INSIGHTS
Salesforce and the Service Cloud

Last week Salesforce.com (NYSE: CRM) introduced its new support concept dubbed "The Service Cloud." I have to say it makes a lot of sense both as a product direction and as a business decision.

The announcement is in line with many of the business initiatives that the company has made over the last decade in that it is a leapfrog event. The service and support niche is pretty well populated with traditional companies that deliver major league call centers as well as smaller companies that provide most call center functionality over the Web, and some that do both. Whatever the case --but especially at the enterprise level -- introducing another vanilla call center solution would not have generated the excitement or revenue that Salesforce needs.

You could say with a lot of justification that the call center market is mature. However, this is not to say that it is in decline or that there is no real money to be made there any longer. Maturity in this circumstance simply means that adding another vendor would be like bringing coals to Newcastle. The major vendors have the territory pretty well carved up and what they don't want forms the basis of a very nice market in the under 200-seat, on-demand space. So what was Salesforce to do?

A Network Paradigm

I believe the word is "innovate," and how better to innovate than by bringing together several of the technologies that the company is so enamored with at the moment. I am, of course, speaking about social networking.

The conventional call center market is based on a hierarchical premise: People need and want to talk to the vendor, and to a degree this is true. We want to speak with a live person when we have an in-depth problem that cannot be solved through manipulating the options in a Web site or when there is confidential information to be exchanged. But there are a lot of times when a hierarchical solution is inappropriate, and a networked solution can deliver the goods.

The Service Cloud that Salesforce introduced last week is innovative precisely because it leverages a network paradigm for service. A network has more elements or people with the right expertise to help someone solve a problem, and more elements can handle more issues and hence reduce waiting or accelerate learning. Take your pick.

Of course, you have to be careful that the network paradigm that you are leveraging offers real solutions and not simply crowd wisdom, which can be wrong because it is often nothing more than an accumulation of opinion, which rolls up both good information and things that are just wrong. The best comic example of this in my view is Monty Python's medieval skit that determines whether or not a woman is a witch.

The new paradigm leverages written contributions from people who are expert in the solution to a specific problem. In principal, nothing is new here. Various support vendors like RightNow (Nasdaq: RNOW), Parature and Lithium can proudly point to their knowledge bases and search technologies. What makes Salesforce's approach different is that it also incorporated its new Sites technology and its integration with social networking products such as Facebook.

The benefit is that rather than having a solution stay in a single knowledge base, it is syndicated through a social Web, and, at least in the demo, the knowledge can find its way to disparate places, including vendor and partner sites as well as topic sites and the ubiquitous search engine sphere where it might become immortalized.

What's In a Name?

All this is good, but my one quibble might be in the naming. By using "service" rather than "support," I think something is implied that doesn't exist but could come along at some point. My idea of service is customer service, and it encompasses more than answers to how-to questions; it provides the customer with things that only the vendor can supply. Customer service is dealing with account balances or warranty issues and the like. The network paradigm is ideal for people helping people to get the most out of their investment in a product or service and is properly considered support.

In my mind, the Service Cloud is an automated support group; it is a loose form of community in that it focuses on a kind of feedback. I suspect that smart vendors will also be able to use the Service Cloud for discovery, too. Just hook up an analytics engine and note the type, quantity and quality of issues that customers encounter, and you will have some very valuable and unique input to your product development efforts.

So as a business decision, Salesforce has proven its service and support chops in a unique way, and this will help it elbow its way further into that market. As a product, it is a great idea both because it leverages social media and the company's platform technology. As a strategy, it further opens up a new business process channel that is self-reliant (and therefore resilient) and low-cost -- all things we can especially use right now.