Salesforce’s DimDim Buy – A Typical Proprietary Move

Jan Sysmans —  January 7, 2011 — Leave a comment

Many have probably seen that Salesforce.com has acquired web conferencing tools provider DimDim for $31m. (The rumors of this deal had been percolating since before Dreamforce so for many this was no surprise at all.)

The deal pits Salesforce.com in many ways against some big companies and very popular products – Citrix’s GoToMeeting and Cisco’s Webex, in addition to IBM’s Lotus Live set of offerings. With its recent platform buy in Heroku, and this new move, it is funny to see Salesforce continue to add competitive concerns and look to enter in large markets where it has no clout, rather than look to live above the competition in one market where it already does well. Confident move?  Yes. Smart move?  Well, we’ll just have to wait…

And while the DimDim acquisition clearly places SFDC in competition with the likes of WebEx and GoToMeeting, Salesforce would like to look at this differently. Salesforce instead sees this as a pocket acquisition to bolster its Chatter functionality – a tool it is already basically just giving away to gain some stickiness for its actual paid apps. So, if SFDC does not really see much future for DimDim save for part of what is now a free add-on, then the $31m price was not a huge price to pay to make a cool new collaboration feature a little more robust.

But again, if Chatter is basically free at this point, why buy DimDim? The product was open source under the GPL. Couldn’t SFDC simply create an integration to the free tool and offer up that integration along with a simple installer to add video and screen sharing tools to Chatter?

I think the answer here is two-fold. One, I have not yet seen SFDC do anything that resembles open source. Yes, they have opened up their toolkits and platforms for developers, but everyone does that. There is just not that type of culture alive at SFDC in my opinion. This is a company steeped in the grand history of proprietary software.

The second reason (which is definitely intertwined with the first) is that due to SFDC’s multi-tenant model, adding DimDim-like resources without wholly owning the code would be problematic. As we know, in order for SFDC to really have a tight handle on anything its users touch, it has to run on its monolithic platform. This makes upgrades and other things easy, but does set limitations on how SFDC can go to market with technology it doesn’t own.

It will be interesting to see if the nature of a GPL licensed piece of software sitting inside a huge multi-tenant database has any effect on the way in which Chatter users are empowered to make, own and redistribute changes.

All in all, this is chump change for SFDC, and while it plots them theoretically against big names like Webex, I can’t see Salesforce actually making any huge headway into standalone video conferencing with the DimDim technology – most likely Salesforce.com will only relegate the functionality as a nice add-on to Chatter.

Jan Sysmans

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Jan Sysmans brings 20 years of marketing and product management experience, including particular focus in the software-as-a-service segment, to his role as Senior Director of Product Marketing at SugarCRM. In this position, Mr. Sysmans is responsible for all global product marketing programs for SugarCRM. Mr. Sysmans speaks on behalf of SugarCRM about the value, benefits and future of commercial open source solutions at customer and industry events around the world. Prior to assuming his current role at SugarCRM, Mr. Sysmans was the Enterprise Marketing TME (Technical Marketing Engineer) at Cisco WebEx and Director of Marketing at WebEx Communications. Earlier in his career, Mr. Sysmans held product management positions at PlaceWare, Ensim, Narus, XO Communications and Concentric Network Communications. He also served as the chairperson of the Marketing Communications committee on the SaaS Executive Council of the Software Information and Industry Association (SIIA) from 2006-2007. Jan Sysmans holds a Bachelor of Science in commercial and diplomatic relations from the HUBrussels Business School (Belgium), and a Master of Business Administration in intercultural management from ICHEC Brussels Management School (Belgium). He speaks English, Dutch, French, German and Spanish

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