Salesforce.com seals Merrill Lynch mega-deal

Salesforce.com has announced a deal that will see Merrill Lynch become its biggest user, adding 25,000 subscribers to its on-demand CRM service.

Marc Benioff, CEO of Salesforce.com, wasted no time in hailing this as the latest evidence that the on-demand model for CRM and broader business applications is winning the war for the enterprise over more traditional on-premise rivals.

He said: "Merrill Lynch's decision to embrace on-demand is a clear indicator that the largest, most complicated, most technologically sophisticated deployments are now moving to the new model."

Today's announcement has been the subject of speculation since Benioff alluded to it last week during a results call.

Prior to today's announcement, Cisco and Dell were Salesforce.com's largest customers - with 15,000 subscribers apiece. Merrill Lynch has built on an existing relationship with Salesforce.com which started with 1,800 users.

The US financial services giant seemed a likely candidate to be the 'mystery customer' alluded to last week, given the announcement was timed to coincide with the launch today of a vertical offering from Salesforce.com for the financial services sector called Salesforce Wealth Management Edition.

However, with its 25,000-customer Merrill Lynch deal, Salesforce.com is still someway behind the largest CRM implementation of on-premise rival Siebel, whose 2003 deal signed with IBM covers 60,000 users.

But as Salesforce.com gains ground on more established rivals, Benioff added the Merrill Lynch deal is compelling ammunition for critics of the hosted CRM model who suggest companies should be wary of sensitive data being hosted outside their organisation.

Benioff said Salesforce.com now boasts 1,200 financial services customers.

Sharon Crawford, analyst at Quocirca, said the deal is a "significant" one and "will be a boost for all vendors trying to make their way with hosted financials and CRM, of which there are many".