Salesforce.com pushes AppExchange for partners

Salesforce.com has no plans to emulate Microsoft's use of partners to host CRM offerings, a company executive said.

Salesforce.com has no plans to follow in Microsoft's footsteps and allow partner companies to host its CRM (customer relationship management) service, a Salesforce.com executive said this week.

Instead, Salesforce.com plans to continue with its model of hosting the service itself and letting partners enhance the service by providing add-on technology through its upcoming AppExchange network, said Tien Tzuo, senior vice president of product marketing for the hosted CRM company.

Tzuo said his company is not interested in a business model that requires partners to provide the back-end infrastructure for Salesforce.com's service. Microsoft is allowing partners to do so only because the company does not have a hosted CRM offering of its own and needs partners to drum up business for them, he said. "We don't see any reason we should force our partners to host our service," Tzuo said.

Instead, Salesforce.com hopes to give partners a new business opportunity around its subscription-based CRM service through AppExchange, a new component of Salesforce.com's forthcoming Winter '06 edition, he said. Winter '06 is expected to be available in January 2006.

AppExchange allows independent software vendors to offer their wares as tightly integrated Salesforce.com add-ons. Tzuo said that in the initial release of AppExchange, there will be about 70 applications -- a mix of Salesforce.com and third-party technology -- that can be integrated with Salesforce.com.

Last week Microsoft released the latest version of its CRM software, Dynamics CRM 3.0, along with a new, low-cost pricing option so partners can rent Microsoft CRM licenses to customers and host the application for them. Microsoft does not plan to have its own hosted CRM service available until the next Dynamics CRM update, which will be released no sooner than 2007. The company has allowed partners to host its CRM software for some time, but it lowered the price with its CRM 3.0 release in an effort to compete with Salesforce.com and other hosted CRM companies.

Also new in Salesforce.com's Winter '06 edition will be the Salesforce Sandbox, a service that enables customers to replicate their existing Salesforce.com deployments to create a test environment for trying out new customized service enhancements and developing add-on applications. The San Francisco company announced that service Monday.

Salesforce.com hopes the Sandbox offering will encourage customers to give AppExchange network offerings a test run, Tzuo said.

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