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Salesforce.com Aims to Pump Up Chatter's Volume

By Erika Morphy CRM Buyer ECT News Network
Nov 19, 2010 2:41 PM PT

Salesforce.com is planning to release a free version of its real-time social collaboration application and platform, Chatter, according to comments CEO Marc Benioff made during the company's recent earnings call.

Salesforce.com Aims to Pump Up Chatter's Volume

Specifically, the company is working on "a kind of virally based" product, he said. The company plans to introduce it at Dreamforce, which is scheduled for early December.

The new version, which will be a stripped-down iteration of the now generally available commercial application, will operate within Salesforce.com's existing network. That way, customers will be able to email and send viral invitations to other would-be corporate users.

The point of the free version, Benioff said, is to accelerate adoption of the application.

Salesforce.com did not return CRM Buyer's request for comment in time for publication.

Fee-Based Versions

Generally released in June, Chatter allows employees to create profiles, as well as to send feeds and status updates about projects, account and clients. It launched with some 50 apps in AppExchange, including such offerings as ServiceMax Suite and ServiceMax Chatter Volume, which track field service activities; FinancialForce Accounting and Chatterbox, an accounting solution; and Cloud Apps Carbon '10, which helps companies identify ways to reduce operating costs.

In September, Salesforce.com announced plans for an upcoming mobile version.

Salesforce Chatter is included free with all paid user licenses for Salesforce CRM and Force.com.

The company has also introduced a Chatter-only license that provides access to collaboration features such as profiles, status updates, feeds, file sharing, groups and ideas, as well as limited access to the Force.com platform. That product is priced at US$15 per user per month.

Too Expensive?

It may be that the price point is too high for the widespread adoption Salesforce.com was anticipating, speculated Nucleus Research Vice President Rebecca Wettemann.

"I would definitely say this is an adoption play on the part of Salesforce.com," she told CRM Buyer.

One challenge the app might be having is that while it is a good application, it can be distracting -- much like Facebook, she continued. "I think we will see companies weigh how much it will enhance productivity before they decide to use it. Just because something is free doesn't mean it should be automatically adopted."

Salesforce.com has the luxury of experimenting with its pricing model, even offering a version of Chatter for free, Jeffrey M. Kaplan, managing director of THINKstrategies, told CRM Buyer.

The company just posted stellar earnings and is sitting on a lot of cash, he observed.

"They are trying to expand their footprint within organizations and expand the number of organizations using Chatter as well. This is a good way to try to reach that goal," said Kaplan.

The free offer might be enough of a tipping point to get more companies using Chatter, he suggested. "Social networking tools like Facebook have proven to be popular, and Chatter has proven to be popular with the companies that are using it as well. This is a way of building on that momentum."

A Jealous Facebook?

Indeed, there may come a day when Facebook will regret handing over this corporate social networking market to Salesforce.com, said Kaplan.

"I remember last year at Dreamforce, Marc [Benioff] said that they asked Facebook if they minded if Salesforce.com went after this market, and Facebook said 'no problem.' I think maybe one day Facebook will regret not having taken this path too."

That scenario is not at all likely, in Wettemann's view.

"The ability of Facebook to be taken seriously as a business tool has been shot. If this market is going to take off, it will be led by Salesforce.com," she predicted, "which, after all, is a trust tool among businesses."

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