Salesforce.com kicks off its third annual Dreamforce user conference on Monday, capping a year in which the company has solidified its position in the CRM (customer relationship management) market and begun expanding its technology into a broader hosted applications infrastructure.

Three thousand attendees are expected at the San Francisco show, three times the number Salesforce.com drew for 2003's debut Dreamforce. Salesforce.com plans to preview its forthcoming Winter '06 release and highlight customer case studies, including examples of projects based on its Multiforce platform, an architecture Salesforce.com bills as an "on-demand operating system."

The company is also scheduled to release the final version of its AJAX (Asynchronous Java and Extensible Markup Language) toolkit, aimed at helping customers easily integrate Salesforce.com's sales software with outside applications like Google Maps that are built on open standards. Never one to miss a branding opportunity, Salesforce.com dubbed the technology "Smashforce," reflecting the popularity of the term "mash-ups" to describe Web-services-enabled combinations of consumer applications and services.

More than two dozen product launches are on deck from Salesforce.com's partners, most focused on add-on functionality to extend Salesforce.com's sales and customer service management features.

Intacct is tailoring its hosted ERP (enterprise resource planning) applications to work seamlessly with Salesforce.com, including single-sign-on and a shared look-and-feel. The company's ERP On Demand for Multiforce suite includes applications for order, invoice, expense and procurement management, which can be purchased individually for US$20 per user, per month, or together for US$65 per user, per month.

Esker Software is introducing a Web-based service enabling users to initiate messages directly within Salesforce.com to be sent via physical mail, fax, e-mail or SMS (Short Message Service).

DreamFactory Software will launch its DreamTeam collaboration application, which adds project, document and group communication management functionality to Salesforce.com. Convoq's new SellASAP adds presence awareness to Salesforce.com, so users can check on online availability of their contacts and colleagues.

Sybase's iAnywhere subsidiary is launching the next version of its mobile Sales Anywhere software, adding BlackBerry support and more advanced search capabilities. Sendia will also be hawking software for mobilizing Salesforce.com, including its WorkSpace development and deployment platform.

They'll be among an expected 100 vendors exhibiting in what Salesforce.com hails as "the largest-ever on-demand computing expo."

Salesforce.com and its evangelical leader, Marc Benioff, have always been vocal proponents of the idea that hosted software will fundamentally change the market dynamics of enterprise applications. The company has been a highly visible CRM vendor for several years, but in the past one, its momentum has accelerated. Salesforce.com now claims a base of than 308,000 paying subscribers, an increase of more than 100,000 since its last Dreamforce show. It's on track this year to generate around US$300 million in revenue during its fiscal year (which ends in January), and hardly a month passes without the company announcing another 1,000-seat licensing deal. Last week, manufacturer Air Products & Chemicals Inc. signed on for an enterprise-wide deployment.

While most of its deals are still struck with smaller companies licensing for less than two dozen users, Salesforce.com's rise brings it into the enterprise market that once belonged primarily to Siebel Systems, Oracle, SAP AG and their rivals. Its sales volume has forced a response from companies that used to dismiss the hosted market as a niche one. Siebel is still struggling to grow its OnDemand service (it finished its last quarter with just under 40,000 subscribers), while SAP and even Microsoft have begun dropping vague comments about developing hosted software strategies.

Following Benioff's opening keynote at Dreamforce on Monday, Salesforce.com's executives are scheduled to meet with financial and industry analysts. Expect to see more reports coming from that meeting like this one, issued this week by SG Cowen & Co.'s analyst Peter Goldmacher and Jim Bao: "We have a bullish outlook on Salesforce.com. ... We expect ongoing traction in the midmarket, amplified by significant momentum at the high end of the market." They forecast Salesforce.com will top 400,000 subscribers by January.