Can salesforce.com Talk Its Way to Bigger Profits?

Give salesforce.com (NYSE: CRM  ) credit. No one names a conference better.

At this year's Dreamforce confab, CEO Marc Benioff took the wrappers off a cloud-based collaboration system called Chatter. Not just a social network for salesforce.com users, Chatter proposes to blend feeds with document sharing and business intelligence.

To Benioff, the combination seems like a no brainer. "Why do I know more about strangers on Facebook than my own employees?" he said in a press release.

Social hour for business software
It's a fair question. Twitter, now worth $1 billion, and Facebook, with its 350 million users, have become ad-hoc business tools with coattails. For example, Silicon Valley's top private equity investors have never been more interested in LinkedIn, a spiffy social network for the business class.

These money movers sense a shift. They see the Social Web as a noisy network that sometimes obscures real intelligence. Benioff wants more of the intelligence and less of the noise. He also wants to enable relevant connections between people, in context. Chatter is designed to achieve that. Here's how.

  • Profiles. Here's where Chatter most resembles Facebook or LinkedIn. The system's "profiles" ask users identifying information that, in the context of the whole, becomes searchable. That way, employees can more easily find and follow people who can help them create value or solve a problem.
  • Updates. Chatterers can also be tweeters. Specifically, the software allows users import their Facebook data and useful Twitter searches, and includes a status update window of its own. Used well, Chatter could reduce the need for conference calls and lengthy email threads.
  • Feeds. Here's where Chatter gets most interesting. Everything in the system has a feed for users to follow. So, for example, if a customer spreadsheet that exists in the network is germane to your work, you can follow it and get notified when someone updates it. In Chatter, even documents and data tweet.

Interested yet? I'll admit to being fascinated by what Chatter could offer to salesforce.com customers, but I'd be remiss if I didn't concede something fundamental: collaboration tools aren't new.

Rewind to fast forward
Surely you remember groupware, an industry term that referred to suites of networked collaboration tools meant to unite teams and enhance productivity. Novell (Nasdaq: NOVL  ) has been selling GroupWise for more than 20 years. IBM (NYSE: IBM  ) still calls Lotus Notes collaboration software. And Microsoft (Nasdaq: MSFT  ) has SharePoint, arguably the most popular buy-and-install collaboration platform available today.

salesforce.com is introducing Chatter into a market that has been talking about collaboration since the early days of tech. Why should anyone care, and why now?

Interestingly, some of the smart guys over at ZDNet put a similar question to salesforce.com co-founder Parker Harris earlier this week. See the full video here. My favorite quote of the interview: "This is about enabling relevant conversations in the enterprise."

Tweeting for cash
In other words, salesforce.com sees money in getting more people talking. Twitter boasts a similar value proposition. Coincidence? I doubt it.

In the meantime, while Chatter isn't as unique an idea as the boisterous Benioff might have us believe, it's still a threat that Oracle (Nasdaq: ORCL  ) and NetSuite (NYSE: N  ) should take seriously. SAP (NYSE: SAP  ) may have less to worry about, if only because it's a salesforce.com partner and featured in the Chatter demonstration video. Either way, salesforce.com is using the social tools of the day to add more value to its customers, and that's ultimately good for investors.

But that's also just my take. Now it's your turn. Does Chatter make you more or less inclined to buy shares of salesforce.com? Please take a moment to vote in the poll below. You can also sound off by leaving a comment. We'd love to hear from you.

Microsoft is an Inside Value pick. salesforce.com is a Rule Breakers recommendation. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Tim Beyers owned shares of IBM and Oracle at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool owns shares of Oracle and is also on Twitter as @TheMotleyFool. The Fool's disclosure policy is burning up with a wicked case of dance fever.


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