The Blog

  • September 18, 2013
  • Salesforce and Workday Get Closer

    I started getting rumors last week when a reporter called me to ask about Oracle buying Salesforce.  She was riffing on the announcement over the summer by Larry Ellison, CEO of Oracle, and Marc Benioff, CEO of Salesforce, that the two companies would use some of each other’s technologies and make it easier for customers to use heterogeneous combinations of their products.

    I said, and still believe, that the Securities and Exchange Commission (SEC) in the U.S. or an equivalent body in the Euro-zone would not bless the marriage for the simple reason that Salesforce is both the market leader in CRM and the most significant independent vendor.  Buying Salesforce would leave Oracle, SAP, and Microsoft as the dominant players and because each is more of an ERP vendor than a CRM vendor, I fear — and I think the regulators would too — a slowdown in CRM innovation right when we need it the most.  So I don’t give that rumor much credence.

    Instead, what we got was an announcement today that Workday and Salesforce will develop closer ties to enable their joint customers to more easily use their integrated products.  This will be accomplished by the two companies making their platforms work better together.

    This makes a great deal of sense to me for many reasons.

    Enterprise business software today is less about individual applications than it is about processes and where application boundaries meet, a business process sometimes has to get off the highway and take a dirt road.  It can’t remain like this.  Dirt roads happen when there’s an inelegant handoff of both data and process metadata and too often, the solution of integrating the applications doesn’t do enough to pave the process path.

    At the same time though, vendors routinely put up roadblocks to their systems to preserve their differentiation and to a degree hold customers captive.  The term walled garden has its origins here, I think.  So in agreeing to merge platforms to a greater or lesser degree, these two vendors have, or will, greatly reduce those barriers and effectively provide a kind or pre-integration for their wares.  And since one is all about the front office and the other is back office oriented it looks like an ideal marriage.

    This has been a grail quest for decades going back to COBOL compilers.  COBOL may have been one of only four ANSI certified standard programming languages but that never stopped vendors from offering extensions that locked in customers and more to the point, each vendor had its own proprietary compiler that enforced the differences in the standards.  Get it?

    So making platforms semi-permeable, to borrow a phrase from biology, makes things better for the customer but it also does an interesting thing for the vendors.  In a way it greatly reduces the need to buy companies in an effort to merge software and extend the reach of the underlying merged business processes.  You don’t buy the dirt road, you just pave it.

    Salesforce seems to be taking the lead in using this tactic, which you’d expect from a company in their position — wanting to remain independent while offering the most flexibility to customers living with the reality of heterogeneous systems.  It is another example of the Blue Ocean strategy I keep hammering on because it elevates the discussion to process from application.

    At some point most vendors will need a similar approach, just as most now pay homage to cloud computing after bad mouthing it for years.  But I wonder what will happen in a few years when the software industry comes to resemble the European Union with no tariffs or boarder crossings.  Enterprise software could become one massive plasma of process and data.  What will the differentiators be?  Ideally it will be a further evolution of business services and probably information gleaned from analyzing a very large Big Data pool.  Or not.  I am not the best prognosticator, that’s why I keep watching and writing.

     

    Published: 4 years ago


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