Dell to Buy E-Mail Service to Better Compete With Rivals; Yahoo paid $160 million to acquire Maven Networks; Nokia Dominates, but its Rivals Insist That Could Change.
Read at http://www.unitedBIT.com
Dell to Buy E-Mail Service to Better Compete With Rivals; Yahoo paid $160 million to acquire Maven Networks; Nokia Dominates, but its Rivals Insist That Could Change.
Read at http://www.unitedBIT.com
Marc Benioff has never been modest in his dreams for Salesforce.com, the business software company he founded in 1999.
Mr. Benioff, whose appetite for brash publicity and business growth matches his bulk, declared several years ago that Salesforce would be “the Microsoft of the 21st century.” Never mind that his company brought in over a year what Microsoft garners in a few days. Or that another company, Google, seems more likely to wear that label.
Salesforce promised to revolutionize the way businesses buy software, and to a large extent it has accomplished that in one market niche: customer tracking. Its innovation was in turning software into a service that is leased over the Internet, instead of something bought and installed on company computers.
And yet for Mr. Benioff, the company’s chief executive, that is not enough. He wants to turn Salesforce into a platform like Microsoft’s Windows operating system, a product so popular that it is the foundation for a veritable ecosystem of software developers.
“In our industry,” he said, “the only companies that really make it big move from being a killer app to being a platform.”
But whether he can pull off that strategic leap is unclear. Salesforce has started to look less revolutionary as larger, more established companies have adopted its leasing model. And as Mr. Benioff himself notes, few software companies successfully make the move to platform status.
Yet that jump is critical to Salesforce’s long-term success. Its share price has tripled in three years, showing that investors are counting on success beyond the market for customer-tracking software.
“It’s been very impressive what Salesforce has pulled off,” said J. Bruce Daley, editor of The Enterprise Software Observer, an industry newsletter. “But I think this is a company about to hit a wall.”
Like others, Mr. Daley declared it “logical” that Mr. Benioff would try to use its beachhead in managing customer information to establish itself as a platform, a kind of holy grail of the software world. The plan is to persuade outside programmers to do what Salesforce cannot afford to do on its own: round out the company’s offering of products so that customers can lease a greater range of business tools, like payroll and accounting software.
“But the jury is still out on whether ultimately it will be successful,” Mr. Daley said.
It does not help Mr. Benioff’s cause that the subscription model’s success has inspired software firms, including Microsoft and SAP, the German business software giant, to offer subscription-based versions of their own products for customer relations management, known as C.R.M. That means Salesforce faces increased competition in its core market at a time when it is focusing on selling itself as a platform.
And then there is the competition from smaller companies like NetSuite, which uses the same leasing model to offer a full suite of applications it has built, including billing, accounting and other critical business tools.
Peter Goldmacher, an investment analyst for Cowen & Company, is among those arguing that Mr. Benioff should — at least for the time being — throttle back his wider ambitions and stick to his primary business. Mr. Goldmacher was once among Salesforce’s most prominent Wall Street boosters, but he has tempered that enthusiasm.
“My concern is that this is a company letting itself get distracted,” Mr. Goldmacher said.
In the late 1990s, Salesforce was one of a group of start-ups exploring ways to capture a share of the lucrative business software market using the leasing model, also called “software as a service” and “on-demand computing.”
The leasing model, its supporters say, permits companies to avoid the expense and headache of installing complex software packages that typically require huge outlays of cash for hardware and software upgrades.
“It’s all about letting our customers pay attention to innovation and not infrastructure,” Mr. Benioff said. “Software as a service is about freeing them from having to hook up another computer in another data center to another database to another application server to another security server.”
In the battle for a share of business software dollars, Mr. Benioff chose to focus on customer relationship management tools, a relatively small corner of the market. Such software would help sales representatives track customers and potential customers.
“C.R.M. seemed a perfect place to start and prove our concept,” he said.
By contrast, NetSuite focused on creating an on-demand financial product that handles tasks like billing and accounting precisely because they are so central to a business.
“Our strategy has always been to be the application you run your business on,” said Zachary A. Nelson, chief executive of NetSuite. “Salesforce chose an easier route.”
Though the two companies were started within weeks of each other, Salesforce has 35,000 customers, compared with NetSuite’s 5,300. But Mr. Nelson said he sees a strength in those numbers. “The same reason companies are slow to come makes them slower to leave,” Mr. Nelson said.
In response, Mr. Benioff described NetSuite as “not worth talking about,” given its relatively small size. Instead, he was eager to discuss larger companies like Microsoft and SAP, and he said their moves to on-demand software are a testament to Salesforce’s success.
In September, Microsoft started selling Dynamics CRM Live, an on-demand version of Dynamics CRM, the shrink-wrapped software package the company has been selling for four years. At around the same time, SAP unveiled Business ByDesign, an online version of the company’s array of business software, aimed at medium-size businesses.
At a news conference to promote that product, Henning Kagermann, SAP’s chief executive, declared ByDesign “the most important announcement I’ve made in my career.” But those who follow the business software market are generally skeptical that SAP, a company whose sales staff has thrived on selling multimillion-dollar software packages, will be as aggressive offering a cheaper version of its own product line.
These same analysts, though, tend to be more bullish about Microsoft’s chances against Salesforce.
Mr. Benioff dismissed Microsoft’s offering as “an inferior product,” but analysts said that Microsoft needed only a strong offering, not a superior one.
“If you know how to use any of Microsoft’s desktop tools, you know how to use Microsoft’s C.R.M. product,” said Bruce Richardson, the vice president for research at AMR Research, a technology consulting firm. Microsoft is a minor player in the C.R.M. market, but its Office software suite is installed on hundreds of millions of computers. And the company has priced the on-demand version of its C.R.M. software to be significantly cheaper than Salesforce’s offering.
“That’s classic Microsoft: to aggressively attack from a position of weakness to gain market share,” said Mr. Goldmacher of Cowen & Company.
Mr. Goldmacher had high hopes for Salesforce when the company went public in 2004. But he has cooled on the company since then; he said that over the last 18 months, Salesforce has lost its focus.
“More and more, I see them chasing bigger opportunities that won’t necessarily pay off,” said Mr. Goldmacher, who now has a neutral rating on Salesforce’s stock.
“What they’re telling the Street is, ‘We don’t care about profitability,’” Mr. Goldmacher said. “Their story now is that C.R.M. is just the bait, and the platform the real hook.”
Despite $497 million in sales, Salesforce posted a loss of $3.6 million last year.
Mr. Benioff counters critics by noting that although the platform project is less than two years old, the company is selling more than 700 add-ons, most of them written by third parties. Salesforce, working with a pair of venture firms in Silicon Valley, has created a $25 million fund that will provide seed money to companies seeking to build applications for the Salesforce platform.
Salesforce has also entered into a series of partnerships with Google, hoping to ride whatever success that company has in social networking and office applications, a field now dominated by Microsoft.
Many of the add-ons require customers to download additional software, which waters down Mr. Benioff’s simplicity message but also could make customers more loyal.
“The more our users customize, the more they are tied to our service,” said Steve Fisher, the Salesforce executive overseeing the platform project.
Another issue is that Salesforce is mainly used by sales staff needing to keep track of leads and customer lists. To AMR’s Bruce Richardson, that is not a very large step toward empire building.
“Marc wants to be the Facebook of the enterprise, but he’s missing a key piece,” Mr. Richardson said — a core product so popular that it naturally grows into an environment that attracts hundreds of third-party software vendors.
That is where the company’s partnerships with Google might prove critical.
“Marc is waiting for Google applications to mature,” said one former Salesforce executive, who asked not to be identified. “If it can link with Google applications, then maybe Salesforce can develop into a platform.”
By BARBARA WHITAKER
One of the first things Brooke Christiansen did as college graduation neared last spring was post her résumé on three of the largest Internet job boards: Monster, CareerBuilder and HotJobs.
For the most part, she said, it was an exercise in frustration.
“You get piles and piles of jobs that no matter what you type in, come up with every single search,” she said. “It’s very hard and very time-consuming to find something you’re actually interested in.”
In addition, she said, it is rare to hear back when applying for jobs found on the sites.
Mary Riley Dikel, creator of The Riley Guide, a directory of employment and career resources on the Internet, said: “One job seeker told me, ‘I think I’d be more successful distributing my résumé by opening my window and throwing it out.’ You do feel like you’re going into a black hole.”
To that frustration, add the risk that identity thieves may steal information from résumés posted on job sites – and to estimates that only 3 percent to 5 percent of job seekers find employment through the sites – and it is reasonable to ask, Why bother?
Recruiters and career counselors typically turn the question around and ask, Why not? Applicants, they say, need to recognize that job boards are but one tool among many that can be used to find work.
“The Internet is an absolutely necessary tool in your job search arsenal, but it’s not your only tool,” Ms. Dikel said. “Use Monster and professional associations and local and state job boards and other things that target what you want. But if you’re spending more than 15 minutes on the Internet, you’re lost.”
A proliferation of new sites – many capitalizing on search engine technology to provide job offerings from across the Internet – are giving job seekers some new alternatives to explore.
Among them are JobCentral.com, a site developed for major corporations that carries their listings as well as direct links to the companies’ Web sites to apply for jobs. The
board was created after executives from corporations like I.B.M., Hewlett-Packard and Intel began exploring ways to deal with the ever-escalating fees charged by the largest job boards.
Initially, 18 companies put in $60,000 each to finance the board. Now companies pay $12,500 a year to post all their jobs, or $25 a job (compared with as much as $400 a job on a major board), said Bill Warren, executive director of the DirectEmployers Association, the corporate group behind JobCentral. It now has 182 member companies. The site also acts as a search engine, scavenging job listings from about 1,400 nonmember companies.
Taking a slightly different tack are sites like Indeed.com and SimplyHired.com, which rely on search engines to aggregate a vast array of listings from newspaper classified ads, job boards, corporate sites and trade associations.
The field will expand again tomorrow, when JobCentral, Indeed, SimplyHired and Google Base, a database recently introduced by the search engine company, are to announce that they are teaming up to create a national labor exchange at JobCentral.com. The site, which has about 340,000 jobs posted, will incorporate jobs found by its partners and provide the technology to let those sites link to its information. Mr. Warren, creator of the job site that later became Monster, said the alliance would result in the amassing of information on about 4.5 million jobs.
“The benefit to the job applicant is that they can go to one place and basically see all the jobs on the Internet,” Mr. Warren said.
How that will affect the three major job boards – and the state of finding jobs on the Internet – remains to be seen.
Mark Mehler, a co-founder of CareerXroads, a New Jersey company that advises companies on using technology in recruiting, said the traditional job boards might find themselves at a disadvantage. It has become expensive for companies to post employment ads on the major boards, and the number of résumés posted can be overwhelming.
At the same time, he said, it remains to be seen how useful and reliable the sites that pull job listings from across the Web will be.
“They key is freshness and where the job is being taken from,” he said. Despite such problems, studies indicate that an increasing number of people are being hired through Web postings and employee referrals, rather than through traditional methods like printed want ads.
In 2004, a study by CareerXroads found that 61 percent of hires by the companies surveyed came from referrals or the Internet, up from 50 percent two years earlier. According to the study findings, Monster, CareerBuilder and HotJobs accounted for 22.8 percent of the hires attributed to the Internet; corporations also reported that a high percentages of employees were hired after filing applications on corporate sites.
Eric Muller, a recruiting manager with the Southern Company, an energy company based in Atlanta, says his company initially began using JobCentral because it allowed the company to post all its jobs at a lower cost and because it provided a direct link to the company’s site. While the company still uses big boards like Monster and CareerBuilder, he said, they do so more strategically – if, for instance, a job needs to be filled immediately. “We have to have a mix,” he said. “I can’t have all my eggs in one basket.”
The same holds true for job seekers, although there are increasing questions about the wisdom of posting résumés on the Internet.
“Putting a résumé on an online job site is not the smartest way to go about getting a job,” said Pam Dixon, executive director of the World Privacy Forum, a nonprofit group that educates consumers about technology and privacy.
The forum put hundreds of résumés on job sites and tracked them for a year. Ms. Dixon said many were stolen by either criminals or unethical recruiters.
One common ruse preys on midcareer professionals whose résumé history can be combined with a Social Security number, resulting in identity theft.
“The more detailed your résumé, the easier it is to do,” Ms. Dixon said.
Job seekers who posted online said they had also had problems with employment consultants seeking to solicit business. After arranging an interview, the consultants begin making a pitch for their services, which can cost as much as $10,000.
Ultimately, Ms. Christiansen found exactly what she was looking for – a human resources job near Chicago – using JobCentral. She said the site helped her narrow her search, and after that she found a job quickly. “It can work,” she said, “if you know exactly what you’re looking for and you can find a place that will have it.”
By BOB TEDESCHI
RECRUITERS with six-figure jobs to fill know better than to post them online and start a stampede of marginally qualified job seekers. But they also know that the Web is the easiest way to find applicants.
The Web’s surprising answer to the problem? Charge them to look.
A growing number of niche sites devoted to high-end jobs are finding that applicants are willing to shell out a few dollars — or a few hundred, in some cases — for the chance to get access to job ads. The strategy will not help the big online job boards find more applicants for entry-level positions, but analysts say it is ideal for sites like TheLadders.com, ExecuNet and others seeking the senior executive crowd.
“It turns out that having the job candidates pay is a great screener, and employers love it,” said Charlene Li, an Internet analyst with Forrester Research.
Ms. Li said that the online employment category, which is dominated by Monster, CareerBuilder and Yahoo’s HotJobs, is expected to generate about $1.9 billion in revenue this year, up from about $1.6 billion last year. But she said that the category in recent years has undergone an explosion in the number of job boards that serve specific niches. (Industry executives say that there are roughly 40,000 job boards online.)
The upper-level jobs niche has been slower to develop, though, because companies typically hand off such jobs to corporate recruiting firms. Those firms, like DHR International and Korn/Ferry International, set up their own Web sites, but those sites are used mainly to market the firms’ offline services instead of connecting applicants with companies online.
To fill that void, several former HotJobs executives introduced TheLadders.com in 2003, with the mission of posting only those jobs with annual salaries of $100,000 or more. At the time, the company made an odd bet — that it could attract more applicants if it charged them a monthly entry fee of $30.
That is precisely the opposite of the approach used by mass-market employment sites, which charge applicants nothing but charge companies varying fees to post job openings.
In its early years, TheLadders.com was slow to grow, partly because it did not attract enough job postings to justify the site’s cost. But as employers and corporate recruiters learned that they could find qualified applicants for nothing, the number of job postings jumped.
Now, according to Marc Cenedella, the chief executive of TheLadders.com, the site listed 70,000 jobs last week and is on pace to exceed $30 million in sales this year from about 1.4 million subscribers. And the site now counts Microsoft and the EMC Corporation as clients.
“We’re doing the same thing that’s done in national parks: put a price on it so you get the right number of people,” Mr. Cenedella said.
Mr. Cenedella said that the company is not yet profitable, but is “cash flow positive.” The number of subscribers who hear about the site from word of mouth, he said, has nearly doubled, to 34 percent, in the last three years.
Mr. Cenedella, who was a senior vice president at HotJobs when the company was acquired by Yahoo, said TheLadders would expand in the coming months to include jobs with annual salaries of $75,000 or more. (Only about 10 percent of the roughly 150 million workers in the country earn $100,000 or more, he said, while 20 million earn from $75,000 to $100,000.) Even that lower salary threshold, however, is high enough to attract job candidates who will pay to see the listings.
Ms. Li, of Forrester, said that TheLadders and other fee-based online job boards could face difficult times as baby boomers retire and the job market opens up.
“Companies say they’re going to lose 30 percent of their forces over the next five years, and those will all be upper-echelon jobs,” she said. “So if you’re paying to look for jobs, in some ways it’s signaling that you’re not a very good candidate.”
Heather Hamilton, a staffing manager at Microsoft who uses the site to fill marketing positions, disagreed. “If you’re not serious, you’re not going to pay the money,” she said. “That’s a big part of why we’ve found TheLadders to be more fruitful than other job boards.”
Some of the big online job boards have also tried to aim at the highest-paying jobs. In 2000, Monster started ChiefMonster.com, which screened prospective job seekers to ensure that they were worthy of the best jobs, but the service failed to attract a following and Monster shut it down.
Other sites devoted to six-figure salaries and senior executives say that they, too, are thriving. ExecuNet, a service based in Norwalk, Conn., charges about $400 annually, or $39 monthly, for its online networking, industry data and job listings, among other things.
According to David B. Opton, the company’s chief executive, the business has about 25,000 subscribers, but their average income is $221,000 and the average age is 48. Job postings have increased about 30 percent over the last year, he said, and, perhaps as a result, ExecuNet’s membership has risen 15 percent.
Networking sites have become an increasingly important tool for companies looking to fill senior positions. LinkedIn, in particular, has emerged as a favorite trolling ground for corporate recruiters across the spectrum of job levels.
The online market for high-priced talent extends beyond full-time workers. Take HotGigs, for example. The company, which is based in Minneapolis, provides job listings for contract workers. In the three years since its debut, its customer base has grown to nearly 70,000 consultants who pay $100 yearly for the right to answer job listings
from about 19,000 companies and recruiters.
Doug Berg, the company’s chief executive, says the idea of paying to apply for a job is foreign to some people.
“We get a lot of people who e-mail us and say they shouldn’t have to pay for a job,” he said. “Our thing is, if you’re a professional consultant, you have to learn how to market yourself. Besides, if I didn’t charge, every wannabe in the world would come in.”