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Salesforce.com Wants to Help You Transition to a Customer Company

Written By: Predrag Jakovljevic
Published On: May 1 2013

Coincidentally or not, my industry analyst career started at about the same time that salesforce.com was founded, back in 1999. And boy, has the vocal cloud software company had an amazing transition over the years—once dismissed as a fad-like niche sales force automation (SFA) vendor with glorified contact management capabilities, salesforce.com is now a $3 billion (USD) enterprise software powerhouse. Whether one likes salesforce.com CEO and founder Marc Benioff’s bluster or not, the vendor is now indisputably a member of the elite enterprise applications club, joining the likes of SAP, Oracle, Infor, Microsoft Dynamics, Dassault Systemes, Autodesk, and Sage Group. What more poignant example of the “old school” vs. “new school” contrast could be pointed out than the fact that Obama’s 2012 campaign used salesforce.com to monitor voters’ inquiries in real-time in the cloud while Romney’s 2012 campaign used an on-premises Oracle solution (that famously erroneously predicted a landslide victory for the Republicans).


Meeting the Needs of the Customer Revolution
During its journey from being a cloud computing pioneer to today being the number one enterprise cloud software company (with the invariable value prop over the years of no hardware required, a software subscription model, automatic upgrades, and constant innovation, with no annual maintenance costs), salesforce.com acquired over 20 companies and harnessed many more modern technologies to help its customers find new ways to connect with their customers and better handle the so-called “customer revolution.” This ongoing revolution comes in multiple waves, starting with the cloud revolution (cloud computing was a $111 billion (USD) industry in 2012 with an 18 percent annual growth rate) and its new ways to connect everything (people and multiple devices). Other pieces of the customer revolution are as follows:

  • Mobile revolution: Touch-based and location aware apps are enabling companies to reach customers in many new ways almost anywhere—1.7 billion touch devices were shipped in 2012.

  • Big data revolution: Provides new ways to gain insights about customers by collecting customer, product, and usage data—there will be 450 billion business transactions per day by 2020, according to IDC.

  • Social revolution: Gives companies new ways to connect with and engage their customers on social channels and share feeds, profiles, groups, and files—there are reportedly 4.5 billion social network users nowadays.

  • Community revolution: Allows new ways of collaboration for customers, employees, and partners. Companies can create private and public communities with single sign-on (SSO) capabilities with secure and portable identities across disparate apps.

  • Trust revolution: It’s all about new ways to build relationships on equal terms and earn customers’ trust by respecting their privacy, identity, and money (including their time).

  • Apps revolution: A proliferation of devices (smart phones, cars, vending machines, appliances, etc.) that nowadays all have equal technical capabilities to a PC, means that every company is an application company. Some of salesforce.com’s customers use their own apps to interact with their customers, which requires an astute customizable software platform.


Becoming a Customer Company
The shift to social and mobile cloud computing (where every customer has a voice through social and mobile technologies and expectations for immediate engagement and gratification) has empowered companies to connect with their customers in entirely new ways and become what salesforce.com calls "customer companies." The vendor defines customer companies as those that listen to every customer, engage equally well on every channel, and deliver great customer service everywhere (seamlessly across the channels). They sell as a team, connect their products and services to social networks and communities, and deliver apps on any device.

During its recent Customer Company Tour event in Boston, salesforce.com outlined the following seven “connected” ways and concrete examples of how some of its renowned customers have become a customer company using multiple salesforce.com products:

1.    Connected Partners: How do you create customer, partner, and employee communities? GE Capital leverages the Salesforce Chatter social networking tool (in part based on the GroupSwim and DimDim acquisitions) so that its employees, customers, and partners can collaborate with real-time feeds, files, and updates. Reportedly, the company has cut down in-person meetings by 30 percent via Chatter communities.
2.    Connected Employees: How do you sell as a team? NBCUniversal uses multiple saleforce.com products starting with the original Salesforce Sales Cloud offering and Chatter where its employees can collaborate on deals and opportunities. Salesforce Data.com (formerly Jigsaw) helps them enrich their prospects’ profiles, while Work.com (formerly Rypple) helps with motivating and aligning sales teams (via social performance reviews, badges, and gamification). The company has reported a 27 percent increase in sales as a result.
3.    Connected Employees: How do you service customers everywhere? Activision uses Service Cloud, salesforce.com’s fastest growing offering for multi-channel customer service and support (based on the acquisitions of Instranet, Activa Live Chat, and Assistly). The company reports 37 percent improved customer satisfaction with Service Cloud’s real-time problem resolution.
4.    Connected Customers: How do you listen to every customer? Consumer Electronics Show (CES) uses Salesforce Marketing Cloud (based on the Radian6 and Buddy Media acquisitions) to build a Social Media Command Center. The event organizers report 94 percent improved brand monitoring with the Marketing Cloud’s ability to listen, engage, advertise, and measure social marketing.
5.    Connected Customers: How do you engage on every channel? Burberry uses Sales Cloud, Service Cloud, and Marketing Cloud to deliver a consistent customer experience for its luxury brands. It reported 37 percent improved campaign effectiveness with Salesforce Marketing Cloud.
6.    Connected Products: How do you connect your products? Toyota uses Salesforce Platform to transform its cars into information devices with wheels. With the Toyota Friend social network, your car can communicate to you on social networks, anticipate your needs, and offer the right services. There are currently 1.7 billion networked PCs and there will be 3.5 billion networked products by 2015 according to IDC. Benioff pointed out jokingly how sometimes he starts his Toyota Prius at home remotely from his smartphone thousands miles away from home just to give his significant other the heebie-jeebies.
7.    Connected Products: How do you become an apps company? Coca-Cola is using Salesforce Platform for fast and easy creation of mobile and desktop apps. One example is the ability for customers to mix their own custom drinks beforehand on their smartphones, and then get them at a vending machine (see ). Salesforce Platform consists of Heroku for customer/consumer-facing apps and Force.com for employee-oriented apps.

Customer Company Offering
After nearly 15 years of existence and 25 or so acquisitions, salesforce.com has garnered an impressive product portfolio (Figure 1). The vendor recently launched the next generation of its enterprise social network with social and mobile customer relationship management (CRM) in mind. With the latest iteration of Chatter, salesforce.com is offering new features that let companies access, create, and act on customer information within salesforce.com’s solutions in the Chatter feed, from any device. Search capabilities have also been significantly improved.

salesforce.com architecture

Figure 1 - Salesforce.com architecture.

Touted as the future user interface (UI) and an integral component for all salesforce.com apps, the new Chatter lets companies access all customer information stored inside salesforce.com’s solutions including customer accounts, campaigns, cases, leads, opportunities, and custom apps built on top of the Salesforce platform. Users can get real-time updates such as quote approvals, service inquiries, or social conversations to connect with customers in the abovementioned new ways. Users can also act on updates around contacts, accounts, opportunities, campaigns, and custom records directly from the feed. For example, a sales rep in a taxi cab can see a deal update in the real-time feed and send the necessary files and info to close the deal, making every moment actionable.

Chatter also now lets users create and edit information and notifications from the new Publisher capability that will let them scroll through a variety of actions including files, photos, polls, tasks, and thank-you notes. In just a couple of taps, users can create a task, edit a contract or even create a custom action (scheduled to be available the second half of 2013). Salesforce Chatter is optimized for Android phones and Apple iOS devices. It is generally available now and included with all salesforce.com editions. The Salesforce Chatter mobile application is free for all salesforce.com customers.

Keeping ahead of the curve
Salesforce.com is nowadays much more than a commoditized cloud CRM provider. In addition, the company’s AppExchange marketplace currently features over 1,700 solutions that have had 1.6 million installs and have contributed $700 million (USD) in total revenue to salesforce.com’s partner ecosystem. Reportedly, 70 percent of the Fortune 100 companies have installed an app from the marketplace.

But what other functional realms will the company have to tackle to remain ahead of the curve and the larger “old school” competitors (that will inevitably catch up)? Competition is coming from other directions too, such as from lower price alternatives such as Zoho and SugarCRM, while Red Hat is also readying its open source public cloud platform OpenShift Online (the private cloud version of OpenShift Enterprise is already available). Some skeptics are also pointing out the company's lack of profitability (at least in a consistent manner) and its questionable financial reporting approach. Are salesforce.com’s ongoing acquisitions and hefty marketing expenditures the necessary means for the company to continue its stellar growth or perhaps ways to muddy the financial reporting waters and have more excuses for losses and/or slim profits? Only time will tell.

The vendor believes that the larger “old school” competitors will not inevitably catch up because it is in salesforce.com’s DNA to continuously innovate and meet its customers’ needs. For the other companies to catch up, salesforce.com would have to be standing still, but it is moving aggressively and continues to innovate and stay ahead of the curve. As an example, during the short time between the Boston event in late March 2013 and now, the company has announced Social.com – the latest in a veritable stream of announcements this year (and it is only April).

Social.com is a self-service social advertising application for creating and automating social ad campaigns. Social.com, Radian6, and Buddy Media together make the aforementioned Marketing Cloud. The advertising capabilities come from the Brighter Option acquisition Buddy Media made a few months before salesforce.com acquired it. The social ad buying tool by Brighter Option has been integrated in Buddy Media for a while, but salesforce.com has since worked on and developed new features.

I think that a next functional frontier for salesforce.com could be distribution management and/or interactive e-business/store fronts like Amazon. The company could also move into the realm of product lifecycle management (PLM) and new product introduction/ideation, mostly for less complex products. In fact, salesforce.com already has an ideation product, from the Kenlet acquisition in 2007, whose original product CrispyNews has been used at Salesforce IdeaExchange, and is now called Salesforce Ideas.

Generally speaking, while companies can provide apps that are customer focused, the rest of the enterprise must be able to align with this new strategy. Some manufacturing companies have, for example, put in advanced planning and scheduling (APS) solutions, but all too often the central enterprise resource planning (ERP) system was not able to easily adapt to the speed of change that the APS provided (e.g., lot allocations in ERP were too rigid). Too often, this would require a new ERP or a significant re-implementation effort. For services companies or specific business processes, the change might not be too hard to implement, but changing a whole ERP system will always be a challenge.

Recommended Reading:

Inside Look at the Success of Cloud Field Service Provider ServiceMax (April 2013)
Salesforce Social.com, So Not Like Mad Men (April 2013)

Chatter to Become the Primary Salesforce Interface (March 2013)
Inside the Age of Social Enterprise with Salesforce.com (October 2011)
Do You Want Your App to Talk Back to You (as a Chatterbox)? – Part 2 (June 2010)
 
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