September 30, 2007

Bay And Bessemer Add $25 Million In Monetary Muscle Behind Force.com

Nick Gonzalez

4 comments »

Bay Partners and Bessemer Venture Partners have teamed up with Salesforce to invest $25 million in businesses building on the recently announced Force.com application platform over the next three years. Investments will be around $500,000 each (some convertible notes). However, others may go as high as $2 million depending on the company’s stage and needs. The investments are a boon to the evolving Force platform and sure to lessen the appeal for a host of other database-driven application platforms.

The partnership will provide Bay and Bessemer early leads to new companies and Saleforce’s assistance during due dillegence. Bay and Bessemer were attracted to the platform due to Salesforce’s existing 35,000 customer base and 50,000 developers. Force.com already has 350 partners with 725 applications as well.

Bay looks to be taking the lead in the program and will be leveraging their significant experience SaaS investments. They have already invested in many Appexchange integrated companies (Xactly, Eloqua, Cornerstone, eProject) and are looking to get in earlier this time around. Notably, Bay has also invested in Facebook’s platform by setting aside funds for 50 investments (they’ve closed three).

The investment program has been underway over the past couple of months. Bay has been looking at 12 deals and already committed to one. The deals are judged on a case by case basis. Although, they will be looking for fully developed products, with strong metrics (revenue, customer stickiness).

The Force.com venture program is being led by Neil Sadaranganey and Salil Deshpande from Bay Parntners and Byron Deeter from Bessemer Venture Partners. Companies interesting in learning more about the program can send inquires to saas@baypartners.com.

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The Inside CRM Blog » Blog Archive - Funding the Force

October 23rd, 2007 at 11:06 pm

» Force.com takes $25 million from Bay Partners & Bessemer Venture Partners Web 2.0 Money: The Money & Business Behind the Web 2.0 Innovations

December 2nd, 2007 at 7:19 am

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Alex

October 1st, 2007 at 12:12 am

I salute the effort. But, nothing will really change. In other words. The only way salesforce is going to get traction from their Force.com platform is to “GUARANTEE” some business to these Partners. I believe there are two types of companies that join the Force platform:
1) Companies that have no real business outside of Force.com
2) Good established companies that only Partner with salesforce because it is solely convenient.
SaaS Entrprenuer

October 1st, 2007 at 9:34 am

When is Techcrunch going to employ someone who knows or follows enterprise software. First of all Salesforce.com is not the only enterprise software company doing great new things but its virtually the only one that gets coverage here — I also happen to have noticed they advertised on the site pretty heavily in recent quarters.

Second, and more importantly, every time TechCrunch mentions the Force.com platform they say things like “sure to lessen the appeal for a host of other database-driven application platforms” which demonstrates a complete lack of understanding of what is happening in enterprise software and SaaS right now.

1. Enterprise Software companies which have not yet switched to SaaS are feeling the pressure and in many cases this is already affecting the bottom line.

2. In order to adopt a SaaS strategy a quick way to do this is to partner with SaaS and build on the Force.com platform, but this is not an end-game strategy, it is a stop-gap measure. Ultimately Salesforce will want to own all major categories, Benioff wants to build the next SAP/Oracle/PeopleSoft onDemand and why wouldn’t he? However, this causes a fundamental conflict with an partner who would ever consider Force.com their primary platform

3. Do you think every other enterprise software company out there is going to bow down to Force.com, give up, and hand over they keys to Benioff? Exteme niavite on the part of TechCrunch here. Every enterprise software company will need a strategy to compete with this kind of platform and allow their own applications to be customized, expanded, and even new apps created in an ecosystem, in order to remain competitive. And there is much more of a business case for a successful stand-alone enterprise software company to build or buy to get there versus give up and run on Force.com

Force.com is a fantastic platform, but it represents a very new very big change that is happening in enterprise software today. It represents an incramental shift in power to end-users in terms of their ability to customize and build applications specific to their business needs. It is the intersection of the do-it-youself web with enterprise software (e.g. YouTube ==> YouSoft). To say that Salesforce.com has and will continue to have a monopoly on this is short-sighted at best and either extrememly niave or “sponsored” at worst.