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One of the many mistakes that was made by CRM firm Siebel Systems was its inability – or possibly its unwillingness - to re-invent itself. Look back to the formative years of the CRM market [2] as we know it today and Siebel is a force to reckoned with, the fastest growing software firm in the industry and on track to be a major powerhouse for decades to come. Or so it seemed.

In fact, Siebel as a company was built on one idea. It's a great idea, a damn fine idea that addressed a major issue for customers on a genuinely global scale. But it was still only the one idea. When Siebel dabbled in other areas – ERM anyone? - it failed to follow through with the conviction and the clout that it had put behind its base CRM offering.

It even dabbled in what we now call Software as a Service (SaaS) at around the same time as the like of Salesforce.com was getting off the ground. But Siebel gave up quickly on its Sales.com effort, clearing the way for Salesforce.com rise to become a $1 billion powerhouse of its own. Siebel meanwhile was added to Larry Ellison's treasure chest of 'nice but neglected' shiny things where its products have been suitably buffed up and are doing rather nicely for themselves.

Siebel's lack of expanded horizons and corporate re-invention is not a mistake that Ellison would make. Oracle [3] got its big break from the King Canute-like efforts of John Cullinane, CEO of hierarchical database firm Cullinet, to turn back the relational tide.  Ellison took advantage of this and offered customers a relational alternative just as the client server revolution was getting underway.

Since then, he's taken the company into all sorts of new directions, such as applications and consulting services. Some may have been less successful than others – don't ask what happened to the “fully object oriented” Oracle database that was promised in the mid 1990s, for example! - but the underlying drive of Oracle is to be a company that never stops re-defining itself and in the process the wider market.

Executioner at the ready

So what can Cloud Computing vendors learn from all this? Keep moving. Keep changing. Keep re-drawing the lines. The Madonna factor, in fact. Salesforce.com [4] keeps doing this, although it remains committed to sticking to the knitting in terms of its core product areas. It does sales force automation and customer service. It won't be moving into HR applications or accounting packages. But it does keep re-shaping what else it can do. It's a Platform as a Service firm. It's going to offer Knowledge as a Service [5]. It's now delivering Service as a Service! OK, some of this can be critiqued as marketing and PR sophistication and enhancement, but the vibe is of a company that is evolving and changing and growing, anticipating and defining new customer requirements and meeting them.

Over at SuccessFactors [6], there's an even more spectacular example of this re-invention in practice. SuccessFactors has done very nicely for itself by being a Cloud-based provider of Performance Management offerings with a focus on human capital and talent management. It's a good business sector to be in – every organisation needs to be able to manage and optimise its employees! - and the firm has chalked some gold standard customer references, including of course the world's biggest SaaS deployment at Siemens [7].  There should, you might think, be plenty to keep the firm occupied for quite some time to come.

But as the baleful shadow of Siebel hangs over the CRM market and the ghostly presence of Cullinet can still be seen in the darker corners of the database world, over the HCM market hangs the spectre of PeopleSoft.  So this week, we've seen SuccessFactors evolve into a self-styled provider of business execution software.  What does that mean? Well, at its most basic, it means that SuccessFactors is allowing customers to take its existing performance-management offerings and combine them with data residing in onsite systems or other subscription software services.

A driving need

According to The Conference Board's recent post-downturn report on the top ten CEO challenges, more than 55% of CEOs rate "excellence in execution" as their number one concern. The report found that companies fail to execute due to poorly communicated strategy, unclear accountability, inadequate performance monitoring and poorly defined goals and responsibilities.

"From years of partnering with our customers, we've seen how important it is for workers to know exactly what they need to be doing and how they should get it done, and it's amazing how often that doesn't happen," said SuccessFactors CEO Lars Dalgaard (right). (That's CEO as in Chief Execution Officer from now on by the way.)  "This gets to the heart of that problem and helps companies rapidly communicate their strategy, and align it throughout the company and execute. Traditional enterprise applications are about automating processes and transactions. Today customers need applications that help knowledge workers get stuff done.”

For example, one new service in the new Business Execution Suite (BizX) is SuccessFactors Strategy Deployment. This lets executives communicate changes in company strategy, to support employee collaboration, and let managers view both employee and operational performance metrics on dashboards, including data that's imported from other systems outside of SuccessFactors.

SuccessFactors reckons it's done its homework on this one, having comissioned a study of 500 its own customers.  This found that effective execution helped increase revenue while reducing costs by helping to create a more nimble organisation through quicker communication of strategic decisions and changes, while also focusing employees and managers on what they should be doing, This in turn increases the time spent on strategic priorities by an average of 5.5% while streamlining workflows can  increase project completion by an average of 13.8%.

In other words, let's get everyone singing from the same hymn sheet. With that achieved, ano organisations ability to focus on and meet their goals can be optimised. The SuccessFactors vision is based on the assumption that there's always room for improvement on that front with a promise of increasing overall productivity by an average of 2.8 % which in turn adds one percent more revenue to the bottom line. "When I talk to a CEO, I ask them, what percentage of their goals are they meeting. If they say 30, I can get to them 50. If they say 70, I can get them close to 90," said Paul Albright, SuccessFactors chief marketing officer. 

Success in the Cloud

A second plank of the SuccessFactors reinvention is the creation of a Business Execution Platform called SuccessCloud that will enable third parties to plug their apps into its ecosystem with the likes of IBM Lotus Connections and IBM WebSphere Portal, Google Apps, GeoLearning, SkillSoft, Conformity, SnapLogic, Cast Iron, Pervasive Software and NetSuite cited as examples of this in practice.

"The next era of enterprise software is about collaboration and shared data among many applications," said Scott McMullan, Google Apps partner lead with Google Enterprise. "Google and SuccessFactors worked together to make our joint customers more productive through the integration of Google Apps with SuccessFactors' Business Execution Software Suite. Continued momentum around open web APIs reinforces the value of the web as the underlying platform."

Overall it's a seemingly logical extension of effort by SuccessFactors, taking a set of core capabilities and applying them to a new set of challenges, expanding the potential customer footprint in the process.  What is ambitious is the declaration by chief executioner Daalgard that his firm is effecively creating a whole new category of software – and not only that, but it's the “most important new breed of enterprise software in years”.

It's a highly bold -and many would argue - contentious claim, but then the ebullient Danish executioner-in-chief is not exactly noted for his reticence or for being prone to understatements. That said, the claim is clearly far from being without merit. “Business Execution software is the next dynamic level of these types of applications that engages users and gives a company's workforce the tools to work together to execute," argues Bruce Richardson, chief research officer, AMR Research [8]. "New technologies are evolving and driving new levels of collaboration and connectivity between workers and across companies.

“At the same time, business leaders are dealing with new challenges which have forced them to more deeply assess the way their companies perform,” he added.  “There is a sea change happening where companies need and want to move beyond the traditional capabilities of CRM, HCM and financial systems, to solutions that can help manage the more complex aspects of business, such as how work gets done, how people collaborate and how companies execute against their goals and strategies.”