To an outside observer, the characteristics of a market for any product are difficult discern. Only day-to-day involvement over a long period of time reveals the true attributes of a market. The market for email syncing and logging tools for Salesforce.com turned out to be very different from what we expected at Match My Email when we launched the cloud application.
Match My Email is an email syncing and logging solution for Salesforce.com. It was designed from the ground up to solve Salesforce.com’s #1 pain point, i.e., email integration. Match My Email works with every type of email system – Microsoft, Google, Lotus, GoDaddy, Rackspace, Yahoo and IMAP — and does all the work of matching emails to Salesforce.com records for a sales rep. Match My Email is different from all the other solutions on the market because it is fully automated. It eliminates the need to click on a manual button to log every email into Salesforce.com. Match My Email saves the average sales rep 100 hours of drudgery per year.
When Match My Email was launched at Cloudforce NYC in November 2011, we thought that our average customer for our SalesForce.com email integration cloud would be a sales department with 50 or more seats. We thought that large companies would invest in sales rep productivity and be attracted to Match My Email’s one month payback period. We built our business model and web site messaging around that assumption. Instead, we now have hundreds of customers with less than 50 seats and not a single customer with more than 50 seats. In fact, the majority of our customers buy email syncing and logging for just one seat, though the average seats per customer is five. We had no idea that so many Salesforce.com customers were single seat implementations.
We also expected our customers to use the Enterprise Edition of Salesforce.com, because it is touted as the “Most Popular” edition on the Salesforce.com web site. But again realty was different. Our customer base is primarily made up of Group and Professional Edition users.
Fifteen months into Match My Email, we can look back and offer a few observations/theories of why our product sells best to the single office/home office customers of Salesforce.com.
- The benefits of the cloud are more pronounced the smaller the company. Adopting a “NO SOFTWARE” model that outsources the data process infrastructure benefits a small company much more than a big company. Small and medium businesses don’t have the critical mass to afford dedicated IT professionals dealing with bandwidth, security, storage, backup and recovery, database maintenance and patches/upgrades. Cloud technologies like Salesforce.com and Match My Email provide tiny companies with the same tools traditionally only available to the largest multinationals. Cloud technology levels the playing field between SMB’s and large corporations. From a pricing perspective, the ability to get a full-function CRM solution like the SFDC Group Edition completed with all the required IT infrastructure for $20 per month is a bargain. Most of our customers use the Professional Edition of Salesforce.com because it allows them to integrate five external applications into Salesforce.com. The most important Salesforce.com add-ons being email integration, WordPress web forms and mass email marketing tools.
- Salesforce.com has a perverse data storage pricing model. Data and File Storage is dirt cheap for a single user of Salesforce.com – 1 GB of Data Storage and 11GB of File Storage — but gets progressively more expensive as the number of seats grow. By 50 seats, the Data and File Storage allocated to an individual user is expensive and small, at 20MB for Data and 612 MB for File. A single seat Salesforce.com user can store as many as 133,000 emails in Salesforce.com before running out of space and having to buy more. At the average import rate of 45 emails per day, the single seat user can import emails for 8 years without constraint or extra cost. At 50 seats, an end-user is only allocated enough space to store 3,333 emails. At the average import rate of 45 emails per day, the 50-seat user runs out of Data Storage in 74 days. Buying additional Data Storage is expensive at $300 per year for an additional 50MB or the equivalent 8,333 emails (a 185 day supply of email storage for the average user). The solution is to put the email storage outside of Salesforce.com in a cloud drive like Dropbox, Box.com, Google Drive or Microsoft Skydrive that offers dirt cheap storage. Putting email storage in yet another cloud , however, increases security concerns which slow down the procurement process.
- Big companies are very conservative technology consumers and have entrenched bureaucracies, i.e., the IT staff, Their procurement processes are complex and time-consuming to prevent bad decisions and graft. The more complicated and layered the procurement process, the more it favors larger enterprise technologies companies like Microsoft, Google, IBM and Oracle that can afford to invest 100’s of hours of work selling a single customer at a loss to protect their installed base. At cloud price points — Match My Email is $14.95 per user per month — there is not enough money in the transaction to hire an expensive direct sales staff that can wine and dine the CIO and his staff for months and answer hundreds of questions (don’t forget to factor in the cost of Super Bowl, Masters, World Series and US Open tickets). Small businesses, single proprietorships, start-ups, on the other hand, have to make fast decisions. They are constantly looking for productivity tools that will save them the most important of all commodities – time. Hence, SOHO businesses are the natural consumers of the productivity tools and add-ons offered on the Salesforce.com AppExchange. 80% of our leads come through the AppExchange. From time to time, we will get a Lead from a large company, but invariably those Leads result in nothing. The sales reps and managers who need Match My Email to make their jobs easier don’t have the time to fight the CIO Department, which has its own priorities and agendas.
- Security and privacy concerns are the final factor limiting cloud adoption by large companies. Multinationals, for all of their high priced IT talent, are not good at evaluating security risks. They seem to lack the tools and understanding of basic cloud security principles. Though we can show the multinational IT departments that Match My Email is as secure as Salesforce.com [or Salesforce.com would not allow us to import data from their cloud to our cloud and vice versa], the CIO’s don’t have a good way to check and measure our security policies. Match My Email has no access to user email content in its cloud. Upon import, user content is encrypted and thereafter only visible to the end user or domain admin with the permission to see it. All passwords in Match My Email are entered by the end user and immediately encrypted, again in conformity with Salesforce.com requirements. We offer potential multinational customers full audit access to our backend, but so far no one has taken us up on the offer because we sense they don’t know what to look for in the audit. We also offer Match My Email as an appliance behind the firewall, but no takers. This large company behavior has led us to the conclusion that big IT departments will only adopt Match My Email when we are bought by a larger company (preferably Salesforce.com) and can be presented as a mainstream application.
The good news for single seat Salesforce.com user is that Match My Email works perfectly for them. Match My Email offers small companies with less than 25 SFDC seats a leading edge productivity tool that gives them an advantage over their multinational competition. In fact, the upside-down storage pricing policies of Salesforce.com actually make their Salesforce.com implementation superior to their competitors at large companies.