Tuesday, January 31, 2006
According to eWeek, Salesforce.com is not yet out of the woods with its service level problems. Customers report that the CRM on-demand pervice was down for several hours on January 30, and certain selected features have been unavailable from time to time during the month of January.
Wall Street takes note:While the earlier outages have had little apparent effect on Salesforce.com's stock valuation, there are indications that "this morning's outage is apparently leading to more aggravated customer and prospect responses," analyst Michael Murphy wrote in a First Albany Capital Inc. market update.Salesforce.com denies that the problems are as extensive as eWeek is reporting.
From Salesforce.com customers' views, "the outage experience has transitioned from an isolated event into a recurring trend and the 'get out of jail free card' has been used," Murphy wrote.
I think Salesforce.com is suffering from its success, as hundreds of new customers sign up each quarter. It reminds me of the problems that AOL had back with dial-up service in the 90s after it ramped up its marketing efforts. Eventually, AOL got the situation under control, but in the meantime there were many defections to competitors such as Earthlink.
Salesforce.com will eventually get its service levels back up to where they need to be. But in the meantime, how much damage will this do to Salesforce.com and to the software on-demand trend in general?
Update, Feb. 2. Computerworld has reactions from other users, many of which are not deeply concerned about service levels.
Another service outage at Salesforce.com
Salesforce.com's credibility suffering from service outagesby Frank Scavo, 1/31/2006 11:59:00 AM | permalink | e-mail this!
Reader Comments:What SaaS vendors need to appreciate is that their job is actually harder than that of a traditional e-commerce company.Post a Comment
When you sell a subscription service, your customer depends on you for their business to run.
If Amazon goes down, I can go to BN.com or any number of other vendors to make a purchase.
If Salesforce.com goes down, the sales team gets the torches and pitchforks and gets ready to riot.
The IT groups at SaaS vendors are under much heavier pressure than the IT groups at e-commerce vendors.
My own company, Symphoniq, which sells Web application performance monitoring tools, has found a lot of success with SaaS vendors. The key is that when something goes wrong, the users complain. Our tool lets the IT group see exactly what performance the user experienced, and traces any slowdowns or errors to specific machines, servers, even method calls and SQL queries.
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