At Dreamforce, cloud-guru Marc Benioff converts’s most successful product — social collaboration tool Chatter — from paid to free.

Mr Dreamforce
Image by Simple Fox via Flickr

Marc Benioff wants to make enterprise software more like Facebook—social, viral and mobile. It’s all part of the CEO’s master plan to extend beyond his core customer base, sales professionals.

That’s why CRM is launching a free version of Chatter, its social collaboration tool for enterprises. Benioff announced the new product at the company’s annual user and developer lovefest in San Francisco on Tuesday morning, where he worked the crowd with his usual showmanship. (Highlights included pulling an iPad out of his pants and asking performer what he thought of the cloud. The Black Eyed Peas vocalist said he’s waiting for the day the cloud enables him to share music with his fans in real time, as he’s creating it).

According to Benioff, the paid version of Chatter is already its most successful product to date.’s biggest Chatter customer is computer maker Dell DELL , which has more than 100,000 employees connected, though it’s not clear how many of them are active users.

The new Chatter does look and feel a bit like Facebook. It lets users create profiles, update their status and share files. It’s also free, of course, and developed to be viral—employees can send their colleagues Chatter invites. Still, the paid version of Chatter (which costs $15 a month) comes with some extra bells and whistles, like allowing users to track business data.

To be sure, enterprise-focused social networks are nothing new. From large companies like Cisco Systems CSCO to small startups like Socialtext, everyone and their brother is trying to embed social tools into business applications.

What’s more, social networking may be sexy, but’s flagship, cloud-based customer relationship management software is still the real moneymaker. Even Microsoft MSFT is gunning for customers. Its latest move is promising a $200 rebate to customers who switch from (or Oracle) to Microsoft’s cloud-based customer relationship management software. It’s also got a new ad slogan that aims directly at “Don’t get forced. Get what fits.”

Benioff is no stranger to taking jabs at competitors; he took quite a few at his former employer and current rival, Oracle ORCL , while on stage at Dreamforce. And he’s probably not too concerned about losing major customers to Microsoft’s rebate program.’s recent quarterly earnings far exceeded analysts’ expectations, and it recently raised its forecasts for the current quarter, telling investors its revenue for the three months ending in February 2011 would be in the range of $447 million to $449 million, 5% higher than analysts’ median estimates.

Still, customer relationship management software is targeted at salespeople only, and wants to get all levels of the enterprise using its cloud. So is social networking (or a cloud-based database for developers, another new product unveiled at Dreamforce), enough to take the “sales” out of Unlikely, but it’s a good start.