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Tolls on the Road to Nowhere

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By Jamus Driscoll, Demandware Marketing

As a company of on-demand zealots, we here at Demandware are 100% behind the belief that on-demand is the software model of the future. I could riff for quite some time as to why-it puts accountability on the vendor for the quality and performance of the software, it helps the retailer innovate faster and realign internal resources to brand-differentiating site experiences-but sometimes it's better to let others do the talking.

In an article published this week in PC World, Mark Benioff, Saleforce.com's CEO, has thrown down the gauntlet, right on Oracle's shiny red shoes, calling for an "end to software maintenance fees." Maintenance fees, the plumpest and most tractable of Oracle's many cash cows, accounted for $2.9 billion in Oracle's third quarter alone and yields 90% margins. Moo.

Benioff, no stranger to explosive quotes, references one Siebel customer saying, "This customer currently uses Siebel software to run her call center. She pays more than $15 million a year for the privilege of having to

implement the updates that Siebel sends her. That does not include backup. Or disaster recovery. And of course, it does not guarantee that she will be using the latest technology. The maintenance agreement only assures her that her outdated software will continue to work."

Benioff is also quoted as writing that the customer, "is paying tolls on a road to nowhere." Ooof.

The man, for all the rhetoric, speaks Truth. You could take most everything he's quoted as saying in this article and apply it to ecommerce. The only edit I'd suggest? Double the emphasis. Double the impact. It's one thing to talk innovation and uptime in CRM. It's another to talk innovation in ecommerce, where consumer expectations of an ecommerce site are set and reset constantly by their cumulative Internet experience. It's another thing to talk downtime in ecommerce, where millions of revenue not to mention brand reputation, can be sacked by some obscure technical gremlin lurking the depths of the platform. And for all this trouble, the retailer with a licensed software platform has the privilege of paying maintenance, for the opportunity to inherit the burdens of innovation and to meet the dirty little gremlin on some Cyber Monday. That doesn't feel like winning.

Benioff smacked the nail on the head with this one.


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