The Hindu Business Line : ‘Multi-tenancy model gaining space’

Hyderabad, Sept. 8 Multi-tenancy computing is expected to make inroads into India soon with large enterprises such as Merrill Lynch, Citibank, and scores of small and medium businesses already adapting it, according to Salesforce.com.

A pioneer in multi-tenant computing (also referred to as software as a service), Salesforce.com, with revenue rate of $1 billion, is amongst the fast growing technology companies. It is seeking to replicate its success in India.

The Vice-President and Head of Financial Services, Salesforce.com, Mr Renny Monaghan, told Business Line over phone how this model is challenging the traditional packaged software implementation and its service providers as this can help those with barely 20 users as well as those hwo have as many as 40,000 users.

The traditional software companies such as SAP, Oracle, Microsoft, who are also engaged in this pay-as-per-usage model, have a tough call to make as this model has a direct bearing on their licence revenues, he said.

If reports by independent research firms such as Gartner are taken into account, the SaaS market will be about 25 per cent of total software business by 2011. To vindicate this stand, most of the large Indian IT services providers such as Infosys, Satyam, and Wipro have created centres around SaaS model.

In a discussion, Me Monaghan outlines some key developments in this space, recent wins and how Salesforce.com’s platform based services model is allowing flexibility for enterprises to host their services.

What are some major trends in SaaS market?

The customer relationship market is projected to be at $18 billion by 2011. While some research reports point towards $11.5-billion market for SaaS by 2011, other analysts have much more aggressive outlook for this area.

There has been a tremendous shift in the software industry from when we started. Today, every day new companies are being built on SaaS model delivering applications that manage everything from human resources to supply chain and enterprise resource planning. Many of them can be found on Salesforce.com platform.

We believe that packaged software, a customised software deployment for enterprises, will become obsolete one day as everything is moving online. Just like the client-server software replaced mainframe during the 90s, we are in the midst of another major evolution. Here new generation leaders such as Google, eBay, amazon.com and Salesforce.com, who have built new platforms for cloud computing, have emerged.

How do you visualise this market?

The future of all business software is on-demand. If you take the case of salsforce.com, it is leading this change with 47,700 customers and 1.1 million subscribers who believe in this vision. Cisco, Dell, Merrill Lynch, Japan Post are among companies who harness the power of multi-tenancy approach; i.e. where we host the software, they just log in and start using.

What is your plan for India?

India is leading the way as a key contributor to this momentum. Given the growing adoption rate of SaaS solutions, Salesforce.com is focussing on developers to work on the company platform to offer services and to small and medium enterprises in possibly all sectors. Most companies are working on this as we believe that this will be the way forward. The market is poised to build and deliver applications locally for global community.

Ramco Systems deployed Salesforce.com to improve its sales effectiveness and infrastructure company Maytas Properties selected Salesforce enterprise edition to manage customer relationship.

You have recently made iPhone compatible with your CRM, challenging existing players such as Blackberry?

It does not take much research into mobile platforms to realise that Salesforce.com has built something quite unique. Many mobile platforms require customisation. But for us, the key differentiator is the CRM platform. With iPhone interface, enterprises can empower mobile workforce.

Financial services must be a big growth area?

Over 1600 financial services companies use SaaS. They have always been early adopters of technology. We believe that this is just the beginning of more engaging association with these companies.

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