Competitive Sales Guide

Sage SalesLogix v Salesforce.com

Updated February 2010

IMPORTANT : This document is not intended for end prospects. The screenshots from competitor solutions contained within it are for strictly for partner education purposes only. This document is considered confidential information as defined by your Sage Channel Partner Agreement. It is provided to you as a Sage

Business Partner and must not be copied, reproduced, posted on your web site or distributed without express written permission from the Sage legal department

.

Contents

Introduction ................................................................................................................................................................. 2

Win:loss analysis ......................................................................................................................................................... 2

Salesforce.com business strategy ............................................................................................................................... 2

Salesforce.com sales tactics ....................................................................................................................................... 3

Salesforce.com product editions that compete with Sage SalesLogix ........................................................................ 4

Snapshot of Salesforce.com ....................................................................................................................................... 5

Competitive Sales Strategy #1 - Compete on the Basis of Cost and Usage Restrictions............................................ 6

Competitive Sales Strategy #2 - Compete on the Basis of Business Risk ................................................................ 14

Competitive Sales Strategy #3 - Compete on the basis of product capabilities and user empowerment .................. 22

Summary of Recent Product Releases and Company Announcements ................................................................... 26

Summary of Competitive Sales Strategy ................................................................................................................... 28

Introduction

With over 67,500 customers and 1.5m users, Salesforce.com

® is the most high-profile and successful first generation software-as-a-service provider. It relies on aggressive sales and marketing activities, and significantly outspends its competition in these areas. It is the strongest competitor that Sage

SalesLogix faces in the mid-market today. Salesforce.com is provided through a range of tiered editions, and represents a broad (but not necessarily deep) feature set that is supplemented by 700 ISVdeveloped solutions that can be added to a Salesforce.com subscription through AppExchange: its online marketplace. Ten years down the line, the company continues to focus on the benefits of cloud computing. And this strategy has been a particularly successful in the down economy where “ low cost and low risk – the right answer for right now” reflected the challenging market conditions of the time.

Win:loss analysis

Sage undertook a major research project in 2009 to better understand why prospects select our CRM applications in some opportunities, and our competitors in others. We carried out three separate, but similarly structured, win:loss surveys for Sage SalesLogix, ACT! and Sage CRM, and canvassed customers and former prospects across a broad geography. The results of the Sage SalesLogix win:loss survey revealed that Salesforce.com is the competitor that SalesLogix faces most frequently in competitive opportunities. It is also the competitor that scores most competitive wins against Sage

SalesLogix, particularly in North America. The top 5 reasons that companies cite for choosing

Salesforce.com over Sage SalesLogix are: (1) availability of a SaaS/hosted model, (2) lower cost, (3) easier to use, (4) recommended by peers and (5) extensibility. In other words, Salesforce.com is perceived to be a lower cost, lower risk proposition when compared to Sage SalesLogix. It can be very difficult to push back on these perceptions, particularly when Salesforce.com is the originator of the deal and Sage SalesLogix has been introduced by a partner later in the cycle. It’s important, therefore, to challenge the prospect ’s perceptions of Salesforce.com and prove that Sage SalesLogix is a stronger value propositions (not just the feature set) for their company’s needs.

Salesforce.com business strategy

While CRM applications have been the mainstay of Salesforce.com

’s business over the last 10 years, the company is betting its future on the broader adoption of the Force.com: the ‘enterprise cloud computing’ platform that

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underpins them. Force.com was launched over two years ago. And while it still only accounts for a very small part of the company’s revenues, Salesforce.com sees it as an important standalone proposition for: (1) customers to develop their own applications in the cloud and (2) for other software developers to develop or migrate applications to the Cloud. The the big advantage that Force.com has today over

Amazon EC2 or Google for example, is that it provides a full integrated development environment (IDE)

- data layer, business rules layer and presentation layer, so companies can leverage its business logic and presentation capabilities from day one. Salesforce.com claims this equates to a 5x productivity advantage, and applications can be developed in half the time. The biggest challenge that

Salesforce.com faces in this space comes from Microsoft with Azure Cloud Services and xRM. Microsoft is pushing this heavily in 2010, and more importantly, it has the financial strength, customer reach and developer ecosystem to overcome any early mover advantage that Salesforce.com has gained. As a result, Salesforce.com has been discounting CRM heavily to drive up the number of users on the

Force.com platform. It has also recently launched a formal Force.com partner programme, as well as making single user, developer licenses available free of charge. This strategy is likely to mean that

Salesforce.com will continue to discount CRM subscriptions throughout 2010 and new releases will focus on smaller, incremental enhancements to the application rather than major upgrades.

Salesforce.com sales tactics

(1) World class customer on-boarding process

Over 50% of Salesforce.com’s annual revenues are reinvested in sales and marketing activities; significantly more than any of its direct competitors.

As you might expect from an on-demand service provider, Salesforce.com relies heavily on its online assets and automated e-marketing; spending in excess of $10,000 a day on Google AdWords alone.

Salesforce.com is a volume business that relies on rapid growth in its subscriber base. To achieve maximum coverage, the company favours a centralized, inside-sales model, with fewer fieldbased staff using relationship-based selling. As a result, face-to-face meetings with Salesforce.com sales executives are less common for smaller opportunities. Salesforce.com uses a highly automated customer on-boarding process, and as soon as a prospect clicks on a Salesforce.com sponsored link they embark upon a highly defined sales process that aims to convert them from a prospect into a subscriber within 30 days (and ideally within 10 days).

This is achieved through a carefully coordinated combination of automated e-mails, phone, and e-mail contact from a Salesforce.com call centre, online product demonstrations, trial subscriptions and time limited offers.

(2) Selling to the business decision maker

Salesforce.com is most effective when selling directly to the business decision-maker (BDM) rather than the technology decision-maker (TDM). Over the last two years, the company has used Force.com to develop a rounder proposition that attempts to neutralize some of the residual concerns that the IT department might have around software-as-a-service. This strategy has been particularly effective for selling to larger enterprises. The sales department, however, remains the sweet spot for the company. It will encourage the head of sales to act as a sponsor and bridgehead into marketing and customer service departments; helping to widen the opportunity. And by pitching Salesforce.com as a quick win commercial, OpEx initiative rather than an IT, CapEx project, the company can shorten the sales process significantly. So much so, that the prospect frequently will not engage in a formal procurement process or even invite proposals from other providers.

(3) Low cost, low risk proposition

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Salesforce.com was one of the first business applications providers to make subscription-based pricing mainstream. By pricing its solution on a cost per user per month (pupm) basis, Salesforce.com provides an attractive entry point and the perception of lower, on-going costs over the lifetime of the application.

Customers like its transparency and the direct relationship between usage and cost. The company also relies on the fact that on-premise providers cannot translate their perpetual, up-front pricing into a cost per user per month; making it difficult to carry out an accurate comparison. Salesforce.com also claims that on-premise solutions will cost significantly more to roll out and administer on an on-going basis. The company uses a segmented product pricing structure that ensures it captures prospects at a low initial price point, with the opportunity to cross-sell or up-sell further services downstream. Professional Edition; the most commonly sold version of Salesforce.com, represents a good example of this approach. On the surface,

Professional Edition seems to provide everything that a company would need from a CRM solution: activity management, sales, marketing and customer service automation. However, many key capabilities are not included as standard, and are only available through extra cost subscription uplifts or by upgrading to the Enterprise or Unlimited editions of the product. This is discussed in greater detail later in this document.

(4) Using the Master Subscription Agreement and customer data as leverage

The Salesforce.com Master Subscription Agreement (MSA) details the standard terms and conditions that all customers must accept before they can use the service. These terms and conditions are normally non-negotiable, although exceptions can be made in the case of very large prospects. All subscribers to the Salesforce.com free 30 day trial must sign the Master Subscription Agreement. If the trial subscription is converted into a commercial subscription subsequently, then the terms and conditions carry over automatically. The MSA outlines the obligations on both Salesforce.com and the customer. Significantly, it allows Salesforce.com to block the cus tomer’s access to their data in certain circumstances. This is also discussed in greater detail later in this document.

(5) Innovation

Salesforce.com has leveraged innovation in its products and commercial model to good effect. It has been particularly effective in leveraging consumer-led technology trends within it solutions.

Salesforce.com was the first mainstream CRM provider to embrace social networking through its integration with Twitter and its recently-launched Yammer clone called Chatter. Through AppExchange and IdeasExchange, it was the first to leverage Amazon / iTunes-inspired, community-based marketplaces. And it was also the first CRM provider to deliver packaged integration with Google Apps and an iPhone client. In a maturing market such as CRM, this strategy has helped Salesforce.com to maximise its press coverage through what are in many cases, lightweight product enhancements. It has also helped to differentiate Salesforce.com in its product demonstration.

(6) Enterprise focus

Salesforce.com has made no secret of the fact that it has continued to increase its focus on the enterprise segment of the market, going head-to-head with Oracle and SAP in particular.

Salesforce.com product editions that compete with Sage

SalesLogix

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Professional Edition

Professional Edition is the most commonly sold edition of Salesforce.com. It is priced competitively

($65pupm currently), however, key capabilities such as offline and mobile access, workflow, campaign management, team selling are not provided as standard. And this edition provides very limited storage.

Enterprise Edition

Offline and mobile access, workflow, campaign management, team selling and other features not provided within Professional Edition, are available as standard within Enterprise Edition. However, it is twice as expensive as Professional Edition ($125pupm) and is still hampered by storage limits and restrictions on extensibility.

Unlimited Edition

Unlimited Edition is the ‘everything turned on’ version of Salesforce.com, but its dizzying price point

($250 pupm currently) makes it the most expensive CRM application on the market today, and something that can really only be considered by the largest of companies, or through a significant discount.

Snapshot of Salesforce.com

Features Platform Extensibility

Good breadth, limited depth across big 3

Java hybrid

Interface driven

Salesforce IDE with Visualforce interface technology

Defined by edition

AppExchange

Built on / integrate to Force.com

Simplicity over sophistication

No certification

Build out through AppEx

Sales Marketing Service

Strongest and most complete area

Weakest area

Advanced features like territory management and revenue scheduling in higher editions

AdWords integration

Limited email capabilities

AppExchange to build out

Swiftpage integration is a better solution

Growing

Good case management support

New call centre capabilities

Instranet acquisition for KM

Customisation Workflow BI

Force.com Builder toolkit – point and click

Tabs, entities and validation rules

ApEx code access in higher editions only

Lead and case routing only in

Professional Ed

End user reporting and dashboarding

Simple workflow engine; event, trigger, action; designed for end user

Focus on simplicity

AppExchange for more complex needs

Task, email, field update, outbound message

Limited by edition

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Usability Data Verticals

Easy-to-use

Multi-tenanted – logically separated but in the same DB environment

Website rather than web app feel

Strong online help and discoverable features

SAS70 certified data centre leased from Equinix

Real-time data mirroring for higher editions 

Multiple screens and refresh rate makes it challenging for transactional

CRM

Templates

AppExchange available

Financial services , telecoms etc from

Offline

Local DB and briefcase application

Mobile

Device-specific, persistent client

Local data

Sync-based

Outlook integration

Client side only

Competitive Sales Strategy #1 - Compete on the Basis of

Cost and Usage Restrictions

(1) Expose the feature gaps in Salesforce.com Professional Edition

While Professional Edition is the most commonly deployed Salesforce.com edition, several core features are not provided as standard. As mentioned above, capabilities such as campaign management and product catalogues are only available as additional cost options. Features such as team selling, territory management, and sales workflow, on the other hand, are only available by upgrading to more expensive editions. The table below compares Salesforce.com Professional Edition and Sage SalesLogix Standard Edition. Later in this document, we will demonstrate that both products have a similar total-cost-of-ownership (TCO), however, there are significant differences in the features that are provided as standard. Based on feature set, Salesforce.com Enterprise Edition is the closest direct comparison to Sage SalesLogix.

Key Functionality & Capabilities Salesforce.com Professional Edition Sage SalesLogix Standard Edition

Access to the Web services API

Data exports for weekly backups

Workflow automation

Field level security

Not available

Extra cost option

Not available

Not available

Included as standard

N/A

Included as standard

Included as standard

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Marketing campaign management Not available Included as standard

Offline access

Mobile access

Customer self-service

Extra cost option

Extra cost option

Included as standard

Extra cost option

Advanced call scripting

Territory management

Not available

Not available

Not available

Extra cost option

Included as standard

Included as standard

Team selling Not available Included as standard

(2) Expose the cost of incremental service additions

Salesforce.com levies additional charges on its customers for many add-on services that should be included as standard within the product. The table below summarizes some of these hidden costs.

Salesforce.com Add-On Service Additional Subscription Cost Additional Cost per User per Year

$780 Applies to Professional Edition only $65

Campaign Management

Product Catalog

Offline Access

Applies to both Professional &

Enterprise Editions

$15

$10

$25

$65 / $125

$180

$120

$300

$780 / $1500

Mobile Access**

Salesforce.com Content

Customer Portal*

Partner Portal

Data Storage

Sandbox (test environment)

Premium support

$50

$35

$5

$13

$1500 per 500MB PY

$30 per sandbox PM

25%

$600

$420

$60

$156

N/A

N/A

N/A

Functionality for the sales team

Offline access is essential in the case of on-demand

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applications, and this is a particularly important consideration in the case of field-based staff. Because this feature is only available as standard within higher cost Enterprise and Unlimited Editions, fieldbased users of Salesforce.com Professional Edition will have will have to sign up for a mobile data plan

($40 pupm on average) or pay $25 per month on top of the cost of their Professional Edition to add offline capabilities. Additionally, if the same executi ve needs to use Salesforce.com’s product catalogue for quotations, they will have to add a further $10. The original cost of Professional Edition at $65 pupm actually costs $100. Clearly, this can have a considerable impact on the total cost of ownership of

Professional Edition.

Storage costs

Storage costs can impact significantly on the cost of Salesforce.com deployments over their lifetime. For both Professional and Enterprise

Editions, Salesforce.com provides up to 20MB of data storage per user or up to 1GB per company, whichever is greater. Beyond that,

Salesforce.com customers are charged $1500 per extra 500MB per company per year. In 2009,

Salesforce.com introduced a dedicated file storage allocation of 100MBs per user. This can be used for files and attachments. However, neither data nor file storage allocations are adequate for companies looking to make the most out of their CRM system. The net effect is that customers will have to periodically archive or delete files and / or data from their Salesforce deployment – effectively penalizing them for using their own application. Evidence suggests that even companies migrating smaller Goldmine or ACT! databases have been forced to leave behind much of their historic data because of the restrictions that Salesforce.com imposes in this area. Feedback from Salesforce.com customers also suggests that most have to routinely delete / archive data and / or attachments from their systems in order to remain under their storage limit.

Moreover, Salesforce.com’s own best practice guide for data management presents a less than satisfactory range of options for managing the growing storage requirements that customers will inevitably face when using their application. It recommends that companies should:

Buy additional storage – 50MB or 500MB increments or

Mass delete records – up to 250 at a time or

Use Mass Delete Application or

Mass delete records using Excel Connector and AppExchange data loader or

Delete attachments or

Mass delete attachments using the Attachment Manager Application or

Mass delete attachments using Excel Connector and AppExchange data loader or

Mass delete and archive case attachments or

additional file storage of 100MBs per user to be used for documents and attachments or

Clearly, regardless of which option(s) that the customer pursues, it is likely to involve additional cost and / or administration.

(3) Educate your prospect on the true TCO timeframe for comparisons

The subscription-based model used by Salesforce.com reduces up-front investment significantly and provides a comparatively low TCO for years 1 and 2. By year 3, however, the Salesforce.com will cost at least as much as comparable editions of Sage SalesLogix. And beyond 3 years, the TCO of

Salesforce.com will be significantly higher. Gartner estimates that the average lifecycle for a CRM application today is 5 years. The calculation of TCO beyond 3 years, therefore, is very important to any prospective purchaser’s decision-making process. You should demonstrate the true cost of

Salesforce.com to your prospects by using a 3 to 5 year timeframe. It is at this point that the price difference between it and Sage SalesLogix will become very difficult to justify.

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(4) Use Sample Cost comparison scenarios

This section provides a number of TCO comparisons between Sage SalesLogix and Salesforce.com that will help to illustrate the significant TCO advantage that Sage SalesLogix over Salesforce.com. For the purposes of these examples, full implementation and supports cost have been included in the case of

Sage SalesLogix and excluded in the case of Salesforce.com (unless otherwise stated). [NOTE: all calculations have been carried out using the Sage SalesLogix v Salesforce.com TCO Calculator which is available to download from Partners Online, eTeam or Open].

Illustrating the significant acceleration of Salesforce.com cost over the lifetime of the application

The chart below compares the TCO of Sage SalesLogix Standard and Advanced Editions with

Salesforce.com Professional and Enterprise Editions for sixty users over one year. As we can see,

Salesforce.com provides a significantly lower TCO over 1 year when compared to Sage SalesLogix.

The chart below illustrates the same cost information, but presented as the cost per user per month.

Again, we can see that both Sage SalesLogix Editions are more costly per user per month when compared to the two Salesforce.com subscriptions.

The same sixty user deployment is featured in the following two charts. On this occasion, however, the

TCO period is extended to five years; the average lifecycle for a CRM application.

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As we can see, the TCO of Salesforce.com increases rapidly when compared to Sage SalesLogix. The net result is that Sage SalesLogix provides a significantly lower TCO and cost per user per month over the average lifecycle of the application. This acceleration of cost can be seen more clearly in the chart below.

(5) Highlight the true cost of Salesforce.com Professional Edition

The graph below examines the average cost per user per month of Sage SalesLogix Standard Edition compared to

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Salesforce.com Professional Edition for sixty users over three years. As we can see, the basic subscription for Salesforce.com Professional Edition offers a lower cost per user per month compared to

Sage SalesLogix.

Within Professional Edition, however, sales users will have to pay extra for the product catalogue feature ($10 pupm) if they want to add product information to their quotations. Equally, marketing users will have to pay extra for campaign management capabilities ($15pupm) in order to plan and manage their marketing activities through Salesforce.com. Additionally, Professional Edition users will have to pay extra for offline access ($25pupm) if they want to use the application when disconnected from the web. All of these capabilities are provided as standard, or on a low cost basis within Sage SalesLogix.

The chart below, therefore, represents true average cost per user per month of Salesforce.com

Professional Edition with forty sales users that also need offline access, along with ten marketing users.

As we can see, the true cost of Salesforce.com Professional Edition is considerably higher than the standard subscription cost and makes it more costly than Sage SalesLogix; even over just two years.

And significantly, this comparison does not include offline access for Salesforce.com users which would push the price up by $25 for each user.

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(6) Demonstrate the significant value that Sage SalesLogix provides over

Salesforce.com

The Sage SalesLogix Premier Edition with Executive Bundles provides significant value for money when compared to Salesforce.com Enterprise Edition. The chart below compares the five year TCO for sixty users of Salesforce.com Enterprise Edition with a fully loaded deployment of Sage SalesLogix Premier

Edition, that includes Visual Analyzer advanced analytical capabilities for all users, as well as mobile and offline access.

As we can see, a fully loaded deployment of Sage SalesLogix still has a TCO which is 38% lower than the standard Salesforce.com Enterprise Edition subscription. If mobile access costs are then added to

Salesforce.com, the difference is even greater, as can be seen in the graph below

Furthermore, additional storage requirements will push up the cost of the Salesforce.com deployment again. For example, if each user requires an average of 100MB of storage, this will result in an 11% increase in the cost of the solution.

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This means in order for a company to roll out the same capabilities as a fully loaded Sage SalesLogix deployment using Salesforce.com, it would incur nearly three times the cost over the lifetime of the system

(7) Highlight higher market rates for Salesforce.com professional services

Regardless of deployment model, companies rolling out Salesforce.com will generally need to engage with a professional services provider to cover project scoping, data migration, configuration, customization, integration, and other tasks. Due to the limited availability of professional services resources from Salesforce.com directly or through its implementation partners (examined later in this document), Salesforce.com implementation and consulting charges are generally higher than the market average e.g. $250 per hour in North America. This will impact significantly on the TCO of the application, particularly for companies with more complex requirements such as integration with a lineof-business application.

(8) Highlight the additional restrictions that Salesforce.com imposes on its customers

Salesforce.com imposes limitations throughout its products in order to maximize revenue opportunities through upgrades and additional cost services. Salesforce.com not only strips out key features from less expensive editions of its products, it also imposes further usage restrictions on the features that remain.

These are summarized in the table below:

Salesforce.com Limitations and

Restrictions

Salesforce.com Professional Edition Salesforce.com Enterprise Edition

Storage Up to 1GB or 20MB per user Up to 1GB or 20MB per user

Custom fields per object

Total custom objects

Total custom tabs

Up to 100

Up to 50

Up to 10

Up to 500

Up to 200

Up to 25

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Custom & AppExchange Apps

External addresses included in mass e-mail

Volume of mass e-mail

Size of individual e-mail attachments

Total attachments per e-mail

Web cases

Web leads

Offline accounts

Marketing campaign levels

Weekly activity recurrences

Up to 5

Up to 250 per day

Up to 1000 per day

Up to 5MB

Up to 10 MB

Up to 500 per day

Up to 500 per day

Up to 5000

Up to 5

Up to 53

Up to 10

Up to 500 per day

Up to 1000 per day

Up to 5 MB

Up to 10 MB

Up to 500 per day

Up to 500 per day

Up to 5000

Up to 5

Up to 53

Maximum number of custom /

ApEx apps

5 10

The net result of these restrictions is to limit, and potentially penalize, customers that want to maximize the use of their CRM application. In particular, limitations on custom objects, tabs, and applications would mean that a company looking to implement a strategic CRM deployment would have to subscribe to Salesforce.com Unlimited Edition ($250 pupm) before they could even come close to achieving the level of customizability offered by Sage SalesLogix.

Competitive Sales Strategy #2 - Compete on the Basis of

Business Risk

(1) DEPLOYMENT CHOICE

Customers can choose to install and manage Sage SalesLogix at their own offices as an on-premise application. They can elect to host it in a specialist third-party data center through a co-location agreement. They can also choose to outsource their application entirely to a specialist, Sage-certified business partner through a managed services contract. Sage SalesLogix licenses can be purchased upfront and capitalized /

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financed over the lifetime of the application. And the recent introduction of SaleLogix Cloud means that customers now also have the option to purchase Sage SalesLogix on a subscription basis as an ondemand service. This ensures that Sage SalesLogix customers benefit from the greatest choice in the market when it comes to how they wish to consume, support, and pay for their CRM application. Ondemand will not be appropriate, or desirable, for all companies in all circumstances. For example, a company might decide that its customer data to be too sensitive to be stored externally or it may prefer to address its complex integration requirements by keeping all of its applications in-house. In these and other scenarios, Salesforce.com does not provide an appropriate solution.

On-demand only

Salesforce.com can only be deployed as an on-demand solution. Salesforce.com customers, therefore, are obliged to accept the specific considerations associated with hosting business-critical applications and customer data off-premise and using the Internet to access them. In particular, they must give due consideration to application availability, performance, and security. Customers must plan around scheduled maintenance which occurs periodically throughout the year for upgrades and other work.

While Salesforce.com generally restricts this to off-peak hours, its service can be offline for several hours on each occasion. Customers also have to deal with unscheduled maintenance. Salesforce.com serves the majority of its customers, including those located outside of North America, from a single, third-party (Equinix) Web hosting facility located on the West Coast of America. A separate backup facility, located on the East Coast is managed by the same third-party. Salesforce.com acknowledges the vulnerability of these facilities to service interruption in its annual reports:

“We do not control the operation of any of these facilities, and they are vulnerable to damage or interruption from earthquakes, floods, fires, power loss, telecommunications fai lures and similar events…. Despite precautions taken at these facilities, the occurrence of a natural disaster or an act of terrorism, a decision to close the facilities without adequate notice or other unanticipated problems at both facilities could resul t in lengthy interruptions in our service.”

Salesforce.com also acknowledges the risk of service downtime:

“Because our service is complex and we have incorporated a variety of new computer hardware and software, both developed in-house and acquired from third-party vendors, our service may have errors or defects that users identify after they begin using it that could result in unanticipated downtime for our subscribers and harm our reputation.

Internet-based services frequently contain undetected errors when first introduced or when new versions or enhancements are released. We have from time to time found defects in our service and new errors in our existing service may be detected in the future. In addition, our customers may use the service in unanticipated ways that may cause a disruption of service for other customers attempting to access their data. Since our customers use our service for important aspects of their business, any errors, defects, disruptions in service or other performance problems with our service could hurt our reputation and may damage our customer’s businesses. If that occurs, customers could elect not to renew, or delay or withhold payment to us, we could lose future sales or customers may make warranty claims against us, which could result in an increase in our provision for doubtful accounts, an increase in collection cycles for accounts receivable or the expense at the risk of litigation.”

While Salesforce.com has made a significant investment in improving application availability, unscheduled downtime is still a fact of life. For example, an outage affected all instances of

Salesforce.com in early January 2010, and while the company claimed that the application was back running within two hours, users continued to report issues with availability and performance on Twitter in the hours that followed. Additionally, and perhaps more importantly, system vulnerability is not just a technology issue, it’s also about people. For example, Salesforce.com was a victim of phishing attack in

2007 when fraudsters convinced a member of its accounts department to hand over sensitive password details which allowed them to access details of Salesforce.com’s own customer base, including accounts payable information 1 . The fraudsters then sent bogus invoices to several of these customers purporting to be from Salesforce.com. Several high profile Salesforce.com customers such as ADP and

SunTrust Bank were affected. Having gained access to Salesforce.com’s customer contact details, the fraudsters th en repeated the phishing attack on these company’s own end customers. The incident

1 http://blog.washingtonpost.com/securityfix/2007/11/salesforcecom_acknowledges_dat.html

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highlights the potential risk of handing over data management and protection policy to a 3 rd party.

Salesforce.com was forced into an embarrassing admission of liability:

"We learned that a salesforce.com employee had been the victim of a phishing scam that allowed a salesforce.com customer contact list to be copied," the company wrote. "Information in the contact list included first and last names, company names, email addresses, telephone numbers of salesforce.com customers, and related administrative data belonging to salesforce.com. As a result of this, a small number of our customers began receiving bogus emails that looked like salesforce.com invoices, but were not--they were also phishes. Unfortunately, a very small number of our customers who were contacted had end users that revealed their passwords to the phisher. However, a few days ago a new wave of phishing attempts that included attached malware--software that secretly installs viruses or key loggers--appeared and seemed to be targeted at a broader group of customers."

A recent report published by the European Network and Information Security Agency (ENISA), highlighted the areas listed below as potential risk factors for any SMB organisation considering an ondemand service:

Policy and organizational risks:

Lock-in

Loss of governance

Compliance challenges

Loss of business reputation due to co-tenant activities

Cloud service termination or failure

Cloud provider acquisition

Supply chain failure

Technical risks:

Resource exhaustion (under or over provisioning)

Isolation failure

Cloud provider malicious insider - abuse of high privilege roles

Management interface compromise (manipulation, availability of infrastructure)

Intercepting data in transit

Data leakage on up/download, intra-cloud

Insecure or ineffective deletion of data

Distributed denial of service (DDoS)

Economic denial of service (EDOS)

Loss of encryption keys

Undertaking malicious probes or scans

Compromise service engine

Conflicts between customer hardening procedures and cloud environment

Legal risks:

Subpoena and e-discovery

Risk from changes of jurisdiction

Data protection risks

Licensing risks

No provision for changing business needs

While companies may decide that on-demand is the most appropriate deployment model for their organization when the application is rolled out initially, they also need to give due consideration to future requirements. Salesforce.com does not provide for customers who, due to changes in their business environment, wish to move from an on-demand deployment to on-premise deployment at some point in the future. Changes in industry regulation or legislation may impose additional obligations on companies in the way that they manage customer data (e.g. Graam-Leach-Bliley Act or the Health Insurance

Portability and Accountability Act). Because Salesforce.com is based on a multi-tenanted platform, all of its customers, although logically separated from each other, share the same database. This means that

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Salesforce.com customers have very limited flexibility regarding the structure and administration of their database. If there is a change in industry regulation, for example, it is far more difficult to implement the measures, policies or procedures needed to meet those requirements because of the limitations imposed by Salesforce.com’s multitenant environment. These limitations could force a Salesforce.com to abandon their deployment in favour of another vendor’s on-premise solution. In this situation, the company would remain liable for the remainder of the Salesforce.com contract, as well as the cost of moving to another solution. By contrast, Sage SalesLogix customers always own their database onpremise or as a dedicated instance in the Cloud. They, therefore, have far greater flexibility and control over the way that it is managed and where it is located; making it far easier to adapt to changing market or regulatory requirements; helping them to focus on the needs of their businesses rather than the restrictions of their CRM platform.

Underestimating professional service and administration requirements

Salesforce.com claims its on-demand service can be deployed rapidly and provisioned easily, since customers do not have to spend time installing the servers, networking equipment, security products or other infrastructure hardware and software necessary to ensure a scalable and reliable service. In many cases, Salesforce.com

’s “no software” mantra has been interpreted by business executives as an opportunity to circumvent their IT department and avoid IT-related project delays. Companies frequently attempt to roll-out the solution on a self-install basis. Salesforce.com, however, is not a self-install solution, and the principal activities associated with a CRM roll-out are still applicable. Salesforce.com customers, therefore, will have to allocate time and budget to tasks such as project scoping, data migration, configuration, customization, and integration. Customization that requires Apex coding within

Salesforce.com can increase the time required to roll-out Salesforce.com because of the proprietary nature of the Apex platform (see section on proprietary platform lock-in below). Additionally, any perceived advantage that Salesforce.com offers in relation to the provisioning and administration of users, will be diminished significantly by Sage SalesLogix Cloud.

(2) PROPRIETARY PLATFORM LOCK IN AND CUSTOMIZATION CHALLENGES

Salesforce.com applications are designed and developed using non-standard, custom-development tools and a custom programming language called Apex, which is a fusion of SQL and Java (but not standard SQL or standard Java). By choosing to run their business applications on Force.com,

Salesforc e.com customers are locked into the company’s proprietary platform. In recent years,

Salesforce.com has sought to drive adoption of its Force.com platform outside of its core CRM offerings with the promise of a 5x productivity advantage for developers at half the cost of traditional development tools. Uptake, however, has been slow . Today, only a small percentage of Salesforce.com’s overall revenues come from the Force.com platform, while less than 10% of AppExchange solutions are native

Force.com applications. In 2009, Salesforce.com began giving away free, single user licenses called

Force.com Developer Edition, in order to encourage developers to test drive the platform. However,

“adoption is relatively low and represents a risk” according to Gartner. 2010 is the make or break year for Force.com. There is stiff competition from Microsoft with its Azure Cloud Services.

While Salesforce.com’s claims that Force.com has a significant productivity advantage 2 over traditional software development tools, developers face a number of specific challenges when working with Apex code and Salesforce.com’s multi-tenanted environment. Because all Salesforce.com customers share the same multitenant environment, Salesforce.com has to ensure that and individual customer’s development code does not tie up server resources disproportionately. To prevent this from arising,

Salesforce.com uses ‘Apex Governors’.

Governor limits are runtime limits enforced by the Apex runtime engine that enforces a number of limits to ensure that code does not monopolize shared resources.

Types of limits that Apex enforces are resources like memory, database resources, number of script statements to avoid infinite loops, and number of records being processed. If code exceeds a limit, the associated governor issues a runtime exception. Additionally, Salesforce.com has to ensure that customers do not introduce malicious or rogue code into the Apex environment. It does this by imposing

2

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a 75% Apex test code coverage requirement. This means a customer needs provide at least 75% code coverage i.e. using Apex code to test new Apex code. Code coverage is calculated by dividing the number of unique Apex code lines executed during the test method execution by the total number of

Apex code lines in all of the customer’s triggers and classes. It is only when the customer is sure that they have met the Apex Governor and test coverage requirements, that they can move their customizations from their Sandbox test environment into the production environment. Currently, there is no way to move customizations automatically from the test environment into the production environment

– customers have to recreate the code in the production environment (automatic promotion from test to sandbox environment is expected to be introduced later in 2010). These requirements impose a significant burden on developers, particularly those new to the Force.com environment. As one Apex developer described it:

“So for your developers, the limitations of the multi-tenanted architecture mean that coding is going to be a bit like getting dressed with one arm tied behind your back; not necessarily impossible, but certainly not easy. Soon after you've started working with this tool, you're going to start pulling your hair out. You'll find yourself growling at governor limits, cursing Apex 75% test code coverage requirements, puzzling over the real differences between Apex and Java, and wondering why object IDs come in 15char and 18-char flavours.

For that reason, most initial roll-outs of Salesforce.com focus on adapting the application through configuration (adding tabs, fields, changing field names, creating reports, dashboards and basic workflow etc – areas where Salesforce.com is very easy to use) rather than deep customization at the code level. As one analyst put it:

“Even in bigger opportunities, during roll-out, the focus is on mapping the customer to Salesforce.com; not the other way around.”

(3) LIMITS ON EXTENSIBILITY

As discussed previously, Salesforce.com imposes a wide range of limits and restrictions on the use of its applications. This is particularly evident in the case of extensibility – the ability to customize and add capabilities to an application, which is an area that prospects frequently do not investigate in depth when evaluating potential CRM solutions for their businesses. Access to Apex Coding and the

Force.com web services API is only available in

Enterprise Edition ($125 per user per month) or higher, significantly limiting the extensibility of Professional Edition. And, even within Enterprise Edition,

Salesforce.com imposes a limit of ten on the number of AppExchange add-on solutions that a customer can add to their installation. Many of the AppExchange add-ons are small plug-ins for Salesforce.com covering functions such as automatic de-duplication, mass email, sales methodologies and databases such as Hoovers. This limit also includes integration to any of the customer’s own applications or online services; therefore, it’s easy to see how this ceiling would be reached within a relatively short period of time. A limit of five custom / AppExchange applications is imposed in the case of Professional Edition.

(4) DATA LOCK IN

Salesforce.com does not make it easy for customers to move away from its service. When a customer contract expires, Salesforce.com makes their data available to them to download for a period of 30 days. After this time, the data is deleted. Attachments are provided in their native format, however, the customer’s data is returned in .csv flat files; a commonly used, but basic file format. Each entity in the customer’s database has to have its own individual .csv file. This can equate to more than 50 individual

.csv files, which the customer must then try to reconstitute into an individual database. This challenge is compounded by the fact that Salesforce.com utilizes case sensitive, 15 character record IDs that make it very difficult to work with commonly used data management tools. Additionally, the Salesforce.com metadata API is only available to customers on Enterprise Edition or higher, which means that

Professional Edition customers will not be able to bring their metadata with them. Feedback from former

Salesforce.com customers is that it is very difficult to take data out of Salesforce.com and use it in a meaningful way.

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(5) BURDENSOME CONTRACT OBLIGATIONS

The Salesforce.com Master Subscription Agreement (MSA), along with other commercial practices by the company, imposes significant burdens on Salesforce.com customers. Salesforce.com customers are: (1) locked into lengthy contract terms, (2) required to pay significant amounts upfront, (3) are subject to automatic renewal mechanisms, (4) potentially exposed to uncapped price hikes, (5) not provided with any mechanism for service cancellation or reduction prior to the expiration of their contract, and (6) are mostly unprotected by service level guarantees.

Automatic acceptance of the Salesforce.com

’s terms and conditions

All Salesforce.com customers are subject to the terms and conditions of the Salesforce.com MSA. A company is automatically deemed to have accepted these terms and conditions if an employee of the company has previously clicked on the ‘I agree’ box during signup for a Salesforce.com 30 day trial subscription. The terms and conditions of the trial subscription automatically carry over to the paid subscription, and the legal obligations, therefore, apply to the company as a whole.

“This master subscription agreement (“agreement”) governs your 30-day free trial of the services.I f you purchase our services, this agreement will also govern your purchase and ongoing use of those services. By accepting this agreement, either by clicking a box indicating your acceptance or by executing an order form that references this agreement, you agree to the terms of this agreement.”

Most customers are unaware of this sign up mechanism, and there have been cases where

Salesforce.com customer have had their contract renewed automatically (see section below) without knowing that they had agreed to this arrangement previously.

Payment upfront, lengthy contract terms and uncapped price hikes

Salesforce.com is touted as having a “low, predictable, monthly cost.” However, without express, prior approval from a senior Salesforce.com executive, subscriptions must be paid annually in advance on the anniversary of the start of the contract. Over the last year, some further flexibility has been introduced on payment terms, with customers being offered shorter payment intervals, e.g. every six months, or in limited cases, every quarter. However, Salesforce.com has been actively carrying out

‘cancels and renewals’ for many of its customers; offering discounted subscriptions if the customer cancels their original contract and signs a new contract for a longer term, with less favourable payment terms. Previously, the average contract term for a Salesforce.com subscription was between 12 and 24 months. This new strategy, however, aims to lock customers into a longer term of between 24 to 48 months. Salesforce.com “reserves the right to modify its fees and charges and introduce new charges at any time,” In 2009, the company introduced a cap of 7% on renewal price increases. Significantly, however, this cap does not apply to discounted or promotional pricing. The majority of Salesforce.com customers have some level of discounting applied to their subscription (see document on

Salesforce.com discounting policy guide). In practical terms, therefore, the cap on price increases provides minimal protection.

Automatic renewal of contract

The Salesforce.com MSA states that “Upon the expiration of the Initial Term, this Agreement will automatically renew for successive renewal terms equal in duration to the Initial Term at salesforce.com's then current fees. Either party may terminate this Agreement or reduce the number of licenses, effective only upon the expiration of the then current License Term.” Therefore, if a customer does not explicitly cancel their Salesforce.com subscription within the allocated cancellation window, they will be liable to Salesforce.com for their full contract renewal cost. And potentially at an even higher cost depending on Salesforce.com subscription rates at the time and whether they received a discount previously. This represents significant potential exposure for Salesforce.com customers. Several online blogs cite examples where customers, unaware that they authorised contract auto-renewal during the

Salesforce.com 30 day trial sign up, failed to cancel their subscription when the initial agreement expired, and became liable for the full amount of the renewal contract. Moreover, in several of these cases, collections agencies were instructed by Salesforce.com to pursue the customer for any amounts owing. One former customer comments:

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“Salesforce.com billing policies are deceptive and fraudulent. They do not disclose automatic renewal in your contract, in rep verbal conversations or rep emails, nor is it disclosed on the confirmation email you receive after purchasing your licenses.

Customer service is non-existent. Your "account manager" claims to know nothing - except he does know pressure tactics to try to sell you additional services. Really a very awful company. It was a nightmare dealing with them. Don't let salesforce.com into your business. Run from sa lesforce.com.”

No scope for reduction in subscriptions or extra services

The Salesforce.com MSA states that: “All payment obligations are non-cancellable and amounts paid are nonrefundable.” Salesforce.com provides no facility to reduce the number of subscriptions or cost of subscriptions for the duration of the contract term. Salesforce.com customers can only make these changes during the renewal window. This means that a company that reduces headcount cannot adjust its number of Salesforce.com subscriptions accordingly.

Customer data is used as leverage

The Salesforce.com MSA provides for the company to block a customer’s access to their own data in the event that the customer’s account becomes overdue. Specifically, it states:

“Suspension of Service and Acceleration: If any amount owing by You under this or any other agreement for Our services is 30 or more days overdue (or 10 or more days overdue in the case of amounts You have authorized Us to charge to Your credit card),

We may, without limiting Our other rights and remedies, accelerate Your unpaid fee obligations under such agreements so that all such obligations become immediately due and payable, and suspend Our services to You until such amounts are paid in full.

The MSA was revised in 2009, and now contains the caveat that Salesforce.com will not suspend its service if a legitimate commercial dispute arises and the customer is taking all reasonable steps to resolve it expeditiously. In practical terms, however, this offers very little additional protection to the customer as it is Salesforce.com that determines if the dispute is legitimate, and if the customer is taking all the necessary steps to resolve the issue. There are numerous examples of customers that have withheld payment because they have been incorrectly invoiced, for example, yet Salesforce.com has suspended access to their accounts and instructed collections agencies to pursue themfor any amounts owing. The suspension of service clause, therefore, could result in a lengthy and significant impact on the customer’s on-going operations and represent a serious risk to its business continuity.

No recourse in the case of service interruption

With the exception of the very largest of organizations, Salesforce.com does not provide service level agre ements. According to the MSA: “Salesforce.com's services may be subject to limitations, delays, and other problems inherent in the use of the Internet and electronic communications. Salesforce.com is not responsible for any delays, delivery failures, or other damag e resulting from such problems.” The majority of companies, therefore, have very limited recourse in the event of service outages, regardless of the nature or extent of the disruption to their business.

(6) HIGHLIGHT SUPPORT RISK

The availability of on-the-ground consulting support is essential for the success of any business critical application deployment; regardless of whether it is on-demand or on-premise. Salesforce.com operates primarily through a direct sales model and provides consulting and implementation services to its customers in areas such as business process mapping, systems integration, configuration, and project management. As Salesforce.com has grown, this direct model has not scaled effectively. Professional services coverage can be patchy; particularly outside of North America. And professional services rates tend to be at the higher end of the scale as a result. Gartner has cited this as a major shortfall in its strategy delivery. In 2007, the company launched a formal consulting and implementation partner recruitment program which introduced standardized criteria for entry and certification. Three consulting and implementation categories are now provided for: (1) registered, (2) select, and (3) premier, each with its own set of qualification criteria as detailed in the graph below.

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To date, however, this programme has failed to attract partners in significant numbers. According to

Salesforce.com there are 220 partners providing consulting and implementation services globally, and only 43 of these have attained Select or Premier Status. Additionally, since February 2010, the company has increased its developer certification requirements. Partners have six months to reach compliance; otherwise they will be delisted. This may reduce numbers further.

(7) HIGHLIGHT MARKET STRATEGY RISK

Having entered the market as a CRM provider to the SMB market segment originally, Salesforce.com has increased its focus on the enterprise space significantly over the last 5 years. Enterprise-sized companies account for a large and rapidly increasing proportion of its subscriber base, and are the driving force behind the company’s revenue growth. This aggressive push into the enterprise space dovetails with the company’s aspiration of becoming the first mainstream platform-as-a-service provider.

At the launch of its financial results in February 2009, the company stated that it now considers itself to be “the enterprise cloud computing company” rather than a “SaaS provider of CRM to SMBs”.

Salesforce.com recognizes that this is a risky strategy: “Larger customers may demand more customization, integration services, and features. As a result of these factors, these sales opportunities may require us to devote greater sales support and professional services resources to individual customers, driving up costs and time required to complete sales, and diverting sales and professional services resources to a smaller number of larger transactions…” It also acknowledges that enterpriselevel customers have vastly different functional requirements than medium-sized businesses.

Salesforce.com must, therefore, devote a larger percentage of its R&D spend to this segment which risks disenfranchising small and medium-sized customers. Additionally, Salesforce.com is increasingly prioritizing Force.com platform developments over enhancing the feature set of the core CRM application. For example, recent releases of the product have only provided minor enhancements to the product, while larger innovations such as the Chatter social networking application and the company ’s new visual workflow engine will are only available on the Force.com platform as significant, extra cost additions, rather than being incorporated into the standard CRM applications. It is likely that

Salesforce.com will continue this strategy through 2010 with areas such as analytics-as-a-service being provided as standalone, extra cost solutions on the Force.com platform rather than being part of the release

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enhancements of the CRM applications. By contrast, Sage as a company remains wholly committed to addressing the business applications requirements of small and midsized companies, while Sage

SalesLogix focuses on medium-sized companies and divisions of larger enterprises specifically. Midsized organizations have a unique combination of needs. They require a solution which provides functional breadth and depth at a competitive price point, along with a flexible and open architecture that allows them to customize, integrate, and extend the application in order to address industry and company-specific objectives. Sage SalesLogix addresses these needs comprehensively.

Competitive Sales Strategy #3 - Compete on the basis of product capabilities and user empowerment

(1) Searching and working with lists and groups

Users can spend as much as 35% of their time in a CRM system searching for information and working with lists or groups.

Sage SalesLogix provides a clear advantage over Salesforce.com when it comes to working with lookups, filters and lists; capabilities that all users rely upon on a daily basis, providing a very significant productivity advantage for the company as a whole (see Sage SalesLogix Competitive

Demo Scenarios document for a side-by-side comparison with Salesforce.com).

Salesforce.com Lookups (in the sidebar of the home screen) search against, and return results for, all standard fields associated with an individual entity, e.g. Account or Opportunity. Advanced Search gives users the capability to select and search against more than one entity. Significantly, however, neither Lookups nor Advanced Search allows a user to search against a specific field or a combination of specific fields.

For example, a salesperson is scheduled to visit Washington

State and wants to create a list of all of her accounts in the area.

Carrying out this search in Salesforce.com Advanced Search would return results for any account where ‘Washington’ is contained in any standard field e.g. street address field, account name field or description field. Additionally, because Salesforce.com does not offer picklists for states, valid results could be omitted as a result of a misspelling in the State field. For example:

 An account called ‘Barnes and Washington Attorneys’ would be included in search results although the company is based in Texas.

An account with street ad dress of ‘115 George Washington Place’ would be included in search results although the company is based in Iowa.

 An account with ‘Washington DC’ in the billing city field would be included in search results although the company is based in the DC area.

An account with ‘Referral from Jeff Washington at Abrexo Co’ in the description field would be included in search results although the company is based in Michigan.

An account with ‘WA’ in the state field would not be included in search results even though it should.

An account with a misspelling of Washington would not be included in search results even though it should.

Salesforce.com provides filters that can be applied to search results, enabling a user to filter by State for example, however, these field-specific filters must defined and applied by and administrator before a user can access them. For example, if our salesperson wanted to refine her search to prospects in

Seattle, her administrator would need to have previously setup and shared filters for the ‘city’ and ‘type’ fields in Salesforce.com. A final alternative for our salesperson is to create a new Salesforce.com ‘view’.

Views allow her to define a list against specific fields. However, views only allow her to select the fields associated with an individual entity. She, therefore, could not create a view that listed all accounts in

Seattle with escalated customer service cases. Even when a list has been created, Salesforce.com presents further

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challenges for the user. There is no preview pane or easy way to advance through a list of records; the user would have to click on the hyperlink for each record and then use the browser back button to return to the list; making it very easy to lose track of their progress. Additionally, Salesforce.com provides very limited capabilities to take actions against search results or views, e.g. scheduling a call list of accounts.

Salesforce.com users have been highly critical of the product’s advanced search and list capabilities.

On the company’s IdeaExchange site which allows users to nominate and vote on enhancement ideas, over 7,000 users have voted for Salesforce.com to improve this area of the product.

(2) Dashboards & dashboard security

Salesforce.com provides a range of simple, packaged dashboards that are presented to users through the dashboards and home tab. End users can also add dashboard components to their dashboards tab through a wizard, which surfaces data as a chart, table or gauge. Salesforce.com dashboard components are driven by their corresponding Salesforce.com reports. This limits the kind of information that can be visualized through a dashboard; particularly compared to Sage SalesLogix Visual Analyser.

If an appropriate report does not exist, the user will have to create a custom report before creating the new dashboard component; this can be very time consuming. Additionally, and more significantly, they security settings for a Salesforce.com dashboard are defined by the ‘running user’ and are not inferred by the user accessing/viewing the dashboard. This means that even if the Salesforce.com security environment prohibits a user from seeing certain information, it could still be visible through a dashboard. The only workaround for this issue currently is to create separate dashboards for every individual user. Even with a cloning tool, this could take a significant amount of time to carry out.

Salesforce.com users have also been highly critical of this security issue, with over 9,000 voting on

IdeasExchange to remedy the situation.

(3) Workflow

Salesforce.com provides the capability to capture ‘one condition, one action’ workflow, e.g. send a notification email to a salesperson when a lead is created for their individual sales territory.

Workflow is created using drop-downs in a wizard-based tool. Salesforce.com only provides for basic workflow requirements:

This means that Salesforce.com workflow cannot trigger the creation of a new account for example.

Additionally, Salesforce.com will only trigger a workflow routine where a field update has been made by a user, not a preceeding workflow routine. This means that Salesforce.com customers cannot join individual workflow routines together to cater for more complex, nested requirements.

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Salesforce.com workflow is captured through dropdown boxes, rather than graphical orchestration. The

Winter ’10 release of the product introduced the capability to represent approval workflow visually. While this allows Salesforce.com users to share proposed approval workflows with other employees in the company, it does not enable workflow to be created or edited. Salesforce.com has recently announced a new graphical workflow engine for the Force.com platform, however, it will only be available as a

$50pupm extra cost option in Enterprise and Unlimited Editions.

Sage SalesLogix provides workflow capabilities that are significantly more advanced than those offered by Salesforce.com. Sage SalesLogix leverages standards-based technologies through Windows

Workflow Foundation (WWF) rather than the proprietary tools used by Salesforce.com. Sage SalesLogix provides system administrators and super users with deep, graphically-orchestrated workflow capabilities through the Microsoft Visual Studio editor which caters for far more complex requirements.

(4) Offline access and general availability

Field-based employees require access to their CRM applications, regardless of location or access scenario. This is particularly important for sales or service functions. Salesforce.com claims “Using

Force.com Connect Offline, you can work on your accounts, contacts, opportunities, products, leads, and schedules, and activities anytime, no matter where you are.” However, the reality is that

Salesforce.com is dependent on Internet connectivity for the delivery of its applications, and its offline client is merely a poor workaround to an issue that its users face on a regular basis.

Limitations within the Salesforce.com offline client include:

Force.com Connect application utilizes a different user interface than the normal online application.

Outlook integration is not available when offline.

Custom objects are not available in Professional Edition or below.

Users must manually synchronize before going offline.

Offline access profiles can be configured by an administrator with relative ease; however, userlevel filtering is complex to administer.

Depending on the size of briefcase, changes in required data subsets and updates in SDFC data, this process can take a significant amount of time to complete.

An account created offline is uploaded to Salesforce.com during an update; however, the account must meet the user’s Briefcase criteria / profile, otherwise the account will be removed from their

Briefcase during the update.

Only accounts, contacts, opportunities or leads can be brought offline; other areas such as campaigns or customer cases cannot.

By contrast, Sage SalesLogix provides a rich, functional and consistent experience; even when disconnected from the server through the product’s remote remote client and disconnected web client.

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Salesforce.com

’s application availability issues are also compounded by forced upgrades and unscheduled service outages. Salesforce.com customers are forced to undergo application upgrades three times a year, and according to Salesforce.com

’s schedule rather than their own. As referenced previously, this can equate to several hours of downtime on each occasion.

Additionally, Salesforce.com is still prone to unscheduled service outages, as was evidenced recently (January 2010) when every instance of the product was unavailable. While full service outages are less frequent since the company’s complete infrastructure upgrade in 2007, customers continue to complain of on-going outages and performance variations, particularly with regard to the co mpany’s Outlook Edition API.

The majority of companies using Salesforce.com, therefore, have very limited recourse in the event of service outages, regardless of the nature and extent of the disruption to their businesses.

(5) Outlook integration

In Salesforce.com, integration with Microsoft Office Outlook is facilitated through a plug-in that is downloaded and installed on the user’s laptop or desktop. This allows users to synchronize their contacts, activities and tasks between Outlook and their CRM application. However, because

Salesforce.com synchronizes with the individual user’s Outlook client, rather than their company’s mail server, there are several issues:

It is very difficult for the customer’s IT department to administer these plug-ins centrally and ensure that considerations such as IT security are being addressed appropriately.

Synchronization of contacts, email, activities and tasks can only take place while the user is working with their Outlook client. If they are using Outlook Web Access, for example, or a mobile email client, or a device other than the one where their plug-in is installed, synchronization cannot occur.

By contrast, Sage SalesLogix offers both client side (Intellisync) and server-side (Exchangelink) integration for Outlook users, providing companies with maximum flexibility when it comes to managing their contacts, activities and tasks. Furthermore, Sage SalesLogix Advanced Outlook

Integration provides users with extended capabilities such as the ability to: save notes/history in a contact record, save e-mail attachments to Sage SalesLogix, drag and drop from Outlook Inbox to

Sage SalesLogix history, use Sage SalesLogix address book in Outlook e-mail, attach documents from Sage SalesLogix Library in an Outlook e-mail message, and attach a Sage SalesLogix Contact vCard in Outlook e-mail.

(6) Data management tools

Salesforce.com does not provide active de-duplication capabilities or pick lists for States or Provinces out-of-the-box. While these are incidental capabilities, they can have a significant overall impact on data quality. Salesforce.com customers, for example, must purchase an AppExchange add-on solution such as DupeBlocker® in order for the system to check for duplicates automatically when a user enters of edits a record. Without this capability, duplicate records will undermine the overall integrity of the data in the system. This capability should be provided as standard within

Salesforce.com. Additionally, because most editions of Salesforce.com impose a limit on the maximum number of AppExchange or custom solutions that a customer can add to their instance: 5 in the case of Professional Edition and 10 in the case of Enterprise Edition, a customer will potentially have to forgo other capabilities in the future because of this gap in the core Salesforce.com feature set. Pick lists for States or Provinces cannot be added to Salesforce.com. Therefore, as described previously in the section on searching and working with lists, misspelling or abbreviations can limit the effectiveness of certain search types.

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(7) Support for key sales processes

Lead management

Salesforce.com only provides very basic lead management capabilities. Leads can be imported and assigned to sales staff according to basic routing rules. A lead can subsequently be converted into an account, contact or opportunity, but loses its activity history upon conversion. By contrast, Sage

SalesLogix provides rich lead management capabilities. Sage SalesLogix ’s Process Orchestrator can be used to capture and automate complex lead allocation rules. Each salesperson works with their own lead management workspace that allows them to progress efficiently through their leads and filter according to specific criteria. Sage SalesLogix also provides fully configurable lead qualification and scoring capabilities, to ensure that sales staff focus on leads that represent the greatest opportunity for success. Importantly, all history and notes are carried over when a lead is converted to an opportunity ensuring full transparency throughout the cycle.

Support for custom sales processes

Salesforce.com provides a single sales methodology out of the box that has 10 specific sales stages along with their associated probability. Individual stages can be removed, but stage names or percentages cannot be changed. New stages cannot be added unless the company has purchased an extra sales methodology from AppExchange (e.g. Miller Heiman, Solution

Selling, the Complex Sale Inc or TAS Group). By contrast, Sage

SalesLogix allows companies to fully customize their sales process within the product, ensuring that their CRM application fully reflects the sales stages, definitions and probabilities used by the company.

(8) Support for a highly personalized and productive user experience

Providing users with the freedom to fully personalize their individual experience within Sage

SalesLogix is one of the product’s most powerful attributes. And the extension of these capabilities through to the web client makes it an even more compelling proposition when compared to

Salesforce.com. With features such as: the middle pane, drag and drop tabs, timeline visualization, fully configurable personal workspace, a filters sidebar, right-click menus throughout the product, summary views and flexible forms design, Sage SalesLogix provides a significant productivity advantage for users. Salesforce.com, by contrast, provides only very limited capabilities in this area.

For example, it allows limited end user personalization on the Home screen only. Administrator rights are required to make changes elsewhere in the application; right-clicks are not supported in the product and will only present the browser menu; filters must be individually activated by the administrator. And tabs are only used in a very limited way. In recent Keystroke Level Modelling testing, it took 16% less time to carry out a range of common tasks in Sage SalesLogix compared to

Salesforce.com (for further information see Sage’s usability whitepaper). This can equate to a saving of several hours over the course of a week.

Summary of Recent Product Releases and Company

Announcements

(1) Roundup of recent Salesforce.com company news:

• Launched Chatter - collaborative tool for the enterprise will be generally available in 2010

• Signed Adobe partnership – rich internet applications, provides greater offline capabilities and reduces some of the vendor lock-in perceptions about Salesforce.com

• Opened datacentre in Singapore - 1st outside of North America

• Force.com adoption rates are up – Salesforce.com claims 125,000 apps, 200,000 developers.

• FinancialForce.com is launched in partnership with Unit 4 Agresso

• Marc Benioff speaks at Oracle OpenWorld about the peaceful co-existence of on-demand and on-premise software

• Apps.gov website launched in North America; storefront powered by Salesforce.com

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• Contact Manager Edition launched – limited to 2 users.

• Dell enters into referral partnership with Salesforce.com

• BMC made a number of its applications available on Force.com - joins companies like CA leveraging the Force.com platform

(2) Roundup of recent Salesforce.com product releases:

Spring ’10 (February 2010)

• Quotes – allows users to create sales quotes from within Salesforce.com. Changes to quote information is synchronized back into Salesforce.com opportunities to ensure that pipelines and forecasts are always up-to-date

• Dashboards – support for up to four columns in table-based charts within the dashboard.

Previously, there was limit of 2 columns. Allows users to capture more information in a single chart

• Invites – event invites sent out from Salesforce.com can now be branded with the customer’s company logo

• Email preview – enables users to preview email templates before they are sent out

• Mobile – Mobile Lite available to all editions. New filter and search bar added to full client. Wifi support has been added

• Contact centre support – on-screen entitlements and service contract status enables contact centre users to determine the customer’s current SLA / entitlements

• Adobe flash builder for Force.com – enables users to create custom apps and add-ons using

Adobe. Claims to offer rich internet applications and facilitates offline use. Likely to see more of this in the core CRM application in future releases.

Winter

’10 (September 2009)

• Workflow – workflow can now be represented visually in a flow chart, but workflow cannot be created or edited visually.

• Mobile – mobile client now supports Salesforce.com Content attachments e.g. Word docs and

Powerpoint. The mobile client now also includes a notes tab.

• Charts – support for combination charts is now available. Drilling down in charts will bring the user directly to the filtered version of the underlying report.

• Lookup filters – filters can be added by a system admin to the advanced search area to allow search results to be filtered by a particular field value (free text, not picklists). This feature is still in Beta due to a number of known issues.

• Campaigns - campaign activities types (e.g. email / event) will automatically determine page layout for that particular activity type; custom fields etc. Rolled up campaign summaries have also been added.

• Salesforce to Salesforce – allows a company to send out an email to its partners to see if they are

Salesforce.com users. If so, they can establish a Salesforce to Salesforce connect for partner relationship management.

• Salesforce Content - enhanced content viewer. Users can send a URL out to external party or an internal user that allows them to preview the document without downloading it. It also allows the user to track how many times the document has be accessed / viewed etc. Support for Office

2007 has been added to content searches.

(3) Additional Materials Available for Partners to Download

• Competitive Bootcamp presentation - Sage SalesLogix v Salesforce.com

• Complete guide to handling and setting competitive objections

• Sage SalesLogix v Salesforce.com TCO calculator

• Sage SalesLogix v Salesforce.com Competitive Battlecard

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Summary of Competitive Sales Strategy

Compete on the basis of cost and usage restrictions

Expose the feature gaps in Salesforce.com Professional Edition

Professional Edition is the most commonly deployed Salesforce.com edition

• Key features not available as standard

Access to web services API, workflow, field-level security, marketing campaign management, territory management and team selling not available as standard, and cannot be purchased as an add-on

Offline and mobile access can be purchased as add-on services, but they increase the subscription cost significantly

Sage SalesLogix Standard or Advanced Editions provide richer feature sets for the same price as

Salesforce.com Professional Edition

Expose the cost of add-on services

Marketing campaigns

– extra $15pupm for Professional Edition

Product catalogue

– extra $10pupm for Professional Edition

• Offline access – extra $25pupm for Professional Edition

Mobile access

– extra $50pupm for Professional and Enterprise Editions

• Visual workflow - extra $50pupm for Enterprise and Unlimited Editions

Sage SalesLogix offers a far stronger value proposition compared to Salesforce.com in terms of add-on capabilities such as mobile access and business intelligence. Many of these capabilities are provided as standard within Premium Editions of the product.

Highlight the issues around storage

• Standard allocation is very low on Professional and Enterprise Editions

Additional storage is $3000 per GB per year

• Salesforce.com’s own recommendation is that companies routinely delete / archive files and attachments to reduce storage usage

• Customers can leverage their existing storage infrastructure for Sage SalesLogix on-premise or benefit from significantly higher storage allocations through SalesLogix Cloud; either way, they are not penalized for usage.

Educate your prospect on the true TCO comparison timeframe

• 5 years is the current lifecycle for a CRM application

Ensure you carry out a TCO comparison over 3 years at a minimum

• Use the Sage TCO comparison tools to show the calculations

Sage SalesLogix provides a significant TCO advantage when compared to Salesforce.com over 3 to 5 years

Use sample cost comparison scenarios

• Compare the difference in cost between SalesLogix and Salesforce.com over 3 to 5 years

Add extra cost components such as offline, marketing campaigns and mobile to the cost of Professional

Edition

Add Mobile, additional storage and visual workflow to the cost of Enterprise Edition

• Compare the TCO of Enterprise and Unlimited Editions with SalesLogix Premium bundles

Highlight higher rates for Salesforce.com professional services

Most companies will require some level of professional services from Salesforce.com or one of its partners for activities such as project scoping, data migration, configuration, customization and integration.

Patchy Salesforce.com professional services and partner coverage on the ground means that customers will struggle to locate local expertise, and likely to have to pay higher market rates; equivalent to those for tier 1 applications - $250 per hour, as a result

• Sage SalesLogix is supported locally and internationally by a large network of certified partners that specialize in the product, ensuring the available of local resources when needed and at a reasonable rate.

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Highlight additional restrictions imposed by Salesforce.com

• There are limits on custom entities

There are limits on custom tabs

There are limit on the daily volume of mass email

• There are limit on the number of custom / AppExchange apps

Sage SalesLogix allows customers to get the very most out of their CRM system without worrying about arbitrary limits and restrictions

Competing on the basis of business risk

Highlight restrictions in deployment method and platform

• No option of on-premise

Risk of scheduled and unscheduled downtime

• No service level agreements

• Security considerations outside of the customer’s control

• Cannot bring on-premise in the future if there is a change in business requirements

• Salesforce.com’s multi-tenant architecture makes it more difficult to implement or change compliancy measures as a result of changes in the regulatory environment, e.g. HIPA

• Companies run the risk of underestimating the amount of professional services and administrative support that is required to roll out and maintain Salesforce.com, particularly in larger or more complex deployments

Sage SalesLogix provides companies with the choice of having their CRM application on-premise, hosted by a certified Sage partner or hosted by Sage through our Cloud offering. And, should they need to, customers have the choice to change deployment type downstream.

Proprietary platform lock-in and customization challenges

Apex is a non-standard platform

• Any development carried out within Apex cannot be taken outside of the Force.com platform

Adoption of platform remains relatively low and Gartner rates it as unproven

• Multi-tenanted architecture means that development must adhere to Apex Governors and 75% test compliancy before development can be moved from the test environment to production.

• Currently, custom developments cannot be automatically transferred from the test to the production environment; they must be re-created

• Sage SalesLogix is built on a modern, standards-based architecture that allows companies to leverage more of their existing IT assets and development resources

Limits on extensibility

• Limitations on the use of AppExchange or custom apps are imposed in every edition apart from Unlimited

• Max of 5 add-ons in the case of Professional Edition

Max of 10 add-ons in the case of Enterprise Edition

• Sage SalesLogix is fully extensible, regardless of the edition

Data lock in

Very difficult to get your data out of Salesforce.com at the end of the contract

• Data is exported from Salesforce.com in csv flatfiles, with an individual csv file for each entity.

An average customer will have to contend with over 40 separate csv files

• It can be very difficult to reconstruct a database from these files

Additionally, Salesforce.com uses 15 character, case sensitive serial IDs that cannot be used by many common database management tools

Sage SalesLogix customers can use a Microsoft SQL Sever or Oracle database; they own their database, not just the data in it, and have complete control over how they want to use it in the future

Burdensome contract obligations

Automatic acceptance of Salesforce.com terms and conditions during the trial sign up process

• Payment upfront, lengthy contract terms and uncapped price hikes

Automatic renewal of contract upon expiry

• No scope for reduction of licenses or additional services during the contract term

Customer data used as leverage

• Collections agencies used extensively

• No recourse in the event of service interruption

Sage

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SalesLogix offers flexible deployment models and transparency in licensing and subscriptions models, ensuring that customers can chose the best option for their companies and have a predictable ownership experience over the lifetime of their application

Support risk

Salesforce.com PSG coverage is still patchy

Despite an attempt to revamp its implementation/consulting partner programme, the number of certified partners remains low

– 220 globally and only 43 of these have attained Premier or Select status

• Limited availability of PSG resources has pushed services rates into the higher end of the spectrum, e.g.

$250 per hour.

• Sage SalesLogix is supported locally and internationally by a large network of certified partners that specialize in the product, ensuring the available of local resources when needed and at a reasonable rate.

Market strategy risk

• Enterprisesized companies represent a significant and growing proportion of Salesforce.com’s installed base.

• Small and mid-sized businesses have become less of a priority for the company

Salesforce.com is shifting R&D investment away from the core CRM applications and into the Force.com

Cloud platform

• Many of Salesforce.com’s newest and most significant product / service introductions are only being delivered as standalone applications for Force.com platform, rather than being incorporated as standard within the core CRM applications, e.g. Visual Process Manager and Salesforce.com Chatter

• Sage SalesLogix focuses on medium-sized companies and divisions of larger enterprises, and provides functional breadth and depth at a competitive price point, along with a flexible and open architecture that allows them to customize, integrate, and extend the application

Competing on the basis of product capabilities and user experience

Searching and working with lists

In Salesforce.com, users cannot search against a specific field, e.g. State/Province, in a sidebar or advanced search

The only advantage of advanced search over the sidebar search is that you can search across more than one entity

Any search return results for all fields

• Filters can be applied to search results, but each individual filter must be enabled by the administrator first.

You can only filter after the search

– not as part of it

• Picklists for states are not provided as standard so misspellings or abbreviations will be missed by the search

• A Salesforce.com View allows the user to search against a specific field, but a View can only be created against a single entity. A user, for example, could not search for all customers in Washington State that have an escalated service ticket currently

• Anything very complicated requires a report

Within a list, there is no preview pane or easy way to advance through a list of records; the user would have to click on the hyperlink for each record and then use the browser back button to return to the list; making it very easy to lose track of their progress.

• Salesforce.com provides very limited capabilities to take actions against search results or views, e.g. scheduling a call list of accounts.

• Sage SalesLogix provides some of the most powerful capabilities in the market when it comes to searches and working with lists and groups, and offers a significant productivity advantage to users when compared to

Salesforce.com

Dashboards and dashboard security

Salesforce.com dashboards can only surface charts from reports

• If an underlying report does not exist, the user will have to create the report before creating a new dashboard

• Salesforce.com users are limited in the type of information that they can present as a dashboard.

Salesforce.com dashboards inherit the security settings of the user that creates the dashboard, rather than the user viewing it. This represents a significant security issue for companies.

The running user must be changed to the viewing user every time that the dashboard is cloned, otherwise, the dashboard could circumvent the security settings of the application

• Sage SalesLogix provides more flexibility in terms of the type of information and charts that can be surfaced as

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dashboards when compared to Salesforce.com, particularly through Sage SalesLogix Visual Analyser extension.

Workflow

• Salesforce.com has recently introduced a new graphical workflow engine for Force.com. It is currently only available as a $50 extra cost option in Enterprise and Unlimited Editions

Salesforce.com standard workflow is extremely limited

It is limited to one condition, one action workflow, and actions are restricted to: creating a task, sending an email alert, updating a field or sending an outbound message

It cannot be used, for example, to create an account

• Workflow can only be triggered by a user update. Workflow cannot be triggered by other workflow routines, and this significantly limits the level of complexity that can be captured in Salesforce.com

• Workflow can be represented graphically for review purposes, however, workflow routines are captured through drop down text boxes

• Sage SalesLogix Process Orchestrator is provided as standard within the product and provides a powerful workflow engine that allows companies to capture and automate a wide range of processes, regardless of their complexity

Offline access and general availability

Force.com Connect application utilizes a different user interface than the normal online application.

• Outlook integration is not available when offline.

Custom objects are not available in Professional Edition or below.

• Users must manually synchronize before going offline.

• Offline access profiles can be configured by an administrator with relative ease; however, user-level filtering is complex to administer.

• Depending on the size of briefcase, changes in required data subsets and updates in SDFC data, this process can take a significant amount of time to complete.

• An account created offline is uploaded to Salesforce.com during an update; however, the account must meet the user’s Briefcase criteria / profile, otherwise the account will be removed from their Briefcase during the update.

Only accounts, contacts, opportunities or leads can be brought offline; other areas such as campaigns or customer cases cannot.

Outages remain a fact of life for Salesforce.com customers with the most recent occurring in January when every instance of Salesforce.com was offline for a number of hours

Salesforce.com customers must also plan around scheduled maintenance for upgrades etc, when the application can be offline for several hours

Sage SalesLogix provides an entirely consistent experience regardles s of the customer’s access scenario: online, offline or mobile

Outlook integration

Salesforce.com only provides client-side integration for Outlook

• If a Salesforce.com user accesses their email through Outlook web access, a mobile client or by using a device other than the one where they have installed the Salesforce.com Outlook plug-in, they will not be able to synchronize back to their CRM system

• Because each individual Salesforce.com user has to download, install and maintain a plug-in on their device, this can be a significant burden for them and the company’s IT department who must ensure compliancy with IT and security policy

SalesLogix provides client and server-side integration for Outlook, ensuring that companies have the best solution for their needs

Data management tools

Active duplicate checking tools are not provided out-of-the-box with Salesforce.com, they must be purchased as an add-on through AppExchange

Without active duplicate checking capabilities, users could enter multiple versions of the same account or contact for example. This will undermine the overall integrity of the customer’s database

Purchasing an active duplicate checking tool reduces the number of further AppExchage / custom apps that can be added to the installation (limits imposed by edition)

Pick lists for States / Provinces cannot be added to Salesforce.com

• This means that abbreviations and misspellings, for example, will result in incomplete and inaccurate search results

Pick lists and dynamic duplicate checking are standard features across the entire Sage SalesLogix

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application.

Lead management tools

Salesforce.com only provides very basic lead management capabilities.

• Leads can be imported and assigned to sales staff according to basic routing rules.

A lead can subsequently be converted into an account, contact or opportunity, but loses its activity history upon conversion

Sage SalesLogix automates lead allocation rules. The product provides fully configurable lead qualification and scoring capabilities. And all history and notes are carried over when a lead is converted to an opportunity ensuring full transparency throughout the cycle

Support for custom sales processes

• Salesforce.com provides a single sales methodology out of the box

Individual stages can be removed, but stage names or percentages cannot be changed or new stages added unless the company has purchased a sales methodology from AppExchange

Sage SalesLogix allows companies to fully customize their sales process within the product, ensuring that their CRM application fully reflects the sales stages, definitions and probabilities used by the company.

Support for a highly personalized and productive user experience

Salesforce.com allows limited end user personalization on the Home screen only

• Administrator rights are required to make the majority of changes elsewhere in the application.

Right-clicks are not supported in the product and will only present the browser menu

• Filters must be individually activated by the administrator.

• Tabs are only used in a v ery limited way, and cannot be dragged and dropped into the user’s preferred position

• With features such as: the middle pane, drag and drop tabs, timeline visualization, fully configurable personal workspace, a filters sidebar, right-click menus throughout the product, summary views and flexible forms design, Sage SalesLogix provides a significant productivity advantage for users

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