Salesforce gets into HR

March 15, 2012: 4:14 PM ET

Payroll and onboarding might not seem all that exciting, but so-called human capital management software is attractive to Salesforce and its competitors

FORTUNE -- Watching Salesforce.com (CRM) CEO Marc Benioff addressing the crowd at Cloudforce, the company's one-day event for partners, customers and developers, is a bit like watching one of those overly enthusiastic preachers on TV. The outspoken executive works the room, walking among his audience and cracking jokes, all the while espousing the new world of enterprise technology (and his new religion of choice), the "social enterprise."

Benioff likes to throw around terms like "revolutionary" and "new world." His obsession with bringing Faceboook-like tools to the enterprise started in 2010, when the company launched Chatter, a collaboration tool for companies. On Thursday morning Benioff unveiled his latest social product, performance management software called Salesforce Rypple. The latest addition to the company's arsenal of cloud-based products not only extends Benioff's social strategy, it also gets Salesforce's foot in the human resources door.

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Payroll and onboarding might not seem all that exciting, but so-called human capital management (HCM) software is attractive to Salesforce and its competitors for several reasons. Unlike customer relationship management software, which is used by sales teams, HR tools touch every employee in a company. That means more "seats" (a.k.a. paying users) per corporate customer. And according to John Wookey, Salesforce's new executive VP of advanced applications, HR software is particularly well-suited for social features like gaming, chat and badges.

Last December, Salesforce announced it was buying Rypple, then a Toronto-based startup. Wookey, who spent years running software development projects at Oracle (ORCL) and SAP (SAP), was instrumental in the acquisition and now oversees the company's nascent HCM products. The new Salesforce Rypple integrates the acquired company' social networking-inspired approach to performance reviews with Salesforce's traditional customer relationship management software. That means a salespeople can set goals and provide feedback and recognition to colleagues without having to log into a separate system.

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Salesforce says companies like LivingSocial, Spotify and Facebook are already using Salesforce Rypple. And Benioff recently said that the company's newer social offerings are helping to bring in new and larger companies like Activision and Hewlett-Packard. On stage at Cloudforce, he brought on CIO after CIO to talk about how collaboration tools have helped employee productivity and customer relations. But it's still early days for the social enterprise, and the longer-term ROI on products like Chatter and Salesforce Rypple is largely unknown, despite Benioff's claims that bringing Facebook to the enterprise is revolutionizing the way companies do business. What's more, Salesforce Rypple only tackles one small aspect of HCM software, which also includes heavier, more fundamental functions like payroll and onboarding. To really take on HR heavyweights like SAP and Oracle (which Rypple currently partners with), Salesforce will need to tackle these less sexy HR tools.

For now, Benioff still has a lot of evangelizing to do on the social side. Chatter is still a new product and large enterprises are just starting to catch on to social. Of course, you wouldn't know it listening to Benioff work the crowd.

"This is the renaissance," Benioff told a roomful of press and analysts after Thursday morning's keynote. "This is the social enterprise. The world has changed."

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About This Author
Michal Lev-Ram
Michal Lev-Ram
Writer, Fortune

Based in Silicon Valley, Michal Lev-Ram covers enterprise and mobile technologies for FORTUNE. Prior to joining FORTUNE, she wrote for CNNMoney, Fast Company, Popular Science and other business and technology publications. She was also a staff writer at Business 2.0 and holds a B.A. in journalism from San Francisco State University.

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