Are Development Communities the Next New Thing for Hosted CRM?

Salesnet is the latest hosted provider to develop a formal platform for developers and customers to exchange information, ideas and prebuilt extensions to further integrate or customize the original offering.

For Salesnet, it was an essential step, given the specific orientation of its application — that is, sales force and related CRM functionality — and the inevitable desire of customers to link it to other applications or databases, said Forrester Research analyst Liz Herbert.

"Small and medium sized businesses do not want to worry about integration . They like bundled solutions like NetSuite , or something that can be easily integrated," she said.

Other hosted vendors have embraced this route as well. With its two-year head start, Salesforce.com’s Sforce.com developer community is probably the most advanced, with well over 100 partners participating.

Beyond Integration

The benefits for customers — as well as the application providers — go beyond integration. "A lot of the solutions developed within these communities are bridging gaps in the vendors’ platforms," said Herbert.

Salesforce.com, for instance, is weak in its e-mail marketing capabilities — at least in its ability to send out mass e-mails. However, it has addressed this gap through an Sforce.com partnership, Herbert noted.

Salesnet’s partnership with Unipress, which provides Web-based help desk functionality, provides another example. "That is not a core competency of Salesnet, but they can offer it through the partnership," Herbert pointed out.

"What is unique about these hosted customizations is that any company can take the customization and turn it into a template, with little effort, for their own company’s operations," she explained.

Working with Partners

As hosted vendors continue to make inroads into the traditional software markets, such development-community initiatives will become more important. Whether they become a competitive differentiator for the vendor, though, will depend on how strong the ties are with the partner network.

For instance, Herbert said, Salesforce.com was able to gain a lot of traction with its partner network because it has been very forthcoming with its own resources. "They expose the code, they give away free copies of the solution to developers, and they have low requirements for becoming a partner," she observed.

Other vendors — Siebel OnDemand, for one — place the bar higher for their partners. In Siebel’s case, there is no comparable community for its OnDemand application, according to Herbert. "Siebel’s partners have to pay around US$10,000 a year and go through rigorous testing. There are commitments for sales if the company wants to keep its partner spot," she added.

"They don’t make it easy for developers to get their hands on the code or APIs," Herbert concluded.

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