Hey Mark Benioff, Facebook and Twitter are free!

[Note: I’m a Salesforce user at two companies — my software company, SnapStream, and a manufacturing company, Piping Technology. So I’ve spent a fair bit of time inside of Salesforce as a user.]

Marc Benioff wrote: “A true paradigm shift occurs when the barriers of entry are removed for everyone.” Ironically, Salesforce’s pricing is a barrier to entry that they’ll need to knock down to succeed. They’ve built their business being less expensive than the competition (Siebel, etc), but that’s not inexpensive enough to compete with Google and others. Consider the relative value of Google Apps Premier at $50 / user / year vs. Salesforce at $800 / year! And they announced Salesforce Chatter pricing at $50 / user / month! Nuts, if you ask me… pricing from another era.

And they’ve always had one foot in and one foot out of the 3rd party app market (Salesforce AppExchange?). As a Salesforce user, I’ve often been attracted to the idea of 3rd party plug-ins — for a better solution to creating and sending customers quotations for example. But then I discovered that 3rd party plug-ins only work for customeres that pay for API access. Even after paying the few thousand $$ for API access (have to buy it for every account!), getting 3rd apps to work was complex and confusing. Google’s App’s Marketplace, in general comparison, makes it point and click simple to deploy 3rd party services.

And as far as all this talk about streams and enterprise activity feeds, I have yet to see or use Chatter, but if I have to add everyone else at my company onto Salesforce or Chatter at $50-65 / user / month, forget it! I already use Google Apps and when they roll out Buzz for Google Apps account, I’m thinking that it’ll do most or all of what Chatter promises to do for users.

So at the very least, Salesforce has their work cut out for them in this space! I’m not betting on their winning — they have an existing business they’d have to cannibalize. And that existing business has never struck me as very nimble, given the pace of their software updates and how they seem to provision customers across discrete servers/server farms vs. in a truly distributed fashion.