In 2006, Chris Anderson wrote the bestseller “The Long Tail” explaining how the Internet enables an online store to profitably sell small quantities of a large collection of items, a feat that was impossible in the offline retail world. In the world of SaaS, PaaS is the ideal vehicle for enabling a long tail of vertical and horizontal applications to a core SaaS offering. PaaS enables developers to enhance a SaaS offering through developing plugins and solutions that work seamlessly with the “mother” application. The beauty of the online software model is that a customer can activate these plugins and solutions instantly online and that future updates and patches will be installed on-the-fly.
The mere existence of such a PaaS platform alone, although crucial, is not enough to create a software long tail. There are two additional elements needed. The first one is a community of sales, integration and development partners that are able to develop new software, integrate solutions into existing environment, and sell these to customers. The second is a marketplace where matchmaking between prospective customers and an assortment of apps will take place. The figure below provides a graphical representation of how this software long tail ecosystem works.
Using a real life example, it becomes clear how this works. How does the salesforce.com ecosystem look if we take the above figure as a blueprint? The core SaaS offerings of salesforce are the sales cloud, the service cloud, and now also database.com (although some might say database.com is a PaaS offering).
Salesforce delivers their own industry specific versions of their SaaS offerings for the communications, financial services, healthcare and life sciences, high tech, public sector and retail segments.
The AppExchange is the salesforce.com marketplace.
Force.com is the salesforce.com PaaS offering.
Salesforce is rapidly expanding this ecosystem. At dreamforce 2010, database.com was announced as an additonal core SaaS offering. We expect there to be more of these in the future, for instance in the area of workforce or fieldforce automation. If salesforce thinks these markets (are) will be big and they have expertise they will launch or acquire these spaces themselves. If these markets are outside their expertise they will partner with others (for instance, RemedyForce by BMC for IT management).
Adding voice, text, and video collaboration as horizontal functionalities is another area that we see as a natural extension for salesforce, augmenting their Chatter offering. Adding sales training could be another more business orientated offering, complementing the sales lead offerings.
In fact, we believe it is on the cards that salesforce will change its name to force.com as sales automation will rapidly become only one of the many forces that they bring to bear.
What do you think of SaaS, PaaS, salesforce, and the software long tail? Let us know!