The month started with a little bit of puzzlement as Salesforce.com suspended plans to build a new head office campus in San Francisco’s Mission Bay area. Salesforce cited the immediate need to accommodate its growth in head count, but the move seemed to mystify some of the financial community.

There were fewer mixed messages at the San Francisco Cloudforce event as Salesforce announced a series of new initiatives. Key items included the announcement of Site.com, a cloud based content management system, and Salesforce Rypple, an integrated version of their December acquisition which supports social based employee evaluation.

The company is clearly looking to piggy-back on the success of its social offerings, like Chatter, to expand into new lines of business. Cloudforce also seemed to signal an emphasis on larger enterprises, and a thawing in its often prickly relations with other back-office providers. Perhaps most ironically of all was an apparent rapprochement with the IT department, given that much of Salesforce’s success has arisen as a result of bypassing them.

It will be interesting to see how successful Salesforce.com are in penetrating outside their traditional markets, and what it means for their position in the CRM market if their product set becomes more diverse and their focus becomes increasingly on larger businesses.

The likes of SAP and Oracle are also likely to prove more capable and determined competitors than they may have experienced in the CRM market to date. SAP were suggesting that a third of their revenues could come from subscriptions by 2015, and in a quick counter to Salesforce’s ‘Social Enterprise’ strategy announced that that their recently acquired human capital management company, SuccessFactors, would make its social collaboration tool, Jam, available free to all subscribers.

Equally, any speculation that Oracle might be weakening under pressure  from younger cloud-based rivals in the light of a disappointing quarter two,  was quickly squashed with the release of their quarter three figures showing net income up 18% to $2.5 billion, and, perhaps more tellingly, new software revenues up 7% to $2.4 billion.

It wasn’t only Salesforce.com who ran a major event in March. Microsoft hosted Convergence in Houston for its Dynamics products attracting 10,000 partners and customers. As a fast follower, rather than innovator, and as a company that has been notorious for playing its cards close to its chest regarding future developments, perhaps unsurprisingly there don’t seem to have been many ground-breaking announcements.

On the CRM front, we already knew what was coming in the quarter two release, but there were indications that we will see social customer care as well as cloud based data enrichment later in the year.  There was a lot of emphasis on the cloud with Microsoft’s ERP packages, Dynamics NAV and GP, scheduled to have cloud-based versions in the fourth quarter.

The event did give us a fix on current CRM user numbers: 2.25 million users and 33,000 customers, giving an average implementation size of 68 users, which is higher than I would have guessed particularly after the launch of its SaaS version last year, which generally appeals to smaller organisations.  This suggests some pretty large implementations of Microsoft CRM out there, including Microsoft’s own it would appear, having announced at Houston that they had finally replaced their Siebel CRM system, that’s been something of an on-going embarrassment to them since they launched into the CRM market.

While Microsoft may not have been making big announcements, some of its partners were happy to do so. Marketo unveiled a new integration of its marketing automation system into Dynamics CRM which will help Microsoft plug a key gap in its current offering, and, to maintain the marketing theme, Silverpop, used the Houston event to announce the news that it had acquired marketing automation company, CoreMotives.

In an interesting counterpoint to Microsoft’s quarter 2 announcement of a new set of mobile functionality, Zoho announced a new Android client for its CRM system to complement its iPhone and Blackberry based clients. As I touched on previously, Microsoft’s, $30 per user, per month pricing seemed somewhat wide of the mark, particularly when you consider that Zoho have priced theirs at $3 per month.

Finally, Sage North America seemed to be starting to grapple with that fact that their business model looks increasingly unattractive when compared with its cloud based competitors. Recurring revenues, compared to Sage’s one off licences fee, and low or non-existent payments to implementation partners, compared to the heavy margins paid by Sage, seems to have led the company to announce a monthly pricing option for many of its products, with a reduced margins available to partners. How well that will sit with its reseller community, who may increasingly be attracted to more leading-edge products remains to be seen.

That concludes my take on the news for March. If I’ve missed or misunderstood anything significant please feel free to comment!

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