Salesforce Strengths, Domain Expertise, and Key Differentiators
Salesforce revved up its expansion by acquiring Tableau for $16 billion in 2019, a little over a year after it bought Mulesoft for $6.5 billion. The combined contributions could add anywhere between $1.3 billion and $1.5 billion in incremental revenues in 2019, or at least 10% of its fiscal 2019 sales. However, Salesforce would also see license revenues rising sharply to more than $500 million, a big chunk for any Cloud-native vendor. The upside is that Salesforce will be able to leverage the business intelligence and data visualization products from Tableau to shore up its nascent artificial intelligence and analytics offerings. Salesforce users will benefit from the API capabilities of Mulesoft to better connect their different Cloud and non-Cloud applications, while fundamentally changing the way they manage their own customers using Tableau’s BI tools to generate interactive reports, discover new trends and improve how decisions are being made. However the integration between Salesforce and Tableau was being held up by the UK’s Competition & Market Authority as of October 2019, two months after the deal closed. Regardless of the outcome, the pace of growth has not diminished an iota at Salesforce and its customers can find comfort that the company will take any measure to stay relevant not just in Cloud software delivery, but ultimately becoming an enterprise software leader at all costs.
Salesforce Recent Developments
Along with its rapid-fire acquisitions of Tableau, Mulesoft and ClickSoftware over the past year, Salesforce has strengthened its core CRM offerings. In July 2019 Salesforce delivered new conversation channels in Salesforce Essentials, the all-in-one CRM solution built specifically for small businesses. Now small businesses can easily manage and engage with customers on their preferred channels including Facebook Messenger, Instagram, and YouTube—all while having a single view of the customer. In June 2019 Salesforce launched new Einstein AI enhancements to Marketing Cloud that will empower brands to increase customer engagement with relevant and timely email marketing messages. Einstein Engagement Frequency enables marketers to know the right number of emails to send to customers based on their previous interactions. New email marketing enhancements include Einstein Engagement Frequency, Einstein Send Time Optimization, Einstein Content Tagging, and Transactional Messaging. What’s more important is Salesforce’s embrace of low-code and business flow attributes by introducing Lightning Order Management for its eCommerce Cloud customers speeding up order lifecycle from shopping through shipping and delivery.
Salesforce Mergers and Acquisitions (M&A) Activities
In June 2019 Salesforce acquired Tableau for $15.7 billion, its biggest purchase to date. The deal happened only months after completing its acquisition of Mulesoft for its API integration products. Over the past year, Salesforce has also made a number of other important acquisitions including Bonobo AI, MapAnything, Griddable.io, Rebel, Datorama, CloudCraze, Attic Labs and ClickSoftware all in hopes to bulk up in areas such as marketing intelligence, artificial intelligence, location-based workflow, and field service management. Apparently, Salesforce is eagerly stepping into the role of a consolidator when many of these partners and upstarts are motivated to sell before the window closes.
Salesforce Customers in ARTW Customer Database
Leveraging a rigorous data-centric research methodology, APPS RUN THE WORLD ask the simple question: Who’s buying Salesforce applications and why? And we provide the answers – supported by decades of research – to our clients around the world. Our Customer database has over 100 data fields that detail company usage of Salesforce and other enterprise apps by function, customer size, industry, location, implementation status, partner involvement, Line of Business Key Stakeholders and IT decision makers contact details. List of Verified Commerce Cloud Digital, Community Cloud, Marketing Cloud, Sales Cloud, Salesforce Commerce Cloud, Salesforce Quote-to-Cash, Service Cloud, Wave Analytics customers.
Ownership: - CRM : NYSE
Number of Employees: 35000
Key Verticals: Aerospace and Defense, Automotive, Banking and Financial Services, Communication, Construction and Real Estate, Consumer Packaged Goods, Distribution, Education, Government, Healthcare, Insurance, Leisure and Hospitality, Life Sciences, Manufacturing, Media, Non Profit, Oil and Gas, Professional Services, Retail, Transportation, Utility,
Salesforce Key Enterprise and Cloud Applications
Commerce Cloud Digital, Community Cloud, Marketing Cloud, Sales Cloud, Salesforce Commerce Cloud, Salesforce Quote-to-Cash, Service Cloud, Wave Analytics
Salesforce Revenues, $M:
|Type/Year||2017||2018||YoY Growth, %|
|Total Revenues, $M||Subscribe||Subscribe||Subscribe|
|Enterprise Applications Revenues, $M||Subscribe||Subscribe||Subscribe|
|Cloud Applications Revenues, $M||Subscribe||Subscribe||Subscribe|
* Enterprise Applications Revenues = License + Support & Maintenance + SaaS
** All revenue figures are estimates based on public records, Cloud and Non-Cloud business models in Apps Run The World's vendor database, and annual survey results including vendor feedback.
Salesforce Revenue Breakdown By Type, $M:
|Type||License||Services||Hardware||Support & Maintenance||SaaS|
|% of Total Revenues||Subscribe||Subscribe||Subscribe||Subscribe||Subscribe|
Salesforce Enterprise Applications Revenues By Functional Markets, $M:
Salesforce Enterprise Applications Revenues By Verticals, $M:
Salesforce Revenues By Region, $M
|Region||% of Total Revenues||2018 Total Revenues, $M||2018 Enterprise Applications Revenues, $M||2018 Cloud Applications Revenues, $M|
Salesforce Direct vs Indirect sales
|Region||Direct Sales||Indirect Sales||Total|
Salesforce Customers - Breakdown by Geo, Size, Vertical and Product
No. of Salesforce Customers: 150000
No. of Salesforce Enterprise Applications Customers: 150000
No. of Salesforce Cloud Customers: 150000
No. of Salesforce Cloud Subscribers: 10 million
The acquisition of Tableau is expected to add 86,000 customers to Salesforce’s current base of 150,000 accounts. While there are overlaps between the two, it’s fair to assume that the purchase will allow Salesforce to increase its wallet share among its clientele. Additionally, the Mulesoft purchase has already added at least 1,200 customers, while the August 2018 deal to buy Datorama for its marketing intelligence products provided access to another 3,000 customers including PepsiCo, Ticketmaster, Trivago, Unilever, Pernod Ricard and Foursquare. What’s noteworthy is the size and evolution of Salesforce’s installed base. Six years after its founding, Salesforce’s customer count topped 10,000 in 2005, broke the 100,000 barrier in 2012, then setting in at around 150,000 in 2015. After refraining from disclosing customer growth metrics for an extended period of time, Salesforce disclosed the current count of 150,000 when it announced its purchase of Tableau in June 2019. Clearly, there has been attrition among many of its customers coupled with changes in its approach by selling more through its ISV partners and third-party channels. By contrast, both Oracle and SAP have been touting the steady growth of their installations from under 100,000 to a milestone of nearly 500,000 customers each over the past decade. The acquisition of Tableau underscores strategic shifts as Salesforce starts embracing the on-premise model, while forging ahead to boost its wallet share and market reach by targeting hundreds of thousands of customers around the world.
Salesforce Market Opportunities, M&A and Geo Expansions
Salesforce’s purchases of Tableau and Datorama are the latest examples of the CRM champion wanting to extend its reach into the data world by making it easier for its customers to better manage, manipulate and visualize data. The Tableau purchase was easy to understand given Salesforce’s heavy investment in Wave and later Einstein, all of which now form the basis of a slew of analytics and visualization tools for customers to drive better sales, eCommerce, marketing and customer service and support outcomes. The Datorama deal is meant to put all performance, outcome and investment data sources that cover everything from online advertising to survey data all in one place in order to boost marketing intelligence, according to Ran Sarig, CEO of Datorama. In other words, it’s another way for Salesforce to help customers harness the rich data sources they are confronted with every day through the use of algorithms. Datorama said its customers can unify hundreds of data sources into a single narrative for running better marketing campaigns for marketers, billing and finance executives. It remains to be seen how Salesforce is tapping into the data-driven market opportunities, almost a decade after buying Jigsaw, which was one of its major forays into data services market. That did not get Salesforce to dominate a space that has spawned hundreds of data providers. What Salesforce is counting on is that it would like to provide more tools to manage the onslaught of data. Its recent acquisition of MapAnything for managing location-based workflow is another example. As Salesforce continues to expand its product portfolio, the August 2019 purchase of ClickSoftware for its field service management applications suggested that Salesforce is doing everything possible to automate the common business processes within the confines of CRM – sales force automation, marketing and customer service. Now the challenge is to deliver the ability to make sense of every bit of data that gets captured across the entire customer lifecycle.
Salesforce Risks and Challenges
For most of its history, Salesforce was an active consolidator only in the sense of picking up assets that were considered complementary to its CRM offerings. Most of its 60+ acquisitions that it made were tucked-in and small. Only the deals to buy ExactTarget in 2013 and Demandware in 2016 exceeded $2 billion each. Not anymore. Between 2018 and 2019, Salesforce spent at least $23 billion on a host of acquisitions from Tableau, its biggest purchase at $15.3 billion, to the latest ClickSoftware for $1.4 billion. In short, its acquisition spree in the past 20 months was three times it spent on all of its deals between 1999 and early 2018. Clearly, the sudden strategy shifts were done to preempt any more incursions into its CRM base by key competitors like Adobe(Marketo and Magento), Oracle(Datafox and Grapeshot), Microsoft(LinkedIn and Github), and SAP(CoreSystems, CallidusClouda and Qualtrics). Instead of buying Zendesk, Shopify or even Veeva to ring-fence its CRM core, Salesforce went looking for solutions in API integration and visualization tools. The first risk is that it will take years to drive synergy across a much bigger footprint. Salesforce is actually positioning the home base of Tableau in Seattle as its second headquarters. Another risk is that cross-selling and upselling its apps into customers of Mulesoft and Tableau could prove to be onerous given that both are designed to support many other CRM platforms beside Salesforce. Still, one has to admire the risk-taking nature of Salesforce by always staying ahead of its competition – first with Sales Force Automation, followed by its end-to-end approach as the Customer Company. Today, Salesforce is surrounding itself with customer-facing apps and a suite of data-driven tools to run a gamut of solutions including those from its competitors. Instead of barricading itself in a fortress, Salesforce is welcoming in other products by integrating and displaying them – warts and all. Only then might customers be able to fully appreciate what’s working and what’s not.
Salesforce Ecosystem, Partners, Resellers and SI
Salesforce expanded its Pathfinder program globally in collaboration with Deloitte, starting in the San Francisco Bay Area. The expansion will double the company’s original commitment to train 500 people by the end of 2020 and will train an additional 500 people over the next three years — 1,000 total. The four-month workforce training program launched in Indiana in 2018, and has since trained more than 150 community college students and veterans, helping prepare them for jobs in the Salesforce ecosystem as administrators and developers. Pathfinder graduates have been hired by top employers, including Deloitte, which has hired more than 10% of graduates to date into internships and full-time roles. Salesforce has strengthened its new Vetforce Alliance in partnership with Accenture Federal Services and Prudential, a financial services leader, to prioritize and accelerate interviewing and hiring of the military community across the country. Accenture and Prudential are committing to conduct job interviews for all military participants who complete the Salesforce Vetforce program. Salesforce AppExchange, the world’s leading enterprise cloud marketplace, empowers companies to sell, service, market and engage in entirely new ways. With more than 5,000 solutions, over 6 million customer installs and 80,000+ peer reviews, it is the most comprehensive source of cloud, mobile, social, IoT, analytics and artificial intelligence technologies for businesses. The AppExchange includes 74 applications categorized for ERP. The evolving Salesforce ERP ecosystem remains a moving target. For example, Veeva, a long-time ERP Service and Operations Management ISV partner, represents $500 million in sales for Salesforce under a 10-year deal through 2025. Since 2017, Salesforce might have had second thoughts by signing a series of deals with IQVIA, Veeva’s archrival in the life sciences industry, to sell each other’s products into the same vertical. At one point, Salesforce was rooting for manufacturing ERP partners including Kenandy, which saw lackluster results before its recent merger with Rootstock. The same applies to its 2015 partnership with Sage, which has yielded a Cloud ERP product called Sage Live, which recently has been renamed Sage Business Cloud Financials. That follows Sage’s 2017 acquisition of Intacct, which appears to be the focal point of its Cloud accounting strategy. Amid disappointing Cloud results, Sage ousted its CEO Stephen Kelly, who was instrumental in its partnership with Salesforce.
Salesforce Cloud Infrastructure Insights
Subscribe to read more about:
- Salesforce Public Cloud and Infrastructure (IaaS)
- Salesforce Platform (PaaS)
- Salesforce Application Delivery
- Salesforce Private Cloud and Data Centers
Data used in research reports are derived from publicly available documents, continuous surveys of applications vendors, customers, resellers, Independent Software Vendors, systems integrators and other verifiable sources.
Vendor shares and market forecast results are based on a combination of existing databases as well as demand side and supply side research conducted throughout the year with validation from vendors, customers, channel partners and documentations such as earnings releases and 10Q and 10K filings, vertical industry studies, regional and country-level statistics from public and private institutions(i.e. colleges, universities, government agencies and trade associations).
For additional information on our methodologies, here's the link:https://www.appsruntheworld.com/About Us
Copyright © 2019, APPS RUN THE WORLD