Salesforce.com Looks Bright with Dimdim Acquisition

Event Summary

January 6, 2011 - Salesforce.com announced the acquisition of Dimdim for approximately $31 million in cash. With the acquisition, Salesforce.com adds Dimdim’s real-time communication technologies. Salesforce.com will use the acquisition to bring new real-time communication capabilities to the Chatter collaboration platform, mirroring the proven Facebook model of combining collaboration and communication into an integrated service.

Quick Take

Analytical Summary

• Current Perspective: Positive on Salesforce.com's acquisition of Web conferencing vendor Dimdim, because the already finalized acquisition will add a necessary functional element to the company's still maturing social networking platform, Chatter. This will help make it a more capable collaboration software-as-a-service (SaaS) offering opposite established cloud and on-premises solutions. However, the vendor's disregard for existing Dimdim customers and its "me too" approach in mimicking Facebook will somewhat blunt the vendor's marketing mantras.

• Vendor Importance: Very high to Salesforce.com, because the vendor has been working over the past six months to prove the value of Chatter as a solution independent from its popular CRM service. This acquisition supports these efforts at least in terms of adding new capabilities that are typically associated with more horizontal solutions. For example, the acquisition puts Salesforce.com at the forefront of an industry trend toward combining real-time communications with asynchronous collaboration.

• Market Impact: High on the collaboration platform marketplace, because the addition of Dimdim to Salesforce.com's profile- and task-centric Chatter solution coupled with the company's freemium pricing strategies and a new push to reposition Chatter as a "Facebook for the enterprise" will create a short-lived disruptive ripple opposite established products such as Jive SBS and IBM LotusLive and put pressure on pure-play Web conferencing vendors. But over the long term, rivals, especially those with both collaboration and Web conferencing solutions, will be able to easily counter Salesforce.com.

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