Is Salesforce.com the New AOL? (Part 1 of…?)

I was talking with our CEO John Roberts the other day and he brought up an interesting point/observation…that Salesforce.com has a lot of similarities to AOL. I have thought about it, and I think John has something here…

Both companies saw very rapid growth. Both companies were innovators when it came to the internet: AOL brought the internet to millions of homes, Salesforce.com brought CRM to the internet. AOL had Steve Case leading its charge, who I see as a kind of a champion of the internet age. Salesforce has Benioff – who I also see as outspoken when it comes to the web. Both companies gained momentum with a subscription model, and led the way for the concept to apply to not just online applications but all kinds of software. Oh, and both companies spent millions on marketing their online products with physical collateral – AOL sent a bazillion CDs (the best snail mail spammer of the 90s) while Salesforce sent out enough chocolate to give everyone in China a cavity.

But the one area where AOL and Salesforce.com are the most alike is the fact that both represent one thing: Lack of Customer Choice.

AOL was the original internet walled garden – you had to work within its user interface, only talk to other AOL members, use its IM client, and of course search the web only with AOL-sanctioned browsers, etc. Customers has little choice in the matter, or freedom once inside the garden.

Salesforce.com is no different, even if it preaches otherwise. Salesforce.com’s multi-tenant model offers very little choice in terms of changing the core product – the model is too monolithic to allow changes, or even to allow users to take their CRM system on site and off Salesforce’s servers. And if you do want some integrations or customizations, you are forced to use the proprietary tools Salesforce.com has created, and charges a pretty penny to use.

AOL never really hid its lock-in strategy. It seemed to me at he time that Case felt he was smarter than the world, and acted with abandon to lock people in to the AOL platform. Salesforce.com at least tries to play an “open ecosystem” game, citing numerous partners and AppExchange offerings. But we have seen that the partner program is really yet another form of lock-in for Salesforce – partners themselves are railroaded into using the Apex platform or else they are driven out of the program.

So, yeah, I agree with John that Salesforce.com has a lot of similarities to AOL. I am gonna think deeper on this, and blog some more in the near future about what these similarities can and might mean for Salesforce.com’s future…

One thought on “Is Salesforce.com the New AOL? (Part 1 of…?)

  1. Really interesting points Martin and I look forward to your future thoughts. Personally, I hope they keep going down this road as it gives the rest of us the chance to rescue more customers from the cult-like grip of SFDC…(there’s a bit of Aussie humor here too so don’t take that comment too seriously)

    We’ve had a number of customers talk to us about where things are going in the Open Source and SaaS space, and the thing we keep hearing is simplicity and flexibility. My gut feel is that SFDC are beginning to fail on both counts.

    But if we look at the analogy put forward by John, would we therefore say the same thing about Google?

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