for building out community based social CRM offerings, which is why they will acquire their way into the market, and this is a good thing because the social CRM market is far too crowded with undifferentiated companies and products which don’t have the capacity to sustain themselves over the long haul.

The consolidation has already begun and by this time next year we will have seen the bulk of the social media monitoring and brand reputation analytics and ideation on R&D and product/project management acquired by larger companies. and VMware Spring Together and VMware announced a significant joint service called VMforce that allows developers to run Java applications inside Salesforce’s cloud. I would encourage you to read Salesforce’s blog announcement on this as it is quite detailed with regard to what it is and more importantly, why it matters.

From where I sit this seems pretty significant even if Java has strong competition from other development environments for hosted applications. What it means is two things, enterprise Java apps now have a clear path to the cloud, and secondly Java developers have the ability to write apps that take advantage of well established database, identity management, integrated search and mobile capabilities without having to adopt new frameworks or toolsets.

Time will tell whether or not Salesforce is successful in wooing Java developers but I have no reason to believe that they will not be. This partnership takes advantage of widely adopted services like Tomcat, Eclipse, and the Spring Framework, which reinforces the core messages that Java developers are welcome up in the cloud.

Several Enterprise Irregulars have offered their views, I would encourage you to read them:

Larry Dignan

Vinnie Mirchandani

Bob Warfield

Salesforce Enters Data Services Market

The announcement that is acquiring Jigsaw caught my attention for a couple of reasons.   

Jigsaw’s unique Wikipedia-style crowd-sourcing model delivers the world’s most complete, accurate and up-to-date business contact data

The combination of Jigsaw and will allow companies to easily find, purchase and manage data that is seamlessly integrated with their CRM apps makes strategic entry into the $3 billion market for cloud-based data services

With Jigsaw and, data service providers like D&B, Hoover’s and LexisNexis have the opportunity to expand existing partnerships to deliver new services in the cloud

[From Enters into a Definitive Agreement to Acquire Jigsaw — SAN FRANCISCO, April 21 /PRNewswire-FirstCall/ —]

First, now we know what Salesforce is doing with the $500 million in debt that they raised back in January. At the time it was expected that they would go on an acquisition binge with the fresh capital but I think most analysts expected that they would be making some very large acquisitions using the cash and their relatively rich stock currency; I, like most, did not expect that they would be doing acquisitions like this for all cash. It’s somewhat academic but interesting nonetheless because it provides a window into the mindset of Benioff and team… they expect their stock to continue to go up in value.

Jigsaw is in itself an interesting company, if for no other reason than they prove rather conclusively that a company can weather the criticisms of Silicon Valley and build a business that has intrinsic and sustainable value. I’ve met CEO Jim Fowler on a couple of occasions and have always been impressed by what they are doing. I also like the fact that they have a maniacal focus on a specific opportunity and have plowed forward to realize it over the course of many years.

Lastly, this is an interesting acquisition because it puts Salesforce in competition with data service providers who would have previously considered themselves strong allies of Salesforce, namely D&B and Hoovers, both offering applications on AppExchange. One really has to wonder what the tone of conversations going on inside of those companies is this morning. To some degree this also puts on a competitive intersection with LinkedIn, both companies now offering the ability to build an organizational chart for a target organization (aka sales prospect).

It will be interesting how the integration of Jigsaw plays out in the near term but I suspect this is not the first data services acquisition we will see pull off. Congratulations to Jim and his team, they weathered a lot of criticism and derision over the years, it’s nice to see that they are being rewarded for it.