Dreamforce: Salesforce.com knits its way into Cloud ERP

One of the enduring mantras from Marc Benioff at Salesforce.com has always been that the company wants to 'stick to the knitting'. In other words, stick to what the core business of the company is - CRM and sales force automation - and not start dabbling in other areas such as HCM and ERP.

Or rather, not start dabbling directly. What the Benioff vision has been is to encourage partners and third parties to develop HCM and ERP and other business apps on top of Salesforce.com's Force.com platform and ensure that there is tight integration between them and the core Salesforce.com offerings.

So while the likes of NetSuite pitch their integrated suite approach to business applications, the Salesforce.com version of the world involves multiply-sourced applications built around the common base of Force.com with Salesforce.com itself therefore at the core of the application portfolio.

This week's rash of ERP for manufacturing announcements at Dreamforce can be seen as a prime example of this in practice. NetSuite has long talked up Cloud ERP as a viable market and some of the big ERP giants are also dipping their toes in the Cloudy waters, most notably SAP of course.

Now after this week there are now two potential new Cloud ERP firms in the Salesforce.com ecosystem in the shape of old hand Infor - the third largest ERP vendor in the world after SAP and Oracle - and newcomer Kenandy - which comes with a sterling management pedigree of ERP old guard.

With Infor, Salesforce.com has taken a stake in the privately held firm as the two firms have worked on a global marketing automation and order management system, which sits on the Salesforce Force.com platform and integrates with Salesforce CRM.

Specifically Infor is planning to roll out three applications built with Salesforce.com's Force.com development platform under the marketing header of "InForce." The first, InForce Everywhere, will enable Salesforce.com CRM users to view information from Infor ERP applications, such as transactions and customer data. A second planned application, InForce Order Management, will provide quote, order and proposal management capabilities. The third, InForce Marketing, is a marketing automation application.

Infor President Charles Phillips - formerly Oracle President - joined Benioff on stage at Dreamforce to explain the rationale behind Infor's push into the Cloud. Phillips explained:

“We have been working in the same industry for 15 years and now we are finally on stage together. We have conservative customers but they are slowly moving to the Cloud. Five years ago it was a no go, but now people are showing interest and the buzz is seeping down. We now have one million subscribers to the Cloud. ”

He added:

“Sales professionals in Infor’s large manufacturing customer base need fast and easy access to the critical product and order data in our applications, and we will render that rich data in Salesforce so it will look like it is part of Salesforce. This partnership will help customers focus on building and selling great products instead of configuring databases, middleware, BI tools, or disk drives. Our customers need to automate processes in hours and days, not months and years, and skip the classic 3-by-3 ERP project -- 3 years, 300 million, and 3 CIOs.They need results faster. ”

This is a sound analysis of the needs in the market, reckons Carter Lusher, chief analyst at research firm Ovum:

“It illustrates the importance of social enterprise capabilities for all types of enterprise applications and that speed is critical for vendors to demonstrate commitment to social. It also shows that social enterprise-enabled applications finds data stored in traditional on-premise ERP applications as a critical resource. It shows that vendors like Infor can develop a technology road map that embraces both traditional - some would say legacy - style on-premise software with a Cloud-based style and a data bridge that marries the two styles. This is a welcomed development for enterprise and public sector IT executives who are trying to leverage social enterprise and Cloud today while transitioning to the next generation of their IT strategy. ”

Also up on the Dreamforce stage was the newcomer to the game, but a newcomer backed by industry veterans. Kenandy is a Cloud ERP for manufacturing firm - or rather, Social Manufacturing - , built on Force.com and headed up by Sandra Kurtzig - whose company ASK Computer Systems dominated the Manufacturing Resource Planning market in the 1980s/early 1990s - and Ray Lane, currently chairman of Hewlett Packard, lead partner at venture capitalist firm Kleiner Perkins and former President of Oracle.

(With Phillips preceding him and Benioff himself a former Oracle executive, Day 2 of Dreamforce was rapidly turning into an Oracle alumni reunion!)

Kenandy came about after Benioff met Kurtzig, who had retired after selling ASK to Computer Associates in the 1990s, in Hawaii where both have homes. Kurtzig explained:

“All the rumours are true. Marc is a visionary. I said to him that manufacturing had changed. Companies used to make things in a box, but now it's totally vertically integrated. There is a paradigm change in the Cloud, so who's going to do manufacturing? Marc said, ‘You are,’ and I’m paying for it. ”

Lane argues that there is a pressing need for new entrants to the ERP market:

“For a long time ERP systems have been built and sold on client server. They have been taking care of financial systems for sales forces or the supply chain, but supplier management in the Cloud has not been addressed. Now companies have a solution that they can go from evaluation to implementation within two weeks. ”

He argues that Cloud is the ideal delivery platform for manufacturing:

“If you think about how a manufacturer actually works, they have to be constantly in touch with their suppliers and their distributors. The perfect world is that they bring in what they need as inventory just in time to manufacture and sell product. Now imagine with a large company just how complex that is. This is really the world's largest social network. in the manufacturing world, this is a huge social network that happens to be between people doing business with one another. Why would you use client server to do that? Why would we use a desktop computer when we can simply use an application in the Cloud that allows us to do work on a one-to-one relationship or across our social network. ”

Kurtzig adds:

“We are really simplifying manufacturing. This levels the playing field for small, medium and large companies. All sizes of companies have the same requirements across the board. The Cloud allows companies of all sizes to get up and running without hardware or software or relational database managers. They can up and running with all the functionality that a big company has within two weeks. The whole socialisation of manufacturing is really giving the supply chain opportunity from end to end so that customers can talk to their suppliers and suppliers to their trading partners. The communication in the Cloud gives everyone a level playing field. ”

Lane concludes by insisting that the social enterprise concepts espoused by Salesforce.com are highly suited to big business:

“Over the last few years words like social and Cloud have carried a kind of buzzword meaning. Social and Cloud are meaningful business concepts, not just for Facebook or Twitter. ”

So Dreamforce ended with two new Cloud ERP players in town and with some Salesforce.com skin in the game. Add to that an expanded relationship with HCM Cloud firm Workday and the ongoing stake in accounting firm FinancialForce and you have all the signs of an 'expansionist by proxy' strategy that is slowly but surely tightening Salesforce.com's grip on other functional areas without diverting from Benioff's proverbial knitting.

Or as Ovum's Lusher put it:

“It demonstrates that Salesforce.com is growing its stature as a market leader by being a platform company used by multi-billion dollar enterprise applications vendors. ”

Dreamforce: Salesforce.com knits its way into Cloud ERP

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