CASE STUDY #1 Salesforce.com: Taking CRM to the CloudAs the leading CRM software vendor, Salesforce.com is also the pioneering company that launched cloud-based software as a service (SaaS) for enterprise-level applications. Founded in 1999, the company boasts double-digit annual growth, with sales topping $6 billion by 2016. In the early years, how-ever, Salesforce had a difficult time convincing other companies that a cloud-based solution for CRM would work or that their sensitive data would be secure.Larger enterprises, in particular, were reluctant to move such data off their privately managed servers housed in their own data centers. But Salesforce persisted, offering a pay-as-you-go subscription pricing model that allowed companies to identify a small number of users to try out the service. The advanced CRM features that Salesforce offered were often well beyond what the companys own CRM software could do, particularly on mobile devices. Salespeople are on the road quite a bit, and having the ability to manage their leads, tasks, customer communications, and other data important for CRM from anywhere at any time quickly became a must have. The companys approach essentially propelled the era of enterprise-level cloud computing. Analysts project that 50% of organizations will select SaaS for complex business process support by 2018 as they wind down their private data centers and move applications to the cloud.Salesforce.com has a growing number of competitors, however, and focuses heavily on continuous innovation for its products. For example, the company added the Wave Analytics app to its services so that business users can analyze data in real time and take action from within the app. To encourage innovative thinking, Salesforce.com draws on the ideas of its millions of customers who contribute their thoughts to the IdeaExchange. Other customers can vote on the ideas by clicking thumbs up or down, and those with high vote totals are reviewed by Salesforce staff who decide whether to include the feature in an upcom-ing release. The IdeaExchange shows the fate of each idea so contribu-tors can see the outcome.The relentless drive to innovate led company executives to recon-sider office space design. Salesforce.com CEO Mark Benioff brought in Buddhist monks to give their thoughts on how to configure the companys skyscraper headquarters in San Francisco. The monks observed that the employees were talking all the time and working constantly and sug-gested that space should be provided for more contemplation. Benioff added mindfulness areas on each floor so that employees would have a quiet place to think and reflect.Despite very rapid growth, Salesforce.com faces a number of chal-lenges. One involves the need to constantly upgrade its services and technology. For example, it relies on Oracle databases, but the company is considering moving to an open source database solution to reduce costs. It also must ensure that its own platform is constantly available for customers. A major outage in 2016 left customers very frustrated, and 5 hours worth of data updates were lost.Perhaps the most important challenge for Salesforce.com is main-taining security, especially because the datas sensitivity is quite high. Concerns about security have always been uppermost in customers minds, and Salesforce.com continually bolsters the systems used to monitor traffic and access. Its Salesforce Shield, for instance, allows IT administrators to see user activity in real time.To grow, Salesforce.com spends a large chunk of its revenue on sales and marketing and also technology to improve and expand product offerings. While revenue is growing, the company often posts losses with expenses exceeding income. But with growing adoption of SaaS and cloud computing in general, Salesforce.com should have a promising future

.Discussion Questions

5-15. Identify one way that in the early years Salesforce.com addressed market confidence in its cloud-based systems. Was this way successful? Why or why not?

5-16. How does Salesforce.com use the IdeaExchange for competi-tive advantage? What benefits does it provide to the company and its customers?

5-17. Explain how office space design in the San Francisco head-quarters was changed and why this change is expected to return value to Salesforce.com.

5-18. Identify at least two challenges that Salesforce.com faces and explain why these are important challenges to Salesforce.com.