PDF: 2962 pages, 5.2 MB - Bay Area Council Economic Institute

Global Reach
As noted elsewhere in this section, India is a challenging market
for traditional software firms: there are nearly as many developers
and programmers as customers; skilled technicians jump from
company to company, taking knowledge and training with them
and freelancing along the way; resellers play rival brands off one
another to bump up the financial incentives; price-conscious business
owners look first for their “enterprise solutions” from a family
friend or employee’s cousin.
Large players like Sun, Oracle, or SAP frequently give their technology
to government enterprises, universities, or other institutions,
looking to become the industry standard in certain large niche
markets and to build a critical mass of users and programmers of
new, localized applications. Software firms shifting R&D and
programming to India speak of “concentric circles” or “peeling an
onion from the outside in,” in describing how they decide the division
of labor—what portion of the work stays in Silicon Valley and
what portion moves to India.
Salesforce.com has so far bypassed most of those considerations
since it seriously jumped into the India market in 2006.
Salesforce.com offers customer relationship management (CRM)
software that businesses can access over the Internet. The software
resides on Salesforce.com’s servers and can be accessed by
users from anywhere in the world. This model of delivering software
is referred to as software-as-a-service (SaaS).
Under the SaaS model, businesses sign up for subscriptions rather
than buying packaged software, installing it and running it. The
Salesforce program manages customer and sales lead data,
schedules appointments, tracks projects, and generates sales
performance and other analytics, all from the company’s servers.
More than 55,000 companies and 1.5 million users worldwide
employ the service in 16 languages. With no boxed CDs in the
public realm, Salesforce.com’s code is protected. A relatively steady
income stream from subscriptions replaces one-time sales and
costly upgrade rollouts.
As demand for CRM and other IT services begins to spread into
Tier 2 and 3 cities and among small and medium-sized enterprises
in India, Salesforce.com has made inroads against traditional
enterprise software providers like Oracle and SAP. Salesforce.com,
founded in 1999 by former Oracle executive Marc Benioff and
three partners, began selling into India through its Singapore office
in late 2006. “The software-as-a-service message resonates
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