Salesforce.com Grows Up

by Michael Hickins

The on-demand applications vendor is learning to play outside its own sandbox.

Salesforce.com is introducing a suite of integration applications. In doing so, it hopes to remove a major obstacle in its pursuit of enterprise dollars: integration with installed systems.

ApexConnect is a family of integration services that will allow enterprises to integrate their complex on-premise systems with on-demand point applications offered by Salesforce.com.

A key feature of the technology is ConnectOut, an outbound API  that lets Salesforce.com's on-demand applications send data to the including middleware systems, message busses and other on-premise software applications in real time.

This means that new customer data, such as a new address of a closed sale, can be immediately reflected in a company's enterprise database or ERP .

Currently, data is synched up between the two systems, usually overnight, based on a call from the legacy system to the on-demand application.

Ariel Kelman, director of Apex product marketing at Salesforce.com, said that ConnectOut turns Salesforce.com technology into a more proactive member of the data integration process. "Those systems no longer have to ask us for critical information," he told internetnews.com.

Forrester analyst Liz Herbert said the application represents progress for Salesforce.com on the integration front. "It's a big step forward in Salesforce.com's integration capabilities."

ApexConnect also includes a native connector for Oracle 11i for synchronizing account information between Salesforce and the Oracle database. This is quite a turning point for a company that has championed software-as-a-service (SaaS) while making "death to software" its mantra.

It is also an admission that it will have to work with its sworn enemies, on-premise software vendors, if it wants to become a truly significant player in the large enterprise space. "All of our large enterprise customers are dealing with one or multiple back office or legacy systems," said Kelman.

Herbert noted that Salesforce.com is finally recognizing that enterprise customers will continue to use their legacy enterprise software applications. "This whole announcement shows they're maturing and becoming more enterprise-ready," she said.

The application will allow on-demand solutions to gain more relevancy within an enterprise environment because it effectively turns applications from Salesforce.com into peers of the enterprise systems. "If you want to be involved with things that are mission critical, you have to do things that support real-time integration," said Herbert.

Kelman said the applications are intended to address a significant pain point for enterprise customers. "People are spending a lot of money on integration."

Indeed, research from Aberdeen Group suggests that almost 40 percent of IT budgets worldwide are dedicated to software integration efforts.

The ConnectOut feature is currently scheduled to be available in conjunction with the release of Winter 07. Customers will not be charged extra for this feature. ConnectOracle will be available in early 2007, for a $12,000 annual fee for Salesforce Enterprise Edition and Unlimited Edition customers.

The SaaS business model is predicated on the idea that customers will pay for the service so long as they are satisfied, but that they can also walk away whenever they like because they aren't tethered to their sunk costs with an on-premise system.

Kelman said the latest suite of applications recognizes this reality. "If we can keep our customers happy with the recurring revenue model, they'll keep renewing."

  This article was originally published on Monday Nov 27th 2006
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