After the Revolution
"There’s a lot of opportunity for us to look more strategically at a lot of our partners and customers and look more aggressively at acquisitions."
In addition to all the resources dedicated to making Force.com a reality, Salesforce.com has made a few major application moves over the last two years. These countered some of the loudest criticisms levied against the company while expanding offerings and plugging holes—holes that, in some cases, had purposely been dismissed as not being holes at all. Some of these concerns dated back to the earliest days, when Benioff admits that moving forward quickly was more important than pleasing everyone thoroughly:
Salesforce.com’s customer service offerings have always taken a backseat to the sales products. Doesn’t matter what seat it’s in, there’s a new driver in Salesforce CRM, and its name is Service Cloud 2. Blame Benioff’s inner salesman, blame CRM’s organic roots within SFA, blame the old lack of integration—there’s plenty of blame to go around, but Benioff himself admits that the company never quite perfected its customer service pitch. The brands themselves were hard to pin down, from Supportforce to Salesforce Service & Support. But if SFA feels played out, as the drop in annual-revenue growth may imply, then you can understand Benioff’s enthusiasm, and why a company PowerPoint calls customer service its “next billion-dollar opportunity.” (See “At Your Service—But Not Yet?,” page 40, for more on Service Cloud 2.)
Salesforce.com forgot the little guy. Ten years later, the company finally remembered, with Salesforce Contact Manager Edition. The monthly cost? Just $9 per user, exclusively for one- and two-seat users. As Denis Pombriant, founder and managing principal of Beagle Research Group, wrote on our destinationCRMblog at the time, the offering “covers a base that Salesforce.com intentionally left open while building itself up from an SFA-only application to a full CRM suite.”
Salesforce.com can’t help with your financials. Over the years, various third parties, including Coda 2go, Intacct, and other AppExchange players and plugins, attempted to tackle this outside of Salesforce.com’s purview, but Benioff took a big bite of this apple in September, with the minority stake in FinancialForce.com.
Paul Greenberg, president of consulting firm The 56 Group and a CRM magazine columnist, recalls that a financial application suite had always been on Salesforce.com’s to-do list, but the company just wasn’t ready at the time of its 1999 founding—when it was focusing instead on perfecting the SFA component. Calling this latest turn of events “a terrific move,” Greenberg notes that, at this point in Salesforce.com’s life cycle, the SaaS pioneer has the ability to “compete in any market they want to.” On top of that, he says, if participation in a joint venture is a sign of how Salesforce.com is approaching its growth strategy, there also isn’t much risk of overextension.
Ray Wang, partner at Altimeter Group consultancy, calls the FinancialForce.com venture “very interesting,” expanding the Salesforce.com ecosystem as partners and customers tie in capabilities to utilize the financial data. “This completes that loop,” Wang says. “You could do it before with point-to-point integration...to tie back that information, but now, because it’s built into the [Force.com] platform, it’s easier to extend and maintain.”
Salesforce.com’s missing the social media scene. Hardly. As if Marc Benioff would pass up the hottest technology around. Salesforce.com was on top of social media very early on, primarily, as Benioff says, because his employees would have it no other way. They were using these technologies in their personal lives, and the drive to embrace them led to the development of the Faceconnector integration between Facebook and Salesforce CRM, spearheaded by Clara Shih, who recently left the company to found Hearsay Labs, a SaaS provider of B2C sales and marketing software. (See her Connect column, “Facebook Is the Future of CRM,” page 12, for an extended look at her view; an excerpt of her book, The Facebook Era, appeared in CRM’s June 2009 issue on social media.)
With Service Cloud integrations already in place for Facebook and Twitter—and plans to extend that effort into the Sales Cloud, Salesforce.com won’t be standing still here.
But the cloud is where Salesforce.com is hitching its wagon long term. “Salesforce.com probably deserves—as much [as anyone], if not more—credit for popularizing the idea of cloud computing,” says Jeff Kaplan, founder of SaaS consultancy ThinkStrategies.
The problem with popularity is it draws attention—and as much as Benioff says he values competition—in the book, he writes of the early efforts around “opportunities to leverage our competitor’s activities for our own benefit”—but only if it’s competition on his terms, or against a competitor prone to gaffes.
The upstart sees validation in every acknowledgment and halfhearted defensive maneuver. Siebel Systems buys on-demand CRM player UpShot, and that’s validation of Salesforce.com’s business model. Oracle buys Siebel, and that’s validation of Salesforce.com’s move upmarket. Microsoft and SAP stumble out of the starting blocks in developing hybrid and on-demand offerings, and that’s a validation of Salesforce.com’s contention that enterprise demand is developing.
But the market leader doesn’t need validation. In fact, the market leader doesn’t really want validation. The market leader simply wants to lead. There’s little evidence that Benioff or Salesforce.com has any intention of leading its peer group, not when throughout its history the company has made a point of ignoring its peer group in favor of aspirational antagonism—or what Benioff calls “boxing above your weight.”
So another gladiator must be goaded, another naysayer made to neigh. No sooner had Salesforce.com ascended its SaaS throne than it began pointing its stick at a new target: “Part of our mission is to end Microsoft,” he told BusinessWeek in 2007.
The real cloud wars may come sooner than you think—and sooner than Benioff and Salesforce.com would prefer. As Len Couture, the managing director of cloud-computing services with on-demand integration provider Bluewolf, says, “The battle has yet to be borne out.” In fact, Salesforce.com may turn out to be its own worst enemy if its success in establishing SaaS applications has taught traditional software vendors a thing or two about this kind of warfare.
As SaaS cloud-computing efforts at those vendors—such as Microsoft, SAP, and Oracle—are inching along, Salesforce.com’s window of opportunity may be closing. “It’s trying to demonstrate its competitive edge against…those legacy companies that are having a tough time transitioning their business models to a true on-demand environment,” Kaplan says.
Someday, perhaps surprisingly soon, Salesforce.com may have to begin poking its stick at Google as well. For the moment, Salesforce.com has been content to ride Google’s consumerized coattails into cloud computing, capitalizing on its Salesforce for Google AdWords edition, and then Salesforce for Google Apps, and, at press time, noodling around an integration with the Google Wave communication portal.
But
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