A New Model for Partner Success in the Cloud

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1 A Whitepaper for Channel Executives A New Model for Partner Success in the Cloud How Saleforce.com Is Teaming With VARs and Consulting Firms to Deliver Next Generation Business Solutions An Independent Analysis Published on Behalf of salesforce.com.

2 Executive Overview The software industry is facing fundamental challenges as a result of a combination of macro-market trends which are driving organizations of all sizes, across nearly every industry, to re-examine how they acquire and utilize enterprise applications and other computing resources. These trends are also redefining the role of consulting companies and value-added resellers (VARs) in the development and delivery of software solutions. Organizations are increasingly recognizing that the inefficiencies of traditional, on-premise software can no longer be tolerated in today s tough economic climate and competitive environment. As a result, THINKstrategies research has found a growing number of organizations are adopting a new generation of web-based, cloud computing alternatives including Software-as-a-Service (SaaS) and Platform-as-a-Service (PaaS). These cloud -based services combine the ubiquity of the Internet with the ease of use of consumer-oriented, online services to deliver more effective enterprise applications and platforms. Because many of these cloud computing services are delivered directly to customers at a fraction of the cost of legacy applications, some industry observers have mistakenly suggested that the rapidly evolving cloud computing industry will disintermediate the business opportunities for consulting firms. While there is no question that cloud computing represents a disruptive force, THINKstrategies believes they also create exciting new market opportunities for forwardminded VARs and consulting firms which can improve their position in the market long-term. Cloud computing enables VARs and consulting firms to establish ongoing relationships with their customers rather than depend on periodic projects or occasional technology procurements. However, the key to success is teaming with the right cloud computing vendor who is recognized as a market leader, has a proven platform that can be customized to meet the specific needs of individual organizations, understands their partners business requirements and offers innovative programs that can help them achieve their objectives. This whitepaper shows how salesforce.com is working with its partners to capitalize on the growing opportunities in the SaaS and cloud computing market. We will look at how four salesforce.com partners American Data Company, Appirio, Bluewolf and Model Metrics are responding to these opportunities and becoming models for success in this exciting new marketplace. Changing Business Needs Driving New Partner Requirements Continuing economic uncertainty, escalating competition and changing workplace requirements are driving corporate executives and end-users to seek more flexible and costeffective alternatives to traditional, on-premise applications and computing systems. They are no longer willing to tolerate highly customized, complex and cumbersome applications that demand significant upfront capital investments and long deployment cycles only to produce limited results. They need a quicker time to value and greater agility to respond to fluctuating business requirements. Legacy on-premise, enterprise applications are also not designed to satisfy the requirements of today s more mobile and dispersed workplace. Instead, they were architected to sit behind a firewall and configured to be extremely difficult for end-users to access remotely. Legacy applications also require exorbitant maintenance costs just to keep the applications up and running. These inefficiencies are not acceptable in these tough economic times. Instead, organizations must generate a greater return on investment (ROI) from their software applications at a lower total cost of ownership (TCO) to be successful. Tightening operating THINKstrategies, Inc., p.2

3 budgets are also forcing organizations to reconsider how they utilize third-parties to help them implement, integrate and manage their applications to meet their corporate objectives. For years, VARs and consulting firms have depended on the complexities of developing and deploying enterprise applications as the key driver for their services. They relied on largescale, long-term projects to build their businesses and customer relationships. While they were able to develop deep domain-expertise, they often failed to gain the full trust of their customers because of the ongoing costs of their engagements and limited returns. The failure to deliver clear business benefits, coupled with the escalating costs of delivering their services, has opened the door for enterprise decision-makers and their end-users to seek more cost-effective alternatives. The initial success of SaaS solutions has extended to include PaaS, and the growth in opportunities associated with cloud computing as a whole has fueled the emergence of a new generation of consultancies and VARs. These new firms are capitalizing on the ease of use of cloud-based solutions and the costefficiencies of cloud computing to deliver solutions to their customers more quickly and economically. As a result, they are rapidly earning their customers trust and gaining a competitive advantage in the market. VARs and consulting firms must take a series of steps to meet these customer and competitive challenges. They can no longer dispatch an army of consultants or developers to build highly-customized applications which take 1-2 years to rollout, and depend on the complexities of their solutions to generate an ongoing series of follow-on projects. Instead, they must redesign their go-to-market strategies and service delivery methodologies to better satisfy their customers needs in an increasingly competitive environment. First, they must retrain their staff to ensure they have the right skills to utilize the latest weboriented development languages and tools. Second, they must approach each engagement with an eye toward building repeatable solutions which can satisfy a broader array of customer needs. Third, they must focus on demonstrating the business value of their solutions rather than their technical capabilities. Finally, they should capitalize on the direct and ongoing connection cloud computing provides between the customer and solution provider which gives the provider greater visibility and insight into the customer s evolving needs. Enterprise cloud computing development resources enable VARs and consulting firms to deliver more cost-effective solutions, more quickly. They also enable providers to be more agile and build stronger relationships with their customers by permitting them to gain greater insight into how customers are actually utilizing their solutions. This added visibility can help service providers drive greater customer satisfaction and anticipate their customers future requirements. Table 1 summarizes the changing requirements for success. Table 1 Changing VAR/Consulting Models for Success Old Model Complex, Technically-Oriented Individualized Long Duration Standalone Projects High Delivery Costs/Risks Uncertain Value Limited Visibility New Model Simple, Business-Oriented Repeatable Rapid Deployment Ongoing Interaction Cost-Efficient/Predictable Solutions Measurable Business Benefits Intimate Understanding THINKstrategies, Inc., p.3

4 Salesforce.com s New Approach to Partner Success In order to capitalize on the growing opportunities in the SaaS and enterprise cloud computing market, VARs and consulting firms must partner with the right vendors who understand their business requirements. Salesforce.com s Force.com VAR Program is built on the proven best practices of its vast partner community, along with the powerful development capabilities of the Force.com cloud computing platform. The combination of these resources enables Salesforce.com s partners to deliver customer solutions that result in: 1. Faster time to value 2. No up-front capital expense 3. Reduced operational costs 4. Fewer technical resources 5. Simpler integration These same attributes can be viewed as attractive competitive advantages for Salesforce.com s partners. At a time when organizations want quicker results with lower risks, Salesforce.com Consulting Partners can employ cloud computing tools and best practices to more easily and economically develop and deliver solutions which meet their customers escalating business requirements. The goal of the Force.com VAR Program is to help partners build a profitable cloudcomputing business. There is no fee to join the program. It permits partners to sell Force.com user licenses directly to their customers as part of an overall customer solution. And, because Force.com is a subscription-based solution, the partner gains the advantage of a predictable, recurring revenue stream from its customer engagements. Members of the Force.com VAR program can take advantage of a wide range of technical tools, training, and marketing resources to ensure their success: The company s Sales Resource Center includes a Force.com sales kit, competitive information, industry data, online demos and customer references/case studies. The Consultant Resource Center includes a set of implementation resources, industry best practice materials, community discussion boards, and design guidelines and templates. Its Partner University offers rolebased, online courses and a Force.com certification program. Partners can also market and resell Force.com platform products. Salesforce.com provides first-line support for all Force.com platform licenses sold by the partner. There are no volume commits or up-front fees required and partners own all customer renewals. With these pieces in place, Salesforce.com is building a VAR program which addresses its partners training, marketing, sales and support requirements so they can successfully sell and deliver cloud-based solutions to their customers. New Partnering Opportunities in Enterprise Cloud Computing Salesforce.com continues to evolve it partner programs to align with changes in cloudcomputing and to support the ongoing success of its partners, In fact, salesforce.com looked to the real-life experiences of its partners to help guide the creation of the Force.com VAR program. The following companies are just a few clear case study examples of how partners are taking advantage of new opportunities offered when teaming with salesforce.com and leveraging the capabilities of the Force.com platform. THINKstrategies, Inc., p.4

5 American Data Company American Data Company is a business process and technology consulting firm specializing in cloud computing. The company helps clients, from mid-market to enterprise, achieve their goals by applying best of breed cloud technologies to realize greater results.like many consulting companies, American Data Company has established partnerships with leading technology vendors to ensure it offers the best solution to meet client needs. A client introduced the company to salesforce.com, and the Force.com platform. As soon as I saw salesforce.com, I realized we could spend a lot less time deploying infrastructure, says Josh Holtzman, American Data Company s founder and CEO. Before discovering the powerful capabilities and benefits of salesforce.com and the Force.com platform, American Data Company relied on on-premise technologies to respond to its clients CRM and application development needs. In the early days it used to take us days or weeks to provision and install solutions for our clients. Given the high cost and resource requirements necessary to maintain and scale these traditional systems, we decided it was a wiser investment to leverage Salesforce CRM and the Force.com platform. This decision has enabled us to spend more time focusing on our clients business needs, providing them more value from each consulting engagement, according to Holtzman. Force.com changes everything. It lets us focus on solving business challenges, not keeping the lights on. With Force.com, we can add value where it really counts, says Holtzman. With this approach, American Data Company helps clients reach their goals by developing customized enterprise cloud-computing solutions on Force.com that match their business processes. Its growing list of clients includes ebay, Farmers Insurance, and Thomson Reuters. It is one of the fastest growing cloud-computing consulting and technology firms, and has offices in Los Angeles, Toronto, and Salt Lake City. Appirio Appirio is a professional services firm which helps enterprises accelerate their adoption of cloud computing solutions. In order to meet the needs of its rapidly growing customer base, Appirio leverages Force.com, Google Apps, Facebook and Amazon Web Services. Chris Barbin, Appirio s CEO, first realized the power of cloud computing during an Appirio implementation of Salesforce CRM Service at Borland. When I saw first hand how salesforce.com could impact IT and the business, I knew there was an opportunity to do what I began at Borland, for an entire industry according to Barbin. We knew once salesforce.com figured out how to extend the capabilities we used with service and support and apply it across the enterprise as a platform, the opportunities for our business would just explode. Appirio not only helps customers capitalize on salesforce.com and Google s SaaS solutions, but it runs its own business in the cloud. Barbin says, We were adamant about starting a new kind of business, We don t own a single server in our company, only laptops on which we access Google Apps and Salesforce. We have grown from 3 to over 150 people with no change in infrastructure because there is no infrastructure. The agility and scalability of cloud computing has enabled Appirio to serve over 2500 customers since its founding in 2006, including Avago, CRC Health, Dolby, Hamilton Beach, Japan Post Network, Ltd, Pfizer and Qualcomm. THINKstrategies, Inc., p.5

6 For instance, Appirio is working closely with salesforce.com to lead the Force.com platform implementation at Japan Post Network Co., Ltd. Japan Post Network Co., Ltd. offers postal, banking and life insurance services and is the largest employer in Japan, serving over 50 million individual customers and employing over 100,000 people. It is also the largest Force.com cloud computing platform implementation in the world. Despite being a relatively small player in the consulting industry, Barbin asserts, We re playing in the big leagues. And because the Salesforce infrastructure is our infrastructure, we boast the same market leading security and reliability they do. This gives us the credibility required to stand in a room with the largest companies in the world and win their business. Even better because our operations run on the platform we know we can scale to people organization. Bluewolf Bluewolf was formed in 2000, at a time when many established consulting companies were failing due to the end of the dot.com bubble. Founders Eric Berridge and Michael Kirven believed there was an opportunity to build a more effective consulting model focused entirely on SaaS and centered their business on salesforce.com and cloud computing services. Bluewolf's consulting practice has evolved over the years from helping salesforce.com customers automate traditional CRM functions, to delivering solutions across the entire customer life cycle. Unlike traditional consulting firms following the old waterfall consulting model, which depends on a series of major projects to build a continuous revenue stream, Bluewolf s Agile approach is built on smaller, iterative engagements that generate measureable results for on-going success. Corinne Sklar, vice president of marketing at Bluewolf says, We use new technologies and a different, Agile approach to deliver customer solutions quickly and for long-term success. Our focus is working with customers to define their ideal business process, and then deliver technology that maps to a flexible process. We focus on our customer's ultimate success, with a unique methodology that accepts change. We understand that our customer's business needs to react to an ever changing business environment. Shorter, more measurable sprints, allow us to continually innovate and improve alongside our customers. Bluewolf s expertise in Cloud Computing has enabled it to move faster than what would have been possible in the world of traditional software. As a result, the firm has worked with over 2,500 clients on an on-going, iterative basis, helping customers such as Time Warner Cable, Dow Jones & Co, Beazer Homes, Orange Telecom, and Google. Bluewolf's Principle and Co-Founder Eric Berridge says, Bluewolf is in the business of building long term, successful customer relationships. We work ongoing to ensure our customers are able to continue to innovate their Marketing, Sales, and Support processes either on their own, or with our help. As salesforce.com has grown as an organization and Force.com has matured as a platform, Bluewolf has been there; and with every step we have increased our commitment to customer service and demonstrated an ability to deliver innovative, real solutions that focus on results. THINKstrategies, Inc., p.6

7 Model Metrics Model Metrics delivers mobile, ecommerce, portal, CRM call center, and custom applications and services which leverage cloud computing capabilities. The company focuses on business process, change management, and custom development. It has become particularly adept at creating custom applications featuring multimedia-rich user experiences. The company is headquartered in Chicago with offices in San Francisco, Los Angeles, New York, Detroit, Minneapolis and Dallas. It has been able to rapidly scale its application development skills by using Force.com. Adam Caplan, Model Metrics founder and CEO, reports, In the early days there wasn t much we could do other than configuration and data migration; and once that was done, we had few reasons to go back and add more value. That all changed with the release of Force.com code and the Force.com pages framework. Now, once we ve established a working partnership with a company, we can build anything for them: whether utilizing the platform to develop Web sites and portals or developing custom applications for any business process. Model Metrics CTO, John Barnes, adds, By taking advantage of Force.com, we can create applications in weeks that would have taken months with traditional development cycles. Force.com is a game changer. With the platform, everything is taken care of, including Web logic, security, and infrastructure. Our customers can directly address their core business without worrying about anything else, and that is the quickest route to success theirs and ours. The company still provides traditional CRM services, like customization and training. However, the real growth opportunities are in building custom applications with Force.com. As a result, Model Metrics has completed hundreds of engagements in both mid-sized and Fortune 1000 companies. Since its founding in 2003, Model Metrics has become one of salesforce.com s most diversified partners with a customer base which spans all industries. Its clients include enterprises such as Abbott, Allstate, Aon, Cars.com, CME Group, Honeywell, InfoUSA, MasterCard, Medtronic and Orbitz. Building a Successful Cloud Business As these case examples clearly illustrate, cloud computing represents an exciting new market opportunity for VARs and consulting companies that are willing to innovate and recognize the business benefits of leveraging cloud computing platforms, such as salesforce.com s Force.com. Rather than relegating VARs and consulting firms to the scrape-heap due to the threat of commodization, as some industry analysts and other observers have predicted, cloud computing and Salesforce.com s partner program provide numerous competitive advantages for firms willing to redefine their business and restructure their service delivery models. As each of the partners have demonstrated, embracing cloud computing can result in tremendous growth opportunities and greater opportunities to satisfy clients rapidly changing business requirements. The key to success is teaming with the right cloud computing vendors to build repeatable solutions in a cost-effective fashion. As evidenced in this whitepaper, a growing number of VARs and consulting firms are recognizing the business benefits of working with saleforce.com and taking advantage of Force.com, as are their clients. THINKstrategies, Inc., p.7

8 This independent analysis was sponsored by salesforce.com. About Salesforce.com Salesforce.com is the enterprise cloud computing company. The company's portfolio of Salesforce CRM applications has revolutionized the ways that companies collaborate and communicate with their customers across sales, marketing and service. The company's Force.com Platform enables customers, partners and developers to quickly build powerful business applications to run every part of the enterprise in the cloud. Based on salesforce.com 's real-time, multi-tenant architecture, Salesforce CRM and Force.com offer the fastest path to customer success with cloud computing. Salesforce.com manages customer information for approximately 63,200 customers including Allianz Commercial, Dell, Dow Jones Newswires, Japan Post, Kaiser Permanente, KONE, and SunTrust Banks. For more information please visit About THINKstrategies, Inc. THINKstrategies is a strategic consulting services company formed specifically to address the unprecedented business challenges facing enterprise decision-makers, solutions providers, and investors today as the technology industry shifts from a product-centric to a services-driven model. The company s mission is to help our clients re-think their corporate strategies, and refocus their limited resources to achieve their business objectives. THINKstrategies has also founded the Software-as-a-Service Showplace (www.saas-showplace.com), an easy-to-use, online directory and resource center of SaaS solutions worldwide, organized into over 80 Application, Industry, and Enabling Technology categories. The Showplace also includes information and insights regarding industry best practices. For more information regarding our unique services, visit or contact us at THINKstrategies, Inc., p.8

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