Last week Salesforce.com announced it was releasing a free "stripped down" version of its Chatter micro-blogging application. According to a report on CRN, CEO Marc Benioff said the company would be making an official announcement at its annual Dreamforce conference next month, but the idea is to develop the market for Chatter virally as several other companies in this space have done including Yammer.

It's an interesting approach. At its current price of $15 per user, per month, companies not using the Salesforce platform could be reluctant to try it without testing its use in the enterprise first. What Benioff didn't say is what "stripped down" means. Chatter is billed as a micro-blogging tool, but it appears to be a fully functional enterprise social tool. Still, I'm not sure what they could cut out for the free version, and still provide a meaningful test for customers.

Regardless, maybe Benioff has witnessed the success of Chatter competitors like Yammer, which has been using the Freemium model since it launched. Salesforce certainly got Yammer's attention with this news.

Yammer CEO David Sacks, after hearing Benioff's announcement, said that perhaps Salesforce's large sales team couldn't handle selling Chatter through normal channels. "Salesforce is basically saying that its 2,000 sales reps can't get the job done and that they need to copy Yammer's model. This is like Goliath dropping his sword and armor and chasing after David with a sling-shot," Sacks said. 

But neither was Sacks about to back down, believing his company's experience with freemium puts it far ahead of Salesforce. "We've been tuning Yammer's virality for two years to get to the point where we're adding over 100,000 users/month and 5,000 companies/month with no marketing spending. Other people have tried to copy our model, but aren't showing similar growth. Salesforce may find that it's more difficult than it looks."

Yammer recently enhanced its offering from pure micro-blogging to full-fledged Enterprise 2.0 suite.

I'm not sure they have anything to worry about or not, but Salesforce is a smart company with deep pockets, so I wouldn't count them out of this market either.

For more information:
- see the CRN article

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