How Chatter May Win the Enterprise 2.0 Game (Maybe Even CRM)

On Wednesday February 17th I attended the event where Salesforce launched the private Beta of Chatter.  Leaving aside the fact that you need an event to launch a private Beta, it was a good opportunity to see the progress that Chatter had made since the announcement at Dreamforce 2009.  If you recall, I thought it was interesting from the platform perspective – not as an application.

During the past three months they have been solidifying both the concept and the product.  The good news? The product they launched into Beta is basically the same they introduced at their event — more refined and easier on the eye.  Having an improved user interface for the entire line does not hurt them either.  The bad news? There is still some work to do — and it is not on the product side (well, there is some work to do on the product side, but since they have no competition on what they are offering, yet, that’s not the bad, bad news).

Read on for more details on what, and why, they need to do in the next few months

I had the opportunity to talk to Salesforce executives, product management, other analysts, beta customers, and “still considering it” customers.  The event was very good to collect information and determine the feeling their customers had towards it.  By far the main concern was the price that non-Salesforce and non-Force.com users have to pay to use Chatter.  This fear of licensing is misplaced, as I understand it, since non-Salesforce or Force.com users would have to pay to access the platform services anyways — and the number of users is not as large as most fear for platform access.  If you are going to use it as part of an existing Salesforce or Force.com implementation, you are already paying for the license and don’t need to pay extra.  The only really expensive case is if you develop a new Force.com application without having Salesforce or Force.com already deployed — but that is a small minority of the cases.

Bottom line is that if you are going to leverage the power of Chatter as a platform you need to pay licenses for accessing Force.com — not for every single user that will benefit from it — and then use that access to integrate to your existing or new application outside of Force.com.  The issue of the licenses is blown out of proportion as a barrier to adoption in my opinion — but Salesforce will be glad to correct me if I am wrong in this point and I will concede it is an issue then (please use the comment section to correct me so we can all benefit).

Once we get past the misunderstanding over price, the second issue was not knowing what “it can do”.  I can see that as a more significant issue in the long run, and one that will be a barrier to adoption.  While they showcased clients who are currently using it, these were the same ones I saw at Dreamforce (excellent implementations and both have matured some since then, Appirio showed their  PSA and Vetrazzo showed how they run the entire company among others).

The key to the success comes down to creativity and innovation.  If they can get interesting, and innovative, uses of Chatter in the next six-to-nine months they will have proven the value of making Chatter part of the platform and not an application. If these interesting, as in leveraging integration to external sources and to other platforms, implementations don’t materialize then they will have lost the opportunity to change the game.

The most interesting part of this discussion? Very few, if any, of their customers and beta customers were discussing Chatter as a CRM tool or Social tool.  While acknowledging the power of the social integration it provides, the demos and the “chatter” (could not help it) were hinting to Enterprise 2.0 tools and architecture areas — not a new CRM tool.  This is a critical point, as it opens up a new way to look at Chatter: a cloud component — not a CRM component.  And this is a massive differentiating factor between Chatter and other vendors’ attempts to integrate social networks: Chatter is part of the Force.com platform.

The implications of this? Chatter becomes a core architectural component of organizations that adopt it, replacing (with simple and faster programming, and more powerful integration) Microsoft Sharepoint, IBM Notes, and (I feel nice today) even Novell Groupwise.  Since you have to create applications for these platforms (and they are expensive and cumbersome) why not move those resources to Chatter and Force.com?  Yes, why not indeed.  Powerful implications.

One more thing: vendors of community and collaboration tools must not worry about chatter replacing them.  As I said in my original post, and continue to maintain, this is a very good thing for them.  Being able to leverage the platform, including Chatter and other applications it can connect to, increases dramatically the value of their tools.  They are no longer silo applications that are single function and single purpose, now they become solution providers to an entire ecosystem linked via the platform.  It actually enables these vendors to provide very powerful features — without having to worry about how since the platform will handle the connections and data-transfers.

This, to me, is the true value of Chatter — a platform that extends any other applications you want to or need to use in your organization.

Am I hyping this too much?  Is my high school-style  giddiness getting the best of my judgment? What is your point of view?

Disclaimer: I was invited to the event by Salesforce in my role as independent analyst because I have a relationship with their Analyst Relations department.  They gave me a nice lunch, I chose the vegetarian dish over the beef in case you are wondering, and yet another copy of Marc Benioff’s book (which I left behind for another fortunate soul to read since I already have a copy).  I received no compensation from them for this writing (not even validated parking in downtown San Francisco), nor are they a client (yet, they can still get wise and hire me).  Even if they were a client, my views above would not change (but their product may improve on my advice).  If you are reading this as part of your Due Diligence on Chatter, please read more opinions and don’t act just on mine.  If you do, you are solely responsible for your potential failure (but I will take the credit if you succeed).

5 thoughts on “How Chatter May Win the Enterprise 2.0 Game (Maybe Even CRM)”

  1. I remember seeing a demo of Chatter a few months ago. I think it’s definitely valuable for those that are already using SF as their CRM solution. I obviously can’t say much about it since I haven’t actually played around with it. My concern would be making sure that Chatter doesn’t turn into a time sucking internal facebook platform for the enterprise. There’s a lot going on in there. Have you had a chance to actually play with it? Are there ways to segment/filter features based on need?

    1. Jacob,

      Yes, and yes. I played with it and filters are integral to the tool. And it must be so, since it is not an application rather a piece of your platform. Without filtering it would be useless, and this is feedback that was given to Salesforce after dreamforce– and glad to see that they took it in.

      Thanks for the read!

  2. Nice post! I agree with you on the Chatter being the horizontal cloud component against yet another CRM component. This provides all the cloud benefits and can scale across applications and functions. However I disagree with “the second issue was not knowing what it can do”. The prescriptive collaboration invariably turns into proscriptive collaboration. By simply enabling it horizontally and let people use whichever way they want has great emergent potential. Twitter is an example of such emergent behavior. Social norms around business processes differ and people are smart in connecting the dots as long as there is a powerful connection framework underneath.
    .-= Chirag Mehta´s last blog ..Google Buzz Is New Black – Solving A Problem That Google Wave Could Not =-.

    1. Thanks Chirag,

      I completely agree with you that this is one of those cases we just need to see what innovation brings — it is very exciting to see the potential for new models at such an early stage. I am looking forward to see what is going to happen with it, and what (hopefully) innovative deployments they present. Alas, without innovation this is going to be a short sizzle in a very small pan.

      Thanks for the read and comment!

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