Salesforce.com's Chatter Enters General Release

Salesforce.com's Chatter social collaboration platform became generally available Tuesday, with the vendor hoping to spur adoption beyond sales workers to entire enterprises via a low-cost licensing option.

The release follows a private beta that started in February, and months of hype prior to that. Salesforce.com and its brash CEO Marc Benioff plan to continue the trend during an event scheduled for Tuesday.

But Chatter may be deserving of the extended hoopla, given the reported response so far from customers. One hundred companies initially took part in the beta, but after "overwhelming demand" it was expanded to more than 5,000, Salesforce.com said. Ninety percent of the beta testers said they would recommend Chatter to others, the company claims. Users also experienced double-digit productivity gains, according to a statement.

Company spokesman Kraig Swensrud couldn't say how many of those beta customers will convert to paying ones, but indicated the number is healthy.

Chatter incorporates a range of familiar, Facebook-like social networking features, such as document sharing, groups, profiles and information feeds, but applied to a business context, said Swensrud, who is senior vice president of product marketing. "You don't follow Ashton Kutcher, you follow colleagues and deals and other things that are important to you at work."

The application's Facebook-like environment has been received enthusiastically, Swensrud said. "The rollout of a new enterprise app is usually painful. Chatter is the opposite."

Salesforce.com is also planning to use Chatter to court partners, who can embed and integrate the functionality in their own custom applications built with Force.com, Salesforce.com's development platform.

Chatter is available at no additional charge for paid user licenses of Salesforce.com's CRM application and Force.com.

Additional Chatter-only licenses are available at US$15 per user per month for customers that are using the Professional, Enterprise or Unlimited Editions of Salesforce.com. It was not immediately clear whether non-Salesforce.com customers will be able to purchase Chatter licenses at some point.

Social collaboration software can arguably generate copious amounts of data, particularly multimedia assets such as videos. But customers have little to worry about in terms of increased costs for data storage, Swensrud said. "We've put in a data storage model with Chatter that we think is quite healthy," although customers can purchase more if desired, he said.

Swensrud could not immediately provide details on how much storage is allotted under the base pricing model. But he stressed that "Salesforce.com doesn't want to be in the business of charging for data storage."

But the company clearly wants to shed any remaining image it may have as a pure-play CRM company. To that end, with Chatter Salesforce.com can show the market it can innovate in nimble fashion, according to one industry observer. "The story is they went from concept to market in eight months, which is not bad for a large software company," said Altimeter Group analyst Ray Wang.

There's a clear strategy behind the Chatter-only license option, according to Denis Pombriant of Beagle Research.

"Salesforce.com's primary thing to sell is a seat. The more seats the better," he said. "At $15 a month they're making much more than it costs to put up a seat, and it's giving them the opportunity to upsell into accounts where they've already done well. That's a smart move."

Reserving Chatter access to existing Salesforce.com customers has certain benefits for the vendor, said 451 Group analyst China Martens via e-mail. "That way, they can probably keep more of a handle on Chatter's growth and retain the focus on internal collaboration enablement."

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris's e-mail address is Chris_Kanaracus@idg.com

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