Webware

Over the last 13 years, Chris Shipley has been the primary gatekeeper of the twice-a-year Demo conferences, evaluating more than 20,000 applications from companies wishing to present in front of a roomful of reporters, venture capitalists, and analysts.

Now, with DemoFall 2009 beginning Tuesday morning, Shipley is marking the last of 24 Demos she has overseen as she prepares the formal hand-off of the show to VentureBeat founder Matt Marshall.

For each Demo, Shipley and her team have selected a few dozen companies, giving each a chance to make a name for themselves during a 6-minute presentation in a tiny show floor booth by unveiling something never seen before--or perhaps a great new take on an existing product or service. All told, over the 24 shows, she has given the opportunity to more than 1,500 firms.

Some of them are now household names, and some have long since faded into little more than memories.

As a parting gift to the many Demo alumni, Shipley recently announced the show's Lifetime Achievement Awards, honors that went to some of its most successful presenters. Among the winners were Palm co-founders Jeff Hawkins and Donna Dubinsky, Six Apart founders Mena and Ben Trott, Salesforce.com founder Marc Benioff, WebEx CEO Subrah Iyar, and others.

Given that list and the fact that Marshall is waiting in the wings to usher in the next generation of Demo--to begin next spring--now seems to be a good time to follow in the footsteps of my colleague Josh Lowensohn, who a week ago took a "Where are they now" look at 10 alumni--five good and five not so good--of the TechCrunch50 shows, examining some of the stars and flops of Demo's past.

The good

TiVo

One of Demo's older success stories, it's still hard to believe that TiVo, the first successful service for digital-video recording, is already 12 years old (it was founded in 1997, though service didn't debut until 1999). From its humble beginnings on the Demo stage, the company has gone on to become the standard-bearer in the world of DVRs, even as others have tried to ride its coattails.

Today, TiVo has just more than 3 million subscribers and is boosting its presence among cable users. During the last quarter, cable provider RCN became the first to ever use both TiVo's hardware and software offerings. The company offers three main DVR models, two of which have high-definition capabilities.

Over time, TiVo has become synonymous with DVR technology and, to some extent, has been one of the major thorns in the side of commercial advertisers, who have had to battle against viewers' preference for skipping through commercials.

Palm

Although Palm as a company has had its share of ups and downs, it has to be considered one of the most important players in the history of handheld computing. Today, it is trying to make one of its biggest comebacks ever with its Pre smartphone, one of the few devices that has the potential to take a bite out of the iPhone's market share.

With its original Palm Pilot, Palm essentially created the market for personal digital assistants. And while the company lost some of its edge when Microsoft decided to get into the business with its Pocket PC technology, there is little doubt that the PDA market, and the subsequent smartphone market, owe a great deal of debt to Palm. The original Palm OS was used by millions of people around the world.

Founders Jeff Hawkins and Donna Dubinsky, who were recently awarded Demo Lifetime Achievement honors, left Palm to form Handspring, which produced its own line of PDAs using Palm OS. Eventually, Handspring was sold back to Palm, giving the latter a chance to regain its dominance with the Treo.

Salesforce.com

Marc Benioff brought his fledgling company, Salesforce.com, to the Demo stage in 2000. Unknown at the time, the company has since become a household name in customer relationship management, or CRM, services.

Today, Salesforce.com has more than 63,000 corporate customers, and in its most recent quarter, it earned $21 million on record revenues of $316 million.

Six Apart

After debuting at Demo in 2004, Six Apart became a leading provider blogging tools. Its Vox, Movable Type, and TypePad services are used by many of the most popular bloggers in the world, including HuffingtonPost.com, Boing Boing, and Talking Points Memo.

Founded in 2001 by Ben and Mena Trott, the company got its first significant round of funding, a $10 million B round from August Capital, and soon after, purchased Danga Interactive, the makers of LiveJournal.

Blinkx

Launched at Demo 2007, Blinkx has become the world's-largest video search engine. It has more than 500 media partnerships and currently indexes more than 35 million hours of video content.

The Bad

Ugobe Ugobe, which presented at Demo in 2006, looked poised to become a leader in personal robotics. Furby inventor Caleb Chung was one of its founders. And ts Pleo animatronic dinosaur, both friendly and programmable, was the kind of toy that seemed certain to provide enthusiasts and children alike with hours of robot fun.

But the company probably came along at the wrong time. Ugobe found itself in the position of trying to sell a product that cost too much, just as the global recession was kicking in.

While Pleo got positive reviews and had a wide range of fans, it simply couldn't gain a foothold in the market. Ultimately, Ugobe filed for bankruptcy protection earlier this year, and today, Pleo is sold, albeit with little marketing, by a company called Innvo Labs.

Filmloop

Launched at DemoFall in 2005, FilmLoop was intended to be an online service that presented a tray of moving images that slide from right to left across a user's screen, showing each picture and then advancing to the next.

The goal was to create a community in which users could invite anyone they wanted to join, and even add photos, to, their loop. There was no limit to the number of people that could be added to a loop, meaning that an entire community could participate.

The company also hoped to become a photo newswire of sorts, and it had relationships with hundreds of professional photographers.

But things didn't go as planned for the company. By early 2007, it had burned through millions of dollars of venture capital and had laid off most of its staff. In large part, that was because there were other companies providing similar services, and FilmLoop's service simply never picked up a critical mass of users.

Peerflix

Also launched at DemoFall in 2005, PeerFlix aimed to be something of an open-source Netflix.

The idea was that users would send each other their own DVDs, and would search for and figure out where to send their DVDs through PeerFlix's servers. The company hoped to take advantage of the collective library of movies of its users, and it thought that members would trust each other enough to send off their own personal property to strangers.

From the get-go, the idea seemed problematic, in part because it required a critical mass of users in order to maintain an attractive collection of films. By early 2008, PeerFlix died. According to my colleague Rafe Needleman, who liked the service at first, "instead of getting more reliable as its user base grew, the service got less and less reliable, most likely as users stopped participating in it."

WebDiet

It sounded like a good idea when it was announced at DemoFall in 2008: WebDiet, a service designed to help people find healthy restaurant food, regardless of where they are.

The idea was that people would enter--either via a Web interface or through an iPhone app--dietary criteria and then see healthy food options arrived at by combining those criteria with location-based data. WebDiet even planned on partnering with restaurant chains with online menus so that users had a wide range of choices right from the get-go.

But good idea or not, a year later, and WebDiet is still in private beta, not a good sign this late in the game. It's certainly possible that it will still launch publicly and make an impact on people's eating habits, but at this point, it seems like the odds are against it.

Ham-It

Announced at Demo 09 last spring, Ham-It was touted as a "mobile-centric single-stop shop to globally connect and match consumers with local providers of day-to-day consumer services with capability to collaborate and schedule."

At the time, I wasn't sure what that meant, and I'm still not. And it looks like potential customers never understood either, as the company appears to have all but disappeared.

The DemoFall 2009 roster

Starting Tuesday, these companies will be taking their 6-minute turns on stage at this year's DemoFall. Stay tuned for full coverage of the show.

80legs
Anaplan
Answers
Armorize Technologies
Article One Partners
Burt
CallSpark
Cazoodle
Cortera
Digitrad Communications
DotSyntax
Emo Labs
Enthusem.com
ePulze
Faculte
Freeddom Tecnologia e Servicos
Fuze Box
Glam Media
Gogrok Technology
Hand Eye Technologies
Hashwork
Hevva
Hewlett-Packard
Indigo
Intelius
Kryon Systems
LeapFile
Liaise
Lunchster
Micello
MicroAssist
MoLo Rewards
MyOwnRealEstate.com
MyVocal Holdings
NativeTung
Piryx
Point of Wealth Systems
Rseven Mobile
RumbaFish Technologies
Scientific Media
Symform
Third Iris
TotalTrainer
Traackr
TravelTrac
TuneWiki
Tungle Corp
Twirl TV
VicMan Software
Waze
Webroot
Weels Corp
WhoDoYouKnowAt
YiqYaq
Zorap
Zuora

In addition, these 14 companies are part of Demo's AlphaPitch program, in which presenters get 90 seconds to make their case:

Cardagin Networks
Diditz
Dubzer
Enroute Systems
Gelato Dating
Infochimps
Keen Systems
Melior Technologies
Nubli
Pinyadda
Ringful
Sarithi LocalMart
ShareGrove
TrafficTalk

For companies that want to turn all that customer carping on Twitter and Facebook into something more constructive, Salesforce.com is bringing some new services to its cloud-computing infrastructure.

Salesforce.com, which sells Internet-based services as an alternative to business software companies install on their own computers, has added new Twitter and crowdsourced tech support options to its foundation for customer service work.

The Service Cloud 2 options, announced Wednesday, will give new Web-based options to those who pay Salesforce.com to run their customer-support infrastructures. About 8,000 clients use the earlier Service Cloud option, Salesforce.com said, and Chief Executive Marc Benioff used the announcement to tout his company's cloud-computing philosophy:

"With two-thirds of customer service interactions moving to the cloud and the popularity of social networks, it is high time for a change," Benioff said in a statement. "The customer service market is being held back by traditional technology."

Twitter integration automates manual processes for monitoring the microblogging site for finding tweets related to customer-service issues, engaging in support conversations using Twitter, and tracking that conversation. The service is a free add-on, available now, for Professional, Enterprise, and Unlimited Edition customers for the Force.com AppExchange service.

The company also announced Salesforce Knowledge, a service to bring company knowledge bases--think high-end frequently-asked-questions pages--onto the Web. It'll cost $50 per month per customer support representative starting in the fourth quarter of 2010. It's based on technology from Salesforce.com's 2008 acquisition of InStranet.

Also coming is Salesforce Answers, which lets companies set up forums where people can pose questions, answer them, and rate the answers. The service also integrates with a Facebook fan page. It'll arrive in the first quarter of 2011, the company said.

Twitter customer service: It's the hot new thing that all the kids are doing! Salesforce has added a new application to its "app exchange" so that clients who use its Service Cloud product can better wrangle Twitter for customer service purposes. It'll be available this summer.

With the app, called Salesforce CRM for Twitter, clients can monitor Twitter messages that pertain to their company, aggregate the replies and conversations around those messages, and then respond to the inquiries and complaints and whatnot.

Service Cloud already helps clients keep tabs on the likes of Facebook, Blogger, and Web forums.

Alex Dayon, Salesforce CRM's senior vice president of customer service and support, said that with the abundance of social-media tools on the Web, people are turning to "crowdsourced" help with customer-service issues. I don't blame them. When was the last time you spent ages on the phone with your TV manufacturer only to have some random Twitter follower provide you the solution in five minutes?

"While $20 billion of software is being spent on call centers, the customers are somewhere else," he said.

Salesforce.com showed Wednesday that cloud computing can produce serious money--but also that it's not immune from the current unpleasant economic climate.

For its fiscal 2009, which ended January 31, the San Francisco-based company reported revenue of $1.08 billion, a 44 percent increase. But for fiscal 2010, it lowered its forecast to a range of $1.3 billion to $1.33 billion.

In November, the company had forecast $1.35 billion to $1.36 billion, and analysts surveyed by Thomson Reuters expect on average $1.325 billion for the year.

"We've slightly lowered the guidance range. There's increasing uncertainty out there," Chief Financial Officer Graham Smith said on the company's conference call.

For the company's fourth quarter, Salesforce.com reported net income of $13.8 million, or 11 cents per share, on revenue of $290 million. That compared with $7.4 million net income and $217 million revenue for the year-earlier quarter, and it was better than the 7 cents per share on $285 million in revenue analysts expected.

In after-hours trading, Salesforce.com's stock rose $1.50, or 5 percent, to $29.60.

Salesforce.com's core service lets customers track and analyze customers activity; its online approach also features alliances with some other high-profile Internet sites, including Amazon Web Services, Google Apps, and Facebook.

The company competes chiefly with Oracle's Siebel software for customer relationship management, which typically is run on massive computers a company runs on its own.

Salesforce.com has been branching out, though, offering its Force.com system to let companies build their own custom Web-based applications or third-party programmers offer their own extensions to those customers. And in December, the company launched Force.com Sites to house customer's Web sites.

In the fourth quarter, Salesforce.com's technology overall completed more than 12 billion transactions, the company said. The total of more than 1,500 Force.com Sites received more than 15 million page views in the quarter, and there are 166 applications available in the Force.com AppExchange.

"The numbers for the fourth quarter clearly demonstrate increasing adoption of the force.com platform," Chief Executive Marc Benioff said in the conference call.

After Tuesday, Barack Obama and John McCain will (presumably) bury the hatchet and move on with their lives. I'm not quite sure I can say the same thing about the respective heads of Zoho and Salesforce.com.

Sridhar Vembu, CEO of AdventNet, the company behind the Zoho suite of online applications, has again called out Marc Benioff in a public post accusing Salesforce of attempting to "block customers from migrating to Zoho CRM."

Earlier this year, Vembu publicized details of negotiations he had with Salesforce in a bid to make Zoho work with AppExchange, an online marketplace for hosted business software applications. A week prior to the product launch, however, Vembu claimed that Benioff suspended all joint development work between the companies in favor of a different tack.

"He offered repeatedly to acquire Zoho outright, which we rejected. I told him there is absolutely no fit between our companies, particularly with his business model (as noted above) and our business model. I told him there is just no cultural fit between our companies and such an acquisition would be miserable for both parties. Finally, he offered to let us integrate Zoho into AppExchange, provided we pull the plug on Zoho CRM. We told him that kind of pre-condition is totally unacceptable, and it also completely negates his claims of openness of their platform. Needless to say, we never did agree on the issue, and we dropped the integration effort."

Vembu again revisited that chronology in Tuesday's post, one day after Benioff, making the invidious comparison to Microsoft, described Salesforce's strategy as inclusive.

"Since then, Salesforce has repeatedly tried to block customers from migrating to Zoho CRM, by telling them (falsely) that they cannot take their data out of Salesforce until their contract duration is over. We have emails from customers recounting this."

Later, he told me that he had had a private e-mail exchange with Benioff as recently as a month ago, where the question of Zoho applications running on the Force.com platform again got raised.

"He refused," according to Vembu. "He just said that that's part of their business stragety and their prerogative. No one is questioning his right to do that, but it's not consistent with openness. They claim that Force.com is open but that's really not true."

A Salesforce spokeswoman said the company would not have immediate comment.

SAN FRANCISCO--Social-networking giant Facebook got a notch bigger in the last three months, and the company has higher hopes from a partnership with Salesforce.com.

Specifically, the company grew its active membership total from 90 million in early July to 120 million now, said Facebook Chief Operating Officer Sheryl Sandberg, speaking at Saleforce.com's Dreamforce conference here.

"We got more (members) in the last three months than in the first three years of our existence," Sandberg said. She also said the site now has more than 280,000 applications, small Web-based programs that can be housed on Facebook pages and shared with people's contacts.

Sandberg was on stage to tout a Facebook partnership with Salesforce.com by which applications running on the Force.com infrastructure can be presented on Facebook pages. Salesforce.com offers online tools for businesses managing their customer relationships--and an increasingly sophisticated programmable foundation for customized applications and Web sites.

If programmers using the Salesforce.com infrastructure jump aboard, they could bring a significant new business angle to the scope of Facebook's applications, which today tend to be much more about entertainment. That's just want Sandberg hopes to achieve: "By coming together with Force.com, we believe we are about to unleash the potential for productivity in network applications for our users," Sandberg said.

Steve Fisher, senior vice president of Saleforce.com's platform division, demonstrated the partnership by bringing the My Starbucks Idea application from Salesforce.com's infrastructure into Facebook.

Also tooting the horn was Starbucks Chief Technology Officer Chris Bruzzo, who said the Facebook technology will help the company and its customers make My Starbucks Idea more useful and manageable. "Facebook is going to give us that local, personalized relevance," Bruzzo said.

A Google visualization tool that converts raw numeric data into charts, graphs, tables, maps, and plots has outgrown its initial ties to the company's online spreadsheet application.

The Google Visualization API (application programming interface) previously could construct the graphics only from data stored on Google Spreadsheets. Now any Web-based data source, including databases and Microsoft Excel spreadsheets, can be used, Google said.

Google made the announcement in conjunction with Salesforce.com's Dreamforce conference Monday. Salesforce.com is adding its own new tools and technology atop the interface so its customers can more easily employ the visualization feature. For example, the tools can be used to create new customized dashboard-like monitoring and control panels.

There are some big new names backing ZocDoc, a start-up that lets you book doctor's appointments online (currently just in New York). Salesforce CEO Marc Benioff has contributed an undisclosed amount to the company, as has Bezos Expeditions, the investment firm run by Amazon.com founder Jeff Bezos.

In August, the company announced a $3 million Series A funding round led by Khosla Ventures, the firm created by Sun Microsystems founder Vinod Khosla. The Bezos and Benioff investments are considered contributions to that round.

The New York-based ZocDoc currently employs 12 people and said that there were nearly 20,000 medical appointments available for booking in the month of September.

Sridhar Vembu, CEO of AdventNet, is not afraid of going up against Microsoft Office or Google Apps. He is also the CEO of Zoho, which recently announced that it had achieved 1 million registrations (between 300,000 and 350,000 log on to the service monthly) for its cloud-based set of productivity applications. Vembu is now making a financial case that Zoho is better positioned than Google to take on Microsoft in the upcoming office suite sweepstakes.

Vembu's analysis is based on a comparison of revenue per employee and profit per employee metrics. "The gap in revenue per employee between Google and SAP and Salesforce.com, for instance, indicates that Google would more likely be more interested in what eBay does or in monetizing YouTube than in Zoho or Salesforce.com's barely profitable business. Companies invest in what generates the best return on investment," Vembu explained to me.

In an e-mail explaining his financial analysis, Vembu wrote:

We simply don't believe Google has the rational business incentive to go deep into the business/IT software category. The lower revenue and profit per employee figures would be tolerable if there were huge growth opportunities there; but when very successful companies like Adobe and Intuit pull in revenues well shy of a Yahoo, when even the enterprise software leader SAP is the same size of Google (Google makes more in profit per employee than SAP makes in revenue per employee), it is fairly clear this market is not going to make a material contribution to Google's growth and profitability objectives. So what is Google's plan here? It is fairly obvious they are in it to put Microsoft on the defensive on its home turf, so that Microsoft's offensive capability in the internet is diminished. It is also perfectly clear why Microsoft wants to be an Internet player--as Google has shown, it is a higher margin business even than its monopoly-profit core business.

"Google's margins are a once in a lifetime occurrence, and Google will move in that high-growth direction--that's why Microsoft is so desperate about search. It has a higher growth rate. We are more worried about Microsoft than Google. Microsoft will address the Internet, but pulling down Office margins is a challenge for them. No company peacefully accepts a lowering of margins," Vembu said. "Our intention is to help erode Microsoft's profit margin, coming in from below." Zoho has built a more comprehensive suite of cloud-based apps than Google or Microsoft, and most of them are currently free to users.

Vembu cites the cost of sales and support as a drag on revenue per employee and profit per employee. "If salesforce is a proxy, it would be difficult for Google to justify the investment. More costs are associated with support than in R&D, even with on-demand software. The moment you have paying customers, the expectations are different, and Google is finding that out with recent Gmail problems," Vembu said. In addition, he noted that selling into small- and medium-size businesses is difficult, but the margin is higher than for large enterprise accounts. Adobe Systems and Intuit, for example, have more revenue per employee than Oracle or SAP.

Zoho's revenue per employee is mostly nonexistent given most of the Zoho suite is currently free and not-ad supported. Vembu estimates Zoho's revenue per employee will be in the $200,000 to $250,000 range when the revenue spigot is fully turned on at some undetermined point.

While Zoho behaves like a scrappy start-up, it is well-funded by India-based parent company AdventNet, which develops enterprise IT management software. AdventNet has 900 employees and is profitable, according to Vembu. "One of the privileges we enjoy as a private company is to not disclose revenue/profit numbers, which lets us do the kind of analysis on competitors they can't do on us," he joked.

The problem with Vembu's logic is that Google has an enormous pool of cash to invest in improving the economics of business and consumer productivity software suites. And, part of being a software company is having multiple and adjacent revenue and user data streams. Microsoft is a highly profitable software company with many adjacent divisions. Google Apps won't be as profitable as search, but it will be profitable and ties users into the Google platform and monetization engine.

If Google can attract consumers with its apps, gaining entry into small- and medium-size business won't be a huge profit-sucking sinkhole of sales and marketing. The search giant claims that more than 500,000 businesses and schools have signed up for the free and $50 per-user-per-year Google Apps. According to Dave Girouard, head of Google's enterprise division, the Google suite has about 10 million active users. Google can afford to invest in building the the market for Google Apps, and Microsoft will be forced to alter the economics of its Office business as cheap and capable cloud-based suites, with offline capabilities, gain traction.

What does that mean for Zoho? Run faster and hope that Google and Microsoft move slowly.