Salesforce

  • May 9, 2019
  • In The New York Times the other day, Kara Swisher was doing a pretty good impression of a woman at her wits end over social media’s part in recent killings such as in Sri Lanka over the weekend and in New Zealand a few weeks ago.

    She wrote in part, “[S]ocial media has blown the lids off controls that have kept society in check. These platforms give voice to everyone, but some of those voices are false or, worse, malevolent, and the companies continue to struggle with how to deal with them.”

    Indeed, the social media community seems tied up in knots over what to do about all the abuse happening within their communities but if you look elsewhere you might see signs of solutions that could solve some fundamental problems.

    There’s been a chorus of calls from all corners for social media regulation from pundits like me to the halls of congress and even Mark Zuckerberg himself. A few weeks ago, Zuckerberg penned an editorial in The Washington Post saying that the first things we should work on or regulate include, “harmful content, election integrity, privacy and data portability.”

    But a quick look at the CRM industry and its use of social media coupled with analytics far outpaces anything Zuckerberg’s company is even dreaming about. The solution that works well in CRM occurs almost by accident and companies like Salesforce are bringing solutions to market based implicitly on a few ideas that the greater social media community could emulate.

    Salesforce’s accidental model

    Last week I covered some Salesforce announcements and two that stick out are the Einstein Prediction Builder which enables admins and developers to build AI models for apps running on the Salesforce Platform and the other, Einstein Predictions Service enables admins to embed Einstein AI analytics into third-party systems. Here’s what’s interesting about them.

    The salesforce customer organization owns its data which is stored in Salesforce and it is discriminate about who gets to access it. Each organization manages a minimal set of rules about who can use its data, what it can be used for, and things like frequency of use. It also tracks who uses the data and for what purpose up to the point of providing reports on customer responses. These are some of the elements of a broader and more professionalized use of social media that could be implemented without a lot of fanfare.

    The essence of regulation in our society is that it is bottom up not top down. We just finished tax season and very few of us ever had to consult with a government official or agent who told us what to do and how to file. Instead some of us might file by ourselves and a growing number of tax preparation professionals and software firms handle the rest of the load.

    We don’t take our taxes to the barbershop, we take them to people who are certified to do taxes either through specialized training in a tax course or who are trained accountants and lawyers. Also, if you don’t calculate your own taxes the person who did is supposed to sign the form too. That’s everything we should expect in finding solutions to the current social media mess.

    Specifics

    And it isn’t only tax filing that operates this way. Consider plumbing and electrical work. You are welcome to do it yourself and many people do but for most people and more complicated jobs we’ll gladly hire professionals because they have the right tools and experience. They also have licenses administered by the state which enables them to get a building permit whenever the need to. A job without a permit is liable to be shut down by your municipality for good reasons. Safety and zoning laws are enforced by permits and they help the community to maintain standards and prevent wildcats from doing funky things with the plumbing infrastructure or electric grid.

    But there’s a glaring exception when it comes to social media. What was once seen as an elaborate email system has grown to become a world-girding data gathering and analysis effort to help customers gain insights into people’s actions and motivations. By the way, a customer is, as always, the one who pays the bill and for most social media users that’s not you. You’re another category called product.

    A humble proposal

    Zuckerberg might have a few good points, but he proposes a top down approach when bottom up is much more effective. Top down approaches are often derided as bureaucratic and they are because they require laws to cover all contingencies. In a bottom up world, individuals with a good amount of training make the calls which might not be a perfect situation either but applying local facts to decision-making beats a blizzard of rules.

    So, here’s the pitch. If we had a two or three tier approach to social media certification, we could solve a lot of problems. Uncertified do-it-yourselfers could still operate on a personal level but possibly with some restrictions on number of contacts. By analogy you can mess up your own plumbing but not your neighbor’s. A do-it-yourselfer named Mad Dog shouldn’t be able to blast to the world if you recall the purpose of social media is keeping up with personal relationships.

    Professional users ought to be required to have as much knowledge as a hair stylist to get a certification and mad dogs need not apply. Real names please. Professionals should be required to put their names or license numbers on their work just like an electrician pulling a building permit.

    My two bits

    I am under no delusions that these suggestions would change everything about the social media landscape and perhaps that’s a good thing. Social is successful because it’s spontaneous and it fills a need for maintaining human contact. People beyond the age of reason don’t like being told what to do so any regulation needs to be handled with a light touch. Placing responsibility with the actor fosters a sense of agency, a powerful tool for spreading and sharing responsibility. It works in a lot of places. We should try it in social.

     

     

    Published: 2 months ago


    The other day Salesforce announced that it was integrating its philanthropic arm, the non-profit Salesforce.org, into the larger organization, Salesforce.com. This makes a round trip for “the org” as it’s sometimes referred to. At its founding Salesforce built its 1-1-1 model of philanthropy, in which it donated one percent of its equity, product, and employee time to communities around the world, into its core business.

    As you can imagine, such an endeavor starts slowly but builds momentum over time and to date Salesforce has donated over 3.8 million hours of employee time and more than $260 in grants. But at some point a few years ago, Salesforce created the org as a public benefit corporation under California law.

    That all went along swimmingly until the org developed its own vertical apps including the Salesforce Philanthropy Cloud, Nonprofit Cloud, and Education Cloud and voila, the org was in the software business. But it might not have had all of the resources a software company needs so merging seems sensible.

    Salesforce has been playing both a long game and a short one for a long time. The short game is easily understandable–they sell seats of use to corporations. This can include the company’s flagship CRM, partner apps, or development tools for those who want to roll their own apps. This makes perfect sense in the software business.

    The longer game, which takes some explaining, is more about culture transfer. As the company has evolved it has helped set standards for modern business and it has used what it built in an eat your own dog food way. That’s partly responsible for the Salesforce culture and it’s something the company is not shy about exporting.

    Cloud computing is a good early example of culture transfer. The cloud commoditized computing and made it possible for businesses to both get better and more reliable computing while also saving money. Today there’s virtually nothing you can do in your data center that you can’t do in the cloud, except maybe get hacked.

    Cloud wasn’t the only innovation, there’ve been major inflections in social media, and analytics just to pick a couple. At each point the company was selling more than software, it was teaching businesses new approaches and ways of doing business and with that come culture changes. Consider analytics and machine learning. Most of us will consider this just the latest new wrinkle in an industry that has had more than its share. But it leads to a culture change which is what digital disruption is–learning to trust numbers over gut instinct.

    The thing is, they’ve been at this so long that Salesforce is actually addressing a new generation of customers and users now and that’s why philanthropy, non-profits and education are so important. It’s doubtful that any of the clouds from the org will generate serious income for businesses that use them. But the real test of their value is in how they help businesses manage culture change.

    There have been numerous studies linking a business’ philanthropic efforts with employee job satisfaction and the younger the employee the more significant the effect. Philanthropy Cloud in particular has been instrumental in helping Salesforce to spread its 1-1-1 model around the business world. For instance, there are well over two thousand businesses that have adopted the model, and more being added weekly. But also, major players in the philanthropy world like The United Way, are big users and proponents because the Philanthropy Cloud helps non-profits extend their missions.

    So, it’s not too surprising to me to see the two corporations coming back together. Increasingly it’s likely that the non-profit/philanthropic/education solutions will have positive drag-on effects wherever the core technology goes. This looks like one more culture change sponsored by Salesforce and it might be the one with the most lasting power. Social techniques and analytics will be absorbed and blend into a company’s background, but this is different.

    Nearly four decades ago business thinkers decided that a company’s main and perhaps only responsibility was to the shareholders. Prior to that, there was a more nuanced view of stakeholders which included shareholders but also included employees, customers, and the community at large. Perhaps this begins to rebalance that trend.

     

     

     

     

     

     

     

     

    Published: 2 months ago


    February 26, 2019

    Salesforce will be celebrating its 20th birthday on March 8. Where did those decades go? “Time flies like an arrow,” said Groucho, “fruit flies like a banana.”

    There it is.

    Last week a respectable chunk of the analyst community that follows the company converged in San Francisco inside its cavernous new headquarters to hear about its plans for the year ahead. I’ll get to some of the non-NDA ideas floating around the sessions momentarily but first, some impressions of the first (or last?) 20 years.

    In many ways, Salesforce has executed a typical and nearly flawless grass roots maneuver of the kind explained by gurus like Geoffrey Moore and Clay Christenson. They entered the market late, after Siebel was already a billion-dollar company but their entry was not of an also ran. From the beginning Salesforce positioned itself as fundamentally different because it was what would become known as a Software as a Service, or SaaS, company.

    Competing with an established player can be hard. Initially, the Salesforce app comprised just four tabs while Siebel had so many that Marc Benioff said they were so numerous they were useless. That’s nothing you’d hear from Salesforce today with its numerous clouds. Salesforce was selling something that every company wanted at that point and it had little to do with the merits of its CRM–quick delivery and low costs.

    You see, Salesforce arrived at the start of the century just as the smoke was clearing from the traumatic change of financial systems to accommodate four-digit date formats. Conventional CRM in those days was largely a custom programming market and implementation cost metrics often stipulated that the total cost of ownership in CRM would be 3-4 times the software costs. They weren’t wrong and there was a kind of fatalism, at least among large companies, that that was the way things would be.

    But you can’t grow a market or a category like that. If prices had not come down, CRM would have become a not very good major corporation play thing. Prices had to come down and functionality had to expand in order to get CRM into the hands of medium size companies and even those smaller. SaaS, with its very low cost of ownership fit the need precisely.

    Salesforce changed that equation and in so doing gave itself and multiple other dot-com companies running room. Still it was amazing to me even then that the CEO’s of most of the other CRM competitors offering SaaS services failed to understand the importance of what they had. Most simply regarded SaaS as another delivery mechanism rather than the revolutionary commoditization of IT that the industry badly needed.

    IT in the earliest decade of the century was ripe for commoditization. It was traditional and highly manual. There were no smartphones or social media then and analytics was a failed idea from the 1990s in need of greater CPU horsepower and data storage before it could take on its natural role. Much of this comes together in one observation. If you wanted to brief me, or any analyst, about your company, products, and strategies in the hope that I’d write about you, it was necessary to fly to Boston to do that in person. There were no products like WebEx yet. It was a long time ago if you’re basing your analysis on such things.

    So, into that milieu Salesforce launched in 2000 after a year of software development led by co-founder Parker Harris but what’s interesting is that the company hasn’t changed that much in the intervening decades. Instead the industry has continued to play catch-up over numerous product cycles that have included basic SaaS, social media, mobility, platforms, customer journeys, analytics, and machine learning.

    Corporate social responsibility

    Always lurking in the background has been the company’s famous 1:1:1 approach to corporate social responsibility. It still donates one percent of its people’s time, its equity and product to charity and most interestingly more than 2000 companies have taken the hint and developed similar programs. They aren’t all small companies either. Google instituted such a program before its IPO and on the day it went public automatically spun up a large charity.

    Lately Salesforce has described the four pillars of its business as trust, customer success, innovation, and equality which neatly ties together its attitudes about customers, employees, the community, and its responsibility to deliver innovative products, which brings us full circle to last week.

    Commoditization of IT hasn’t ended. Salesforce might have taken advantage of a nascent trend at its inception, but the need was already pronounced. Understanding that trend in relation to the IT industry is important in part because it seems like cloud computing is now the thing that’s commoditizing.

    Closing the frontier

    My observation today is that not only Salesforce but most of the industry is built out. That’s far from saying there’s nothing left to do though. It’s more like closing the American frontier in 1890–there’s no more frontier but there’s still plenty to be done internally. In Salesforce’s case, as well as much of IT, we’ve entered an era of efficiency and effectiveness meaning that we’ve now produced various automations and our focus now is optimizing them.

    Fair enough. But this also means that the importance of product announcements and making release dates begins to recede into the background. What takes prominence are the services needed to help customers to be successful and we’ve seen Marc Benioff harping on this aspect repeatedly. So rather than big news items, we’ll be on the lookout for more individual customer accomplishments.

    For example, for several years already, Salesforce has been edging toward the position of change agent and corporate culture transformation maven and you see it in the discussion of digital disruption. No one buys digital disruption, there are no products labeled as such just as there are no cans of whoop-ass (a technical term) on store shelves that you can pour on an IT problem.

    If you go back to the company’s four pillars–trust, customer success, innovation, and equality–you realize that only one is about technology. The others are about how you encourage people to take the leaps necessary to achieve digital prowess, to have the courage to become data driven and to make better business decisions. It’s culture change.

    That’s what I think last week was about and I think one data point neatly encapsulates this. They told us that this fiscal year 55 percent of the sales team will be focused on industries like insurance, financial services, health care and more, and that number is trending. Working that angle, you can expect more things like My Trailhead, a learning system that can deliver knowledge about anything to a user that’s relevant to a business process.

    My two bits

    Despite its great success, Salesforce is not the CRM industry; it has revenues of $10 billion in an market that generates $80-ish billion in revenues. But, in Salesforce’s history, you can discern all of the industry’s major inflection points. Looking at CRM today you can conclude that it’s mature and that major systems are already in place. But there’s still ample room for growth and in a mature market you typically see vendors working to make their products easier to use through more service offerings such as in industry versions.

    In line with this, CRM will continue enabling users to be more effective. This enablement will become increasingly fine grained as the vendors reach into industries with detailed solutions for specific business problems.

    I think the next big milestone for CRM will be inter-vendor–inter-process communication, something beyond integration. It will take the whole industry to solve that challenge just as it took the whole industry to come up with SQL and the relational database. Based on what I saw last week, Salesforce is already working on it.

    Published: 3 months ago


    I’ve recently been writing a lot about platforms. Not any one in particular but about the importance of platform to the future of what we all do in CRM and beyond. Platform provides a level of abstraction between machines and humans who must get useful work out of them. Inventing the platform was like inventing the power loom or the printing press. It was a way to separate the creative effort from rote production. I’ve gone so far as to say that the platform-based CRM system has become a big demonstration project for the platform. If it can support this, what can’t it do?

    On a more prosaic level, one of the things that platform is proving to be very good at is providing an engagement layer on top of older and more rigid systems of record. Older systems are really good at storing data but not necessarily at telling us what the data means, its information content. We still talk too much about data, about the orange when what we crave is the juice.

    At the engagement level Salesforce has been taking big steps to add CRM values to healthcare through its Health Cloud. At the HIMSS 2019 conference in Orlando this week, one of the big health information systems conferences of the year, Salesforce unveiled new capabilities that borrow directly from CRM to support healthcare.

    In the process, they are helping to change the model of healthcare in this country from a break-fix model that’s been around for more than a century, to a wellness paradigm that seeks to prevent illness. W. Edwards Deming would be proud. New Salesforce offerings include,

    Social Determinants of Health. I’m not completely sure how this works but it looks like a way of capturing a broader data set on patients like economic status, ability to drive or access transportation, and ability to read and understand treatment instructions we all go home with these days. Those are things not typically captured in the conventional medical record but without them, it will be hard to raise the bar on treatment success rates.

    Mobile-First In-Home Care Collaboration. This looks much like an application of field service management to patients and it uses Field Service Lightning for Health Cloud to do the job. As any CRM people know, successful field service is all about bringing resources to bear at a remote location. But that means much more than having a well-stocked truck or toolbox. It means being able to access others to deliver service. This collaboration product enables dispatchers to bring together specialists by ability and location to support traveling care givers.

    Personalized Patient Journeys. As you might expect, this one brings in the Salesforce Marketing Cloud to apply journey mapping and execution. Simply put, any treatment situation from recovering from surgery to managing diabetes has a predictable trajectory but individuals might not always stay on their trajectories. A wound might get infected, someone’s blood sugar might be hard to stabilize, but even those exceptions can be built into a journey map along with standardized care regimens. More likely a provider might want to keep a stream of information going to patients managing similar issues such as all Type 2 diabetes patients between 50 and 60.

    All of this brings into sharp relief the issue of containing healthcare costs. Unlike almost any other industry you can name other than education, which has a lot in common with healthcare, costs have remained stubbornly high and have continued to escalate. This shouldn’t surprise anyone. Anything that can be manufactured can eventually achieve benefits from economies of scale, but healthcare and education are not manufactured.

    Every hot appendix has to be removed by a highly skilled and trained surgeon; every diabetic needs to be diagnosed and monitored. There are few economies of scale but we can do a lot to improve prevention and when that’s not enough, we can bring systems of engagement to bear so that we waste as little resource as possible. CRM principles like systems of engagement are changing the healthcare equation by capturing more data and moving information around to inform care decisions at every level.

    My two bits

    Applying CRM to healthcare is a big deal but let’s be careful what we mean by that. The stove-piped CRM of a decade ago wouldn’t be helpful here. It’s only since the addition of social networking ideas, analytics, and machine learning that we’ve been able to see ahead of the customer and now the patient. We know where they are in a journey based on probabilities derived from thousands of past actions and we know logical next steps for the same reasons.

    Healthcare also has an important bias working in its favor—people want to be well and to get better in the vast majority of cases. You can’t say that about customers in a purchase situation because the motivators are more nebulous. You can’t even say that all students want education. It’s nice to think they do but how many do their homework regularly?

    We might have entered a golden age of CRM with all the platform additions of the last decade beginning with social networking. But it’s disappointing to see the fear and disappointment emanating from scandals about misuse of social networking and the fear of AI, and machine learning eliminating jobs. I guess that’s what you get in a maturing market. Nonetheless, there’s a lot of good being done by CRM platforms and healthcare is a good example that will have far-reaching effects.

    Published: 4 months ago


    I’ve been writing a forecast column every year at least since W was president. Nothing’s wrong with that, lots of people do. But I often find that my forecast is more of a wish list than a true prognostication so this time I’ll dispense with the fiction of analytical rigor and just say what I think needs to happen.

    Platforms and leaders

    First, the industry is consolidating. The big and successful companies are competing on a different plane than the smaller ones. The smaller guys are working harder than ever and some are realizing they need niches, that they’re not going to be able to cover the whole CRM landscape.

    This is mostly a good thing because it clarifies the mission and lowers the costs of being in the market. I can also mean better and more verticalized software. But there are two basic kinds of these companies—those that have credible platforms and those that don’t. Among those that do I’d list several including Oracle, Salesforce and Zoho.

    Oracle and Salesforce should not surprise but Zoho might. They’ve spent decades building a global solution and platform. There is only some overlap between the two with Salesforce attacking the really big enterprises and offering a huge ecosystem. But Zoho is a powerful solution for the small to mid-enterprise. It also has a good ecosystem. One of the big differentiators is how much ERP functionality you’re likely to need and where you plan to get it. Salesforce integrates well and has ERP partners like Financial Force. But Zoho offers good back office apps as a part of their service as well as having that ecosystem.

    Another vendor in the mix is NetSuite which has been setting sales records since Oracle bought and significantly invested in them. NetSuite’s idea of CRM is eCommerce though, so customers will self-select.

    So on the flip side, there are small-ish vendors still working on their own platforms and whose development teams are measured in the hundreds. The market leaders have thousands of developers in contrast, which is why it’s time for these vendors to find a niche and try to excel. With that comes a decision point about their platforms.

    Integration

    Next, we’ve had years of AI and social media, and even years of integration. I think it’s time for a year of integration on major pharmaceuticals. We need better networking and this needs to be led by the biggest names. A consortium including Microsoft, SAP and Adobe announced the Common Data Initiative (CDI) last year which I still think is not only too little, its major purpose is more aimed at slowing the advances of Oracle and Salesforce. Oracle’s autonomous database and enhanced security present a major challenge to other DB vendors. Salesforce is drafting behind the Oracle RDBMS on this one and has that advantage.

    CDI focuses on building a common CRM data model and that sounds good, but it has too many moving parts as in potentially every vendor in the industry. Smarter people have said the better approach to making everything talk is to facilitate the communication at the API level. I agree. No surprise, some of the vendors conspicuously left off the Microsoft, SAP, Adobe invitation list, are pursuing the API approach, like Salesforce, and I think 2019 will be a banner year for more API centric networking.

    We need that approach too, not just in CRM but throughout the tech world as we continue to build what will be a true information utility in the not too distant future.

    Taking social seriously

    Social media has deep roots in CRM—recall the year(s) of social CRM—and because it does, I think there’s subtle pressure in Silicon Valley for the likes of Facebook, Twitter, and all the rest, to clean up their acts and mature their business models and security plans.

    Recent reporting shows that virtually every social network has either been compromised or willingly gave access to private information to entities that shouldn’t have had it. You can’t do CRM if customers get worried about how their data is being used. CRM is an unwilling victim of social shenanigans and they don’t want to be seen as willing partners, so the pressure is on.

    Foolish social leaders will think they can wait out the federal government on regulation but that approach could backfire when the feds deliver a set of regulations that don’t work. Remember, many of the people who would pass this legislation are in their 70’s and have an archaic understanding of tech. Smart leaders will see this and volunteer to define what’s possible.

    My two bits

    I’m looking forward to 2019. I don’t think it will be a time of runaway growth and major innovation in CRM though I would be pleased to be proved wrong. In a consolidating world, there will be some losers too so be prepared.

    I think the year ahead will impress by showing unprecedented innovation, of people and companies doing some unexpected things that make a lot of sense. I’m looking for the second or third tier of companies to be more aggressive in the mergers and acquisition arena in a bid to become more competitive. After a lot of years in this seat, I’m still having fun and I appreciate you letting me share my views.

     

    Published: 4 months ago