Salesforce on the offensive with On-premise Partnership

Salesforce.com and VMware announced a joint “exciting” announcement on April 27th. Register on www.vmforce.com. Scope of the announcement – “…make an exciting joint product announcement on the future of cloud computing”. It’s not that hard to undercover what is going to be announced.

For many years Salesforce offered an on-premise version their software for very large enterprises. But for many reasons problems and management of this version was a pain for Salesforce, as such the decision was to cancel the programme. Since Microsoft came up with their “Power of choice” model for Microsoft Dynamics CRM – Salesforce has been trying to convince us that there is not any cloud or hosted model in Microsoft Dynamics CRM. “Salesforce is the cloud application”.

Is must be a very odd situation for Salesforce to include a relationship for VMware to add on-premise capabilities. One could argue that the business model of Salesforce is under disruption or simply; they reached their maximum market. No matter what; Microsoft did come with the right model, and even Salesforce have to add on-premise to their business model. They could not themselves so they turned to VMware – who recently also acquired OpenExchange; a high competitor to Microsoft Exchange. Although a relationship with VMware could deliver the “Power of choice”; the solution will be offered, yet not complete. As one would say; “Would you run Microsoft Dynamics CRM through Terminal Services as a Cloud Service”? The obvious answer is NO.

Strangely enough the market is lacking support for all Microsoft technologies. It is a very disruptive market, although it only seems to be Google owning a different strategy and challenging Microsoft. Many of the key competitor’s like Salesforce and VMware have to acquire or copy the business models of Microsoft. Sad as this turns Microsoft to do the same; just recently announced their official name for the “PINK” project, Microsoft Kin!

Let’s see what is going to be announced on the 27th 😉

Applications in the future will be connected as services

Software-as-a-service has been commodity for a long period. Microsoft among other vendors is now forming relations and strategies on how applications will act and perform in the near future. For a long period Microsoft has been pushing ISV developers to develop and implement their applications as SmartClient applications. SmartClient applications are actually just small content-frame-holder (as known from the web world), with different services connected to it.

The enablement of this “mashup” is a great and very new approach to an application. A big change to the business model of this is the actual change in the price of an application. Many developers and ISVs have been purchasing components and resource libraries to “bundle” and use in their applications. These components are sold though redistribution agreements and customer license for usage – and not the source code.

In the future world, this will exactly be the same model, just with services connected to the application. Billing and support will change rapidly offering per-usage billing, not the complete price. So in the future you can actually earn money – when you don’t format you documents in Word 😉

Another good example is the connected and business benefits of the model. Using Microsoft Dynamics CRM 4.0 within a hosted model, several add-ons exists in the “could”. Among these, that Business Card reader webservice, which converts your image-business cards into readable contact information – directly imported to Microsoft Dynamics CRM 4.0 in the cloud. As you probably only want oné invoice, only need one support line, several considerations form around the model. But the general idea is now a reality.

Microsoft has released the Buffy Finder concept as an example, and launched Microsoft CSF Sandbox – a new version of the UDDI registry.

Update – 24.04.2008!

Microsoft Clearflow is another really good example on joining Microsoft Virtual Earth, Microsofts new traffic service and mobiltiy into one complete solution!