Salesforce.com is celebrating 15 years in the CRM market. During that time, it has remade an industry and changed...
the expectations of businesses and consumers about what software can do. It was far from easy, though.
Salesforce entered a CRM market dominated by established software houses with lots of marketing cash, but it made enterprise software hip and sexy in unprecedented ways. In the process, it established its own dominant position. But can it continue this run or is it likely to revert to the mean, as many companies do after they reach dominance?
Here is a short list of the company's innovations and accomplishments and a forecast for what's next.
It wasn't the first company to offer its products as a service, but Salesforce has been a tireless promoter of the subscription model. Literally thousands of other companies -- not just in technology -- have adopted subscriptions and changed the business climate as a result. Today, even companies that don't offer subscriptions have to deal with customers that understand the model and demand similar responsiveness and service.
It's been called a lot of things -- hosted, on-demand, SaaS and now, cloud computing. Whatever, it represents using the Internet as a ubiquitous provider of storage and compute power, and it is part of the mobile revolution. Before Salesforce, using the Internet this way was expensive because you needed a data center and a virtual private network, or VPN, and had to absorb the costs associated with them. It was also scary to think about where your data lived and whether someone else could access it. Most of those fears have subsided, and the cloud is one of the fastest areas of the technology market today.
Today, even companies that don't offer subscriptions have to deal with customers that understand the model.
Early on, Salesforce saw the potential of social media when embedded in business applications, and it rebuilt itself as a social company. It embedded not only social tools in its products, but also features like workflow to enable automated business processes that could respond at the speed of the social world.
The company has long championed incorporating mobile devices into its business processes, and as the networks and devices have gained power and sophistication, it has kept up. Today it offers development and deployment technologies that enable its apps to run on conventional computers as well as handheld devices and tablets, and this has resulted in a business model that bases more decisions on data and that enables anywhere, anytime computing.
Salesforce Chatter was the first collaboration software from a major provider that embedded collaboration into standard business practices. This has enabled accelerated business processes and better customer service because it fosters decision making based on data and information rather than guesswork.
Recognizing the need for more intricate business systems that can handle automated workflow, collaboration, analytics and mobility to support end-to-end business processes, Salesforce opened its platform to third-party developers.
The result has been a huge amount of innovation around the core application set and the deployment of hundreds of specialized applications that plug and play. This has completely transformed the idea of integration that the industry was saddled with at the turn of the century.
For more on SaaS and the CRM market:
CRM, ERP head up mobile applications offered by SaaS
On-premises vs. SaaS: Making the choice
Why cloud-based CRM systems make sense
A community of vendors whose products and services revolve around Salesforce the ecosystem provides solutions that enhance core CRM while delivering specialized applications and new value to well over 100,000 companies that use Salesforce.
The cost curve
When Salesforce started, companies could easily spend two to three times the cost of a software license for customization and integration, and licenses were typically in the million-dollar range. The Salesforce business model reduced costs for all of these things and no longer required an up-front investment. Instead, periodic payments became the norm, and many more businesses found they could afford to use the same software that their larger competitors could access.
Salesforce is not without competition, and it is in a race with a group of vendors that rapidly improvise on the company's innovations. The industry has always been about data-driven transactional applications, but the future CRM market looks as if it will require more process-driven business models. Salesforce's innovations to date all support a shift from data-oriented transactional systems to those that deal with customers on a long-term basis through excellence in applying best-practice business processes. It would make sense for the company to concentrate its efforts in this new area if it expects to maintain its lead in rankings like the Gartner Magic Quadrant.