Is an App company or a Platform? has been a big part of my thinking over the past 7 years.  They were one of the first SaaS B2B companies to get super big. (12,000+ employees)  Additionally, they were one of the first B2B systems to have an app store and platform.  I am a serious admirer of what they have accomplished.

The history is interesting.  Way back in the day, Intuit Quickbase was the first system I saw that put a user interface on top of a database.  It allowed mere mortals to create interesting systems on their own without a DBA.  The problem with Quickbase is that it had no context.  It just allowed you to build what you want.  This made sales difficult. What was it?

Salesforce improved the model by building an out-of-the-box sales solution.  Originally it was called SFA (SalesForce Automation).  Then it changed names to CRM (Customer Relationship Management). It’s the same thing, but CRM costs more and is more open to extensions. (Words matter!)

With SFA, they could sell a “solution” for sales and not just a generic “system”.  (Solutions trump systems).  This started a revolution in sales tools which moved from on-premise software (Seibel, Oracle) to the cloud.  SaaS software models allow for easier upgrading and maintenance.  Salesforce took off like a rocket.

Then, and this is the interesting part, Salesforce built a massive amount of APIs (application programming interfaces) along with a special language that you could build extensions to Salesforce that ran on their servers.  It was called Apex (it’s changed names a few times over the years).

This allowed Salesforce to legitimately claim to be a platform.  Companies could build software using Apex and integrate through their cloud APIs.  This was a big deal in the software world.  The company I work for (Marketo), took advantage of this cutting edge platform and built a super deluxe integration (bi-directional sync) and software extension inside Salesforce (Sales Insight).

Our own success had alot to do with how well they created their APIs.  Having sales and marketing alignment is difficult if the two systems don’t talk to one another.  After all, Great APIs make great partners.

Ok, so here comes the rub.  Salesforce was selling their sales solution and we were selling our marketing solution.  All is well.  Then Salesforce decided to buy some marketing companies.  First Radian6 (a social listening app); then Buddy Media (a social app generator) and finally ExactTarget (Bulk Emailer).  ExactTarget had previously purchased Pardot, a marketing automation solution, so they came along for the ride too. All of the sudden, the partnership veered towards competitiveness.

Here, Salesforce was left with an interesting decision.  Should they be a platform and allow all competitors fair treatment to compete?  Or should they be an application company and shut out their partners competitors?

It’s interesting to think about how Microsoft does things since they are the world’s most powerful platform.  Do they bar Oracle or IBM or Apple from presenting at Microsoft sponsored events because they compete with them?  I actually don’t know the answer. Anyone know?

I know that Apple doesn’t de-list Microsoft PowerPoint from the iTunes app store just because they have competitive products like Keynote.  There are words like coopetition or frenemies that describes these complex relationships.

Salesforce is having their big annual summit in San Francisco this week.  It’s the first time in 7 years that I am not attending.  I love the SaaS innovative with great APIs and strong programming platform.  However, I don’t love the that feels threatened by supportive partners.

I wish Salesforce would lean more towards identifying as a cloud platform.  The world needs that. It spurs innovation in countless business sectors.  There is actually a ton they could improve to become the “Windows of the Web”.  However, if they keep leaning towards being an application company, it becomes a barrier for young startups to build on Apex.  A company needs their platform to remain stable.  If Salesforce took the high road, I believe (with very little data to base this opinion on) that they would benefit more in the long run.

With all that said, I am still left with the question.  Who do they want to be?  A competitive app company? or a SaaS platform?  It’s hard to be both.  I could go on, but I think sometimes a good question is good enough for a blog post.

Whatya think?