There are two schools of thought about Salesforce. One is that the company is done disrupting the CRM sector, and is now too much of an established player with overheads to compete with lower rates or the likes of Zoho. Another set subscribes to the view that Salesforce is just gearing up with its Cloud platform, and is about to unleash havoc in the traditional CRM software market.
There is a lot of evidence to support the first school of thought. Salesforce now ( 2012) has more than 6,000 employees and the baggage of keeping shareholders happy. Their growth in the past few years has been less organic and more through a series of acquisitions (19 since 2006) such as Heroku and Radian6. Their rates ($65 per user for professional CRM and extra charges for add-ons, consultancy, training, etc.) can hardly be said to be competitive.
On the other hand, Salesforce is unmistakably in the right place at the right time. The market for on-premise CRM software like Goldmine and ACT is fading or at best stagnant as is the case for ProTracker. Meanwhile, new buyers of CRM applications are heading for the Cloud, and Salesforce stands to gain a big share of this market segment (CRM – Business Social Cloud).
A recent survey revealed that Salesforce has as much as 15 percent of the CRM share of firms with revenue more than $3 million. With more than 100,000 existing customers on the Salesforce cloud executing 36 billion transactions per day, Salesforce has exceeded a $2.3 billion annual revenue run rate.
During the company’s latest earnings conference call, Salesforce.com CEO and Chairman Marc Benioff said that they expect to reach a $3 billion run rate during FY 2013. However, what they are really looking at is that much more than just a cloud based CRM offering. Salesforce is pushing companies towards being a social enterprise. They have a very detailed plan of what a company has to do for this, and it is much more than creating a Facebook page and Twitter account and providing daily updates.
What Salesforce.com is aiming for is helping companies create different circles of social networks for employees, customers and products and integrating all of it with the help of tools and applications provided by Salesforce.
Many of their recent acquisitions are entirely meant to boost the company’s Cloud social business capabilities. With CRM as the core, Salesforce “sells” other social components as add-ons. Data.com pulls in information using crowdsourcing by monitoring social networks and helps targeted campaigns.
Another tool called Chatter allows customers to create an employee social network, which helps track employee activity and boosts production, reduces email usage and the number of internal meetings. Radian6 is an all-seeing social media monitoring tool that pinpoints what is being said and by whom.
The Service Cloud is yet another powerful tool that integrates service interactions on all channels, both traditional and through social media. It can even initiate video conferences using Facetime. Then there are Force.com and Heroku, which allow clients to develop and host their applications as a service, without having to buy or maintain hardware and software.
There is no denying that a Salesforce.com client who becomes a CRM customer and makes good use of these add-on social tools could earn a very good ROI using customer engagement on the networks. The only question is whether Salesforce is too far ahead of its time, and is the corporate world ready to become a social business?
Author: Cloud Consultant at CIONNE.com.
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