Gartner critique unfair, says Salesforce.com

Salesforce.com has hit back at claims by market researcher Gartner that its hosted CRM offerings may not offer value for money in large corporations.

Doug Farber, chief of Salesforce.com in Australia, said Gartner had failed to consider all the factors that could affect ROI. He said Salesforce.com's offering might cost more up front, but customers would find the flexibility and support offered outweighed the initial capex over time.

Someone who chose instead to buy their own software and perform the services involved themselves would have to rip and replace their software every few years anyway -- yet that cost was not considered, he alleged.

"We actually offered to have them speak to some of our customers and they declined. They actually did this in a vacuum," Farber said. "We have 13,900 happy customers."

Gartner warned last week that Salesforce.com might not be a good buy for large corporations. More than 60 percent of large sales organisations deploying the application service provider would find their costs double in three years, the researcher claimed.

"[It offers] adequate functionality for some buyers, but not all," Gartner analyst Rob Desisto said. "It is critical for companies to know Salesforce.com's limitations and set their expectations accordingly before committing to an investment." 

The budget could blow out due to customisation and integration costs for replicating prepackaged software designed for complex organisations, Gartner said.

Beyond three years, the total cost of ownership at a sales organisation with at least 500 salespeople would exceed that of a prepackaged product, because of extra IT resources needed, the researcher said.

Yet Gartner estimated that more than 80 percent of Salesforce.com deployments had fewer than 20 users. Those organisations had been "well served" by the vendor. However, as the company tried to move up-market, more complex organisations should be aware of Salesforce.com's "limitations", the researcher said.

Gartner said Salesforce.com's strength lay in its templates for basic sales functionality, such as tracking sales accounts, contacts, leads, pipelines and forecasts, with minimal data entry.

However, Farber said 76 percent of Salesforce.com customers had already renewed subscriptions to its services. That implied they were reasonably happy with what was offered.

Gartner itself had praised Salesforce.com in many other reports, such as the Magic Quadrant. So things couldn't be all bad, Farber said.

"And in this instance, they didn't bother to follow up with customers," he said.

Farber conceded that most Salesforce.com customers in Australia were SMBs, not large corporates. Medium-size enterprises were also potential customers for Salesforce.com here.

Large companies with more than 500 salespeople, on the other hand, were thin on Australian ground so even if Gartner was correct, the report wasn't as relevant in Australia, he said.

 "Very few [companies in Australia] have the resources that the likes of Telstra, Qantas or Commonwealth Bank have," Farber added. "And you will have to upgrade every three years or so with the likes of Siebel, say, so that doubles your costs."