Over the last several months, I have heard the same question from quite a few entrepreneurs building business software: “Should we build on the Force.com platform offered by Salesforce.com?”
Of course, the most common answer is, “It depends,” but I thought it might be helpful to outline some of the advantages and challenges of building on Force.com.
What is Force.com?
Most people think of Salesforce.com as a cloud-based CRM (customer relationship management) application, but the company also has a cloud-based platform called Force.com that can host other types of applications. Force.com enables developers to create and deploy applications that can leverage core functionality provided by Salesforce.com, such as Chatter, workflows, business processes, mobile software development kits, communities, and real-time hierarchical reporting. Companies can host their apps on Force.com, as an alternative to Amazon Web Services, Rackspace, SugarCRM, or other cloud platforms.
At Emergence Capital, we have been familiar with Force.com from the beginning — in fact, Emergence co-founder and General Partner Gordon Ritter helped build the precursor to the Force.com platform back in 2002, and we hosted a Force.com contest with Salesforce.com in 2008, which led to our investment in ServiceMax. Another portfolio company, Veeva Systems, has built the leading healthcare industry cloud CRM platform on Force.com, and recently had a successful IPO on the New York Stock Exchange.
Why go with the Force?
Entrepreneurs tend to like several key aspects of using the Force.com platform.
Developers can leverage functionality so they can get their own applications to market even faster. This reduces coding time, infrastructure headaches, and enables efficient uses of startup capital.
For startups targeting enterprise customers, the best-in-class security and certifications enable customers to be comfortable with sharing their sensitive data. And because most IT departments are familiar with the Salesforce platform from their own evaluation for internal usage, IT due diligence is not a major hindrance during the sales cycle.
Finally, Salesforce is motivated to have successful companies on the platform, as it’s a good revenue generator and helps fill holes in the company’s offering. Joint customers of Salesforce and a startup can benefit from a seamless, integrated experience.
Forgoing the Force
One of the biggest concerns about building on Force.com is the concern that an entrepreneur is subject to the pricing whims of Salesforce. There will always be some risk that Salesforce might increase pricing of the Force.com fees once the initial contract expires. Pricing typically is a percentage of revenue.
Another challenge is the lack of control. When building on Force.com, you are not in control of the platform and you might need to re-write parts of your application if Salesforce changes features or tightens security.
Companies also worry about competitive differentiation. What if Salesforce decides build its own comparable application on the platform, making it difficult for customers to decide between similar options? Don’t expect to get any distribution help from Salesforce.
Salesforce owns about 14 percent of the CRM market, which is a healthy share. Their sales reps can hit their quota by just selling CRM and/or other Salesforce products, including marketing, HR, customer support, etc. Salesforce sales reps don’t have bandwidth to learn new products, especially if it’s not part of their quota mandate. Thus, the Salesforce sales reps will only bring your product into a deal if you can help them sell their product more quickly.
If many of your customers (or prospective clients) are also Salesforce customers, it might be better to just integrate with Force.com without building on the platform – companies like Birst, Box, Marketo, and Workday took this route. This can still enable an integrated experience for your customers.
Who is Building on Force?
Over 400 companies, growing 100 percent a year over the last four years, have chosen to build their core products on Force.com, including Apttus, CipherCloud, FinancialForce, Gainsight, GreatVines, JobScience, Kenandy, nCino, and Resilinc. Other companies have built one or more products on the Force.com platform such as Concur, Cornerstone OnDemand, Docusign, Xactly, and Zuora.
Judging by the growing popularity of the platform, entrepreneurs often find that the benefits outweigh the risks of building on Force.com. They can build solid, high-growth businesses quickly and with lower risk on this platform, and generate tremendous value by focusing on their core expertise and not recreating the platform itself.
Sean Jacobsohn (@sjacobsohn) is a venture partner with Emergence Capital, a leading venture capital firm focused on cloud applications. Before Emergence, Jacobsohn was an executive at Cornerstone OnDemand (CSOD), HighTail, and WageWorks (WAGE). Veeva Systems, ServiceMax, Box, InsideView, and Intacct — all of which are built on or integrated with Force.com — are Emergence portfolio companies.
Salesforce, the Customer Success Platform and world's #1 CRM, empowers companies to connect with their customers in a whole new way. The company’s platform and application services include: Salesforce Sales Cloud, the world's #1 sale... read more »
Powered by VBProfiles
VentureBeat’s VB Insight team is studying email marketing tools.
Chime in here, and we’ll share the results