Salesforce held its winter Cloudforce meeting in San Francisco last week. For many the meeting seemed like a reiteration of Dreamforce and to be fair there was some overlap but each time they tell the story, the company adds new wrinkles that cause people like me to pay attention.
What caught the attention of many analysts was the emphasis on enterprise computing, the continuing roll out of the social enterprise strategy and two new products Salesforce Site.com and Salesforce Rypple. One at a time.
We really should talk about the social enterprise first because it drives the broader enterprise discussion. It appears from the rich videos presented at Cloudforce that the social enterprise envisioned by CEO Marc Benioff is alive and flourishing. We heard from Burberry’s, NBC Universal, Kimberly-Clark, HP and Toyota about how adopting social business techniques has changed their businesses by giving them greater interface with customers and the chance at greater profits.
Though the language and the videos were mostly from Dreamforce, each customer company was represented this time by its CIO who testified that the effort and company direction were real. The difference was that at Dreamforce we heard from CEOs about their social enterprise strategies.
What’s interesting is that Salesforce is not trotting out examples of companies that are much smaller than it is. Just the opposite. In every case, the customer company is equal in size to Salesforce or much bigger which only bolsters its case. Salesforce has identified a need and is delivering a different, and by the testimony of the CEOs and CIOs a better, approach to doing business. This approach appears to be becoming the social enterprise standard for the early part of this century.
At a press and analyst Q&A after his keynote, several of us asked about the pronounced emphasis Benioff’s keynote had on enterprise computing. In his on stage discussions with CIOs, Benioff had observed that these customers also use SAP or other enterprise solutions and he’d asked the CIOs about their experiences bringing SAP back office systems together with Salesforce. Those experiences were generally positive, though at least one CIO stressed that simplification was still his goal.
Benioff observed that no company of any size at all buys from a single source. “These companies like what we have in the social enterprise,” he observed. At the same time they are committed to their back office investments. “They’re telling all of us that they want us to work well together and that’s been our strategy.”
So now it appears that a new round of rapid adoption of the social enterprise has begun in some of the largest companies on the planet. If this is a typical ramp up we should expect to see a stampede in the next year, which will only make Benioff’s self-appointed job of becoming a ten billion dollar company easier to reach.
Bring on Sustainability
Back in the Clinton administration, the president, at the urging of his vice president Al Gore, invited an assortment of politicians to the White house for a conference on the environment. The Kyoto treaty was up in the air at that point (the U.S. never signed it). But there was an urgency in many quarters to attempt to get something done for the environment by reducing CO2 emissions. It shouldn’t have been controversial because the approach was along the same model as phasing out chloro- fluoro- carbons, which had caused the famous ozone hole over the Antarctic. That effort had been led by the first president Bush.
Regardless, the meeting blew up. Rather than accept the administration’s leadership, conservatives took to the opposition as if it was any other issue that they needed to oppose and the environment has been a contentious issue ever since. This has plenty to do with what comes next.
I am not a global warming denier refusnick (the double negative is intentional). I believe the preponderance of the evidence and just to keep this moving, if you are on the opposite side of the discussion, please indulge me.
It struck me during Cloudforce that regardless of the political stances, businesses are hardnosed and they do what’s best for them financially. With fuel prices again rising, the marketplace is demanding less expensive and therefore less carbon-intensive approaches to executing their business processes and vendors are beginning to respond. That translate to travel avoidance through the use of surrogate technologies like embedded video and bi-directional communication and that’s what the Salesforce demos offered.
At the Q&A, Benioff reiterated the importance of being able to address customers through a multi-channel approach, to meet them where they are. There was no crusading involved, just the solid business logic of satisfying customer demand and leveraging all technological possibilities to do it affordably. That’s when it became clear for me that this is how the free market handles challenges like the environment. Regardless of what the pols on either side think or do, sustainability is now crossing the chasm and becoming a business imperative. It’s subtle but it’s happening.
The new news form Cloudforce was not highlighted that much but it is important in its own right. The company announced availability of Salesforce Site.com and Salesforce Rypple. I’ve written about Salesforce Rypple, the socialized employee management tool elsewhere.
Salesforce Site.com is also interesting. The next iteration of its Sites solution, this product is a cloud-based content management system (CMS) that is part of the platform and capable of helping organizations to quickly develop social websites.
As a user of an earlier generation of CMS I can attest to how powerful it can be to define a page and let the software figure out how to fill it with content at run time. Moreover with the social platform as an integral component I expect that the websites that Sites.com generates will enable a more engaging level of interaction with customers. It’s also possible that with Heroku as another part of the family that what defines a website is about to be expanded significantly.
Finally, Cloudforce also filled a necessary spot in the ongoing marketing conversation. Microsoft Convergence is happening this week and other vendors including SAP and Oracle will be having events in this quarter so it was important for Salesforce to raise its profile. OF all the things you can say about Salesforce, you should always be mindful that this is a very good marketing organization.
Marc Benioff, CEO of Salesforce.com, has often said that tactics drive strategy at his company. That’s the opposite of what we think of regarding how decisions should be made especially in big companies. The image is often of high-level decisions being refined into finer grained activities until you have tactics. Much of this is encoded in the acronym GOSPA, which stands for goals, objectives, strategies, plans and actions.
So what’s going on when a high growth company like Salesforce decides to work backwards? Some might say that whatever it is should be continued because it works and while that seems like an easy answer, it is quintessentially pragmatic and there is much to say in favor of pragmatism especially when it is diametrically opposed to dogma. Nonetheless a little analysis wouldn’t hurt here.
This is all brought into high relief by last week’s announcement that Salesforce would buy a small human capital management (HCM) company, Rypple, and that Salesforce would next field a cluster of applications around HCM or HR which it named Successforce.
Critics immediately started by stating the obvious, that a single shot HCM application based on Facebook was not the rock on which to build a magnificent cloud based human capital application set. They were right, too, but the situation was like a very good hockey ref trying to officiate a baseball game. They missed the point by calling high sticking on the man in the batter’s box.
All of the major enterprise software vendors have at least one human capital or human resources offering. SAP just bought SuccessFactors for $3.4 billion, Oracle has PeopleSoft solutions and Workday, headed by PeopleSoft’s founder, Dave Duffield, is also in the game. The market is estimated at $6 billion annually, which represents a nice revenue stream for all vendors.
As the preeminent social software vendor, Salesforce bought Rypple, a social HCM solution and announced Successforce, at least in part as a means of showing that it intends to be a player in every niche that conventional software companies play in. Salesforce could do no less because it has to show that all application areas both conventional and some not invented yet are addressable by a cloud and social solution. This is a good and probably necessary strategy and though it may have been percolating along for some time, the tactical announcement may have been dictated by recent activity. The announcement also takes some of the spotlight off of the SAP-SuccessFactors activity.
Starting with a social aspect of HCM makes a fair amount of sense because in one stroke it says Salesforce is in the market and no one need ask if Successforce will leverage social media to support business just as the other Clouds do. Of course, the pressure is now on Salesforce to deliver broad HCM functionality, which may entail additional acquisitions or a rapid development process or both. I have no idea what the company’s tactics will be but I am sure they will reflect some pragmatic thought on their part.