Will HubSpot be the Next Salesforce.com?

I had the opportunity to visit the HubSpot offices in Cambridge, Mass. the other week.  As I was leaving the building, the thought came to mind that, from a business model perspective, I may have just walked out of the next Salesforce.com.  A variety of parallels immediately jumped into my mind.

Creation of a New Category

Over eleven years ago, Salesforce.com created the category of what was then known as Software as a Service or SaaS.  HubSpot has created the category of Inbound Marketing.  To Salesforce.com’s credit, they also created an entire industry.

A Platform for Sales Growth

Both companies developed a platform that helps companies sell more stuff.  Salesforce originally did it by better organizing sales efforts and sales execution, and has since expanded into other areas.  HubSpot is doing it by attracting more site visitors and generating more leads.  In fact, the two applications are complementary — there’s a bi-directional integration available on Salesforce’s appexchange.

Widespread Appeal

Just as almost any company that sells a product or service needs CRM, almost any company that sells a product or service needs ways to generate more leads.  Just as Salesforce hosts mom and pop shops on the same instance as companies with thousands of users, HubSpot can address companies of all sizes.  For a small company on the Small version, use of HubSpot’s Content Management System (CMS) is required.  However, larger companies can leverage just specific parts of HubSpot’s offering without having to move their entire site to HubSpot’s CMS.

A Substitute for the Normal Way of Doing Things

Salesforce disrupted the client/server computing world and HubSpot is disrupting the traditional way of managing Web sites and content.  There remains a very large number of companies that have beautiful Web sites with virtually no marketing effectiveness.  HubSpot is disrupting the traditional “glamor site” approach and can even tell you why beauty isn’t necessary.

“Seems Expensive”, But Isn’t Really

To a lot of the marketplace, Salesforce.com initially “seemed expensive”.  When a company could purchase a contact manager for a one time cost of $150, an ongoing annual subscription of many times this amount felt, well, expensive.  However, when companies started to look at the costs of the underwater part of “iceberg” of traditional systems and the benefits provided by Salesforce, it stopped seeming so expensive.  Plus, Salesforce upped the ante on end-user engagement and training, which made their application even more effective than traditional ones and further justified the cost.

When a company can host a Web site for almost free and plug in or access a bunch of free resources, why spend thousands of dollars every year for HubSpot?   The argument is similar to what it was for Salesforce.  There are a large number of soft costs just below the water’s surface when a company’s marketers try to consolidate, manage and understand all the components of an effective Web presence by themselves.  Components such as: keyword research; Web analytics; site visitor tracking; blog setup and maintenance; social media integration; drip marketing; and landing pages with forms that feed into — yes — Salesforce.com.  Just as Salesforce better educated users and administrators on the effective use of CRM, HubSpot provides a deep education to customers on all the components related to “being found”.

Massive Marketing Reach

Both companies have a huge marketing reach.  As a younger company, Salesforce.com almost perfectly leveraged the marketing channels of the day.  HubSpot, by simply eating their own caviar (“dog food” has become overworked), is doing a phenomenal job of leveraging today’s marketing channels, including blogging, video and social media.

A Strong Sales Team

When a company has created a new category, has an excellent platform with proven benefits, and has a huge marketing reach, that just leaves two things — closing new business and retaining customers.  Salesforce grew quickly by hiring a large and talented sales team.  They made their application very sticky, so that there’s little motivation for a customer to leave.  All indications are that HubSpot is following suit on both fronts.

Growing a Channel and Creating Alliances

Both companies spent the first few years getting their internal house in order and then turned to the channel for value add.  Both companies continue to sell deals only through their own account executives, but both look to the channel for consulting, integration and other values adds.

Count me in as a fan and hopefully as a participant.  This is going to be a fun story to watch.

Business Collaboration with Google Docs & Sites

Google has been actively touting the collaboration features of Google Apps and has developed some excellent marketing content around the various components of Google Apps.  But, what are some specific, real world examples of how Google Docs and Google Sites can be used for collaboration in business?

As a CRM consulting company with employees in different locations along the west coast, collaborative tools are very important to our overall efficiency and our responsiveness to customer needs.  Here just a few of the ways we collaborate using Documents and Sites within Google Apps Premier Edition.

Using Google Sites to Manage Projects

With Google Sites, we can set up a Site for each customer.  Each customer Site is shared with everyone within our company.  Within a Site, one or more projects is set up for the customer.  Within a project we’ve created template pages for areas such as:

• The project summary
• The customer’s CRM functional requirements
• The data migration scripts that were used
  
• An embedded spreadsheet for managing a punch list of open issues
• A link to a folder that contains all project related Google Docs ranging from Statements of Work to training documentation

Subscribing to a Site or a page generates an email with every single change, which makes the notifications impractical if frequent changes are made.  An option for a periodic digest email would be a good enhancement.

We also plan to replace our Twiki content with Google Sites, as Sites is a more user-friendly option and we don’t need to worry about managing uptime as we do with our Twiki.

Google Spreadsheets for Collaborating on Open Items

A Google spreadsheet has proven to be a very effective mechanism for creating a list of open items or issues that need to be addressed prior to a CRM cutover (or even post cutover).  As a project manager/business analyst is logging issues found during his/her own testing or from customer feedback, a developer can be simultaneously viewing the same spreadsheet and tackling new issues as they are added as new rows in the spreadsheet.

If someone needs to be nudged to check the spreadsheet, an editor can send a friendly reminder email right from within the spreadsheet to one or more of the other collaborators.  This list can also be shared out to customer contacts who already have a Google login or who don’t mind creating one.

Leveraging a Google Presentation to Collaborate on Application Testing

Taking the spreadsheet concept one step further, a shared Google presentation can be used by an application tester to include both text and screen shots to communicate needed fixes or changes to a developer.  It’s very easy to take a screen shot of a problem area and the upload the screen shot to a slide along with text annotation.  Crystal clear communication can be provided to the developer.

It does not seem that Google Apps Videos can be embedded within Google Presentations yet, but we hope that feature is added down the road.  The ability to have a full motion explanation of an issue is occasionally needed — this is currently be accomplished by attaching an MOV or MP4 screencast to a GMail or by setting up a quick GoToMeeting.

These are just a few of the ways we’ve found that Google Docs and Sites can be used for collaboration.  What are some of the ways that your organization collaborates with Google Apps?

The “World is Flat” Google Infrastructure

It’s easy for a user of free GMail or of Google Apps Standard or Premier Edition to take for granted the massive and highly sophisticated infrastructure behind what’s on their screen.  In fact, most people don’t really have any reason to think about what’s behind their user experience, any more than they care about what’s generating the electrical power that runs lights and appliances inside their house — as Nicholas Carr points out in his book, The Big Switch.

The people who are evaluating Google Apps for their organization are the ones who do care about what’s under the hood.  Google’s infrastructure, of course originally designed for search, is very different from the way in which traditional IT environments are structured. While the term “cloud” is an excellent metaphor for utility computing that’s served up from somewhere out in the ether, Google’s infrastructure is very much terrestrial, and it covers a lot of ground globally.

As a basis of comparison, let’s look at the environment that many Google Apps customers have come from — Exchange Server. With Exchange Server, each user within an organization typically connects directly to a single physical or virtual box from their Outlook client. There’s usually drive redundancy, such as RAID-10, built into that server (or group of servers) and then the server is in turn, backed up.  There’s nothing inherently wrong with this environment (as long as a proper disaster recovery plan is in place), and Exchange Server is an extremely robust application.  However, one perspective on this structure is that all users are connected up to a mother ship — a form of parent/child relationship.

In many ways, Google Apps is on the complete other end of the spectrum.  Users are wired into a very large, global infrastructure and data are widely distributed through Google’s Bigtable database and accompanying file system.  When a user sends an email, the write is to a number of different drives that are located in different physical locations — often on different continents.

What does this architecture translate into for practical purposes?

Google Apps Uptime

This architecture allows Google to guarantee 99.9% uptime for Google Apps Premier Edition.  As we all know, for email, users’ downtime tolerance thresholds are very low.  Email downtime can be very costly depending upon when it happens.

Application Cost

All Google Apps customers are on one, very large instance of Google’s application.  This makes for significant economies of scale in terms of sharing physical resources.  In addition, Google has designed their data centers around cheap, commodity hardware and free software — which makes their incremental expansion costs relatively inexpensive.  This allows Google charge only $50 per user per year for Google Apps Premier Edition — and presumably their financial people have run the numbers on this price point.

Google Apps Upgrades

The single, multi-tenant instance also means that upgrades are frequent and transparent, compared to event-based upgrades in a legacy environment.  Customers don’t have to pay anything extra for upgrades – they just happen in background.  Innovation occurs very quickly and newly released innovations are usable immediately.

Collaboration

Google Sites, which is part of Google Apps, can take the place of a wiki.  For example a Google Site can be used to collaborate on a project or on a set of best practices.  Google continues to enhance the more traditional document, spreadsheet and presentation categories — these are also highly collaborative in nature.

Third Party Innovation

Google Apps’s fledgling marketplace offers a variety of business productivity add-ons, some of which leverage the recently released GMail Contextual Gadget capabilities.  Google Apps customers can get incremental business value with just a few clicks.

Google’s unique, flat, global architecture represents a significant shift in thinking for many IT professionals and corporate decision makers.  Each day, thousands of organizations are embracing this new approach to corporate email and collaboration — and it’s still relatively early in the game.

In Cloud We Trust – The Tiers of Cloud Vendors

There’s no doubt about it, cloud computing is gaining some serious momentum.  Part of this momentum is due to the fact that the trust issues that were commonplace several years ago among buyers have been reduced to mere pockets of concern.  But, who are the most trustworthy application vendors in terms of customer data being safe and secure — and the application being available — should disaster strike one physical location?

Let’s look at the general tiers of trustworthiness.

Google – Big Table, Big Infrastructure

Google represents the top tier of cloud vendors.  Google’s infrastructure is massive, highly redundant and is designed for hardware failure and other types of failure.  If you use GMail, either as a consumer or as a business user, you may or may not know that Google will not complete a transaction, such as an email send, unless it’s confirmed that your data has been written to at least two places — often two different physical locations, even on different continents.  In addition, each of those two writes is backed up.

It’s also worth noting that Google Apps is one, gigantic, global application instance.  This is the ultimate in multi-tenancy, in which every customer is on the same instance.

This YouTube video provides an excellent deep dive into Google’s infrastructure.  I’ll term Google as having real-time, multi-location redundancy.

Salesforce.com – The Trust Infrastructure

Salesforce.com takes customer data incredibly seriously.  There are entire teams in place to make sure that customer data is secure, redundant and highly available for production use.  Salesforce has three, global data centers with a fourth one coming on line.  If one data center was completely taken out, customer data from that center would be available via one of the other data centers in very short order.

Details on Salesforce.com’s data security can be found here.  The same site tells us that Salesforce.com is running their entire customer base (of over 77,000 companies) on just eleven production instances.

I’ll call this near real-time, multi-location redundancy.

If you know of any other vendors with a similar architecture, please post details in a comment.  I suspect that Microsoft falls into this category for part of their infrastructure.

Disaster Recovery Mode Cloud Vendors

The next tier of vendors — and likely the largest tier — are those that have only one main data center location, but have a plan in place should disaster strike this location.

This tier of cloud vendor does not have either live servers or dedicated, standby servers in a secondary location.  Instead, they have access to a pool of server capacity in a secondary location that’s available to them should they need it.  Data are copied over to the secondary location in near real-time, or on a periodic (daily) basis.

If disaster was to strike the main data center, there could be a time lag of up to a day (or more, if things don’t go well) before the backup environment is available for application use and/or before DNS changes have propagated.

“All Eggs in One Basket” Cloud Vendors

There is a class of cloud vendors that is fully reliant on a single data center being available.  Customer data is mirrored and/or backed up within the data center, but there’s no specific plan should disaster strike the data center location.  These vendors are normally early stage companies that are still in beta test mode.  The economics at this stage of a company’s often doesn’t support having a failover data center.

“Dedicated Server In the Cloud” Vendors

Vendors that host each customer on their own dedicated physical or virtual server within a cloud infrastructure such as Amazon EC2 need to work within a different set of rules in terms of uptime and redundancy.  Unlike the multi-tenant vendors, for which moving a single database from location A to location B means moving thousands of customers from location A to location B, with the dedicated server approach, each customer is on their own, separate application and database instance.  This means a more individualized approach to uptime and redundancy.

If you have any concerns around your company’s data and its availability, it may be worth asking your vendor into which general category they fit.

Merging Duplicate Accounts & Contacts in Salesforce

Merging duplicate records in Salesforce is easy once you know the navigation. This video takes you through quick overview on how to merge Accounts and Contacts in Salesforce CRM.

It’s important to note that the “winning” record in a merge retains related information, such as Activity History, from both records.

Watch this video in 1280×720 resolution