Category Archives: CRM

Salesforce ventures into e-Commerce with $2.8bn acquisition

Salesforce 1Salesforce has taken another step towards the e-Commerce market after announcing it has signed a definitive agreement to acquire Demandware for $2.8 billion.

Demandware provides a cloud-based e-commerce platform and related services for retailers and brands worldwide, going public during 2012 after raising $88 million in its initial public offering of $16 a share. Salesforce has announced it will commence a tender offer for all outstanding shares of Demandware for $75 per share, with the deal set to complete by July 31, 2016, the end of Salesforce’s second quarter.

As with the Marketing Cloud proposition, Salesforce is seemingly happy to pay healthily above share value to break into new markets when it cannot develop the capabilities organically. The company acquired ExactTarget for $2.5 billion in 2013, this was previously Salesforce’s largest acquisition, which built the foundation of the Marketing Cloud proposition.

“Demandware is an amazing company—the global cloud leader in the multi-billion dollar digital commerce market,” said Marc Benioff, CEO at Salesforce. “With Demandware, Salesforce will be well positioned to deliver the future of commerce as part of our Customer Success Platform and create yet another billion dollar cloud.”

The idea of ‘omnichannel’ business would generally not be considered new to the industry, though this is one of the first major steps Salesforce has made in diversifying its core business offering. The company is widely recognised as a leader in the CRM space, though the Demandware acquisition offers a number of upselling opportunities for its current customer base (those who are using Marketing Cloud and its CRM offering), who may well favour having their CRM and e-Commerce platform from the same vendor.

Demandware currently works with a number of brands around the world including Design Within Reach, Lands’ End, L’Oreal and Marks & Spencer, to deliver customized experiences for customers across web, mobile, social and in the store. The acquisition is expected to increase Salesforce’s revenues by approximately $100 million to $120 million through the remainder of the financial year.

Salesforce to run some core services on AWS

Salesforce 1Salesforce has announced it will run some of its core services on AWS in various international markets, as well as continuing investments into its own data centres.

The announcement comes two weeks after the company experiences a database failure on the NA14 instance, which caused a service outage which lasted for 12 hours for a number of customers in North America.

“With today’s announcement, Salesforce will use AWS to help bring new infrastructure online more quickly and efficiently. The company will also continue to invest in its own data centres,” said Parker Harris, on the company’s blog. “Customers can expect that Salesforce will continue to deliver the same secure, trusted, reliable and available cloud computing services to customers, regardless of the underlying infrastructure.”

While Salesforce would not have appeared to have suffered any serious negative impact from the outage in recent weeks, the move could be seen as a means to rebuild trust in its robustness, leaning on AWS’ brand credibility to provide assurances. The move would also give the Salesforce team options should another outage occur within its own data centres. The geographies this announcement will apply to have not been announced at the time of writing.

Sales Cloud, Service Cloud, App Cloud, Community Cloud and Analytics Cloud (amongst others) will now be available on AWS, though the move does not mean Salesforce is moving away from their own data centres. Investment will continue as this appears to be a failsafe for the business. In fact, Heroku, Marketing Cloud Social Studio, SalesforceIQ and IoT cloud already run on AWS.

“We are excited to expand our strategic relationship with Amazon as our preferred public cloud infrastructure provider,” said Salesforce CEO Marc Benioff. “There is no public cloud infrastructure provider that is more sophisticated or has more robust enterprise capabilities for supporting the needs of our growing global customer base.”

Salesforce reveals secret recipe for digital transformation

Salesforce 1Speaking at the London edition of Salesforce’s world tour, EVP of Customer Success & Growth Simon Short outlined the case for digital transformation, and also the factors which underpin a successful transformation project itself.

Short’s view on digital transformation is there are very few companies who achieve the goal of becoming digitally orientated. This is done to three reasons. Firstly, the aggressive expansion of technology is so vast some organizations are drowning in information overload. Another is the cultural side of digital transformation, there simply aren’t enough companies embracing the necessity of cultural change. And finally, despite implementing various technologies and advanced platforms, some companies still operate in silos. Until these digital silos are connected on one overarching platform, the digital transformation journey is not complete.

The invention of chess is a good anecdote to demonstrate the progression of technology. The inventor, Ibn Khallikan, approached the Indian king with the game and his reward was to be rice, more specifically one grain for the first square on the chess board, two for the second, four for the third, and doubling there on until the end of the 64 squares. Although at first it would not appear to be a great amount, the geometric progression of the amount of rice far exceeded the king’s resources. Short believes the same theory can be applied to the growth of technology in the business world.

“If you apply the same doubling theory and Moore’s law to the growth and importance of technology, we get have way through the chess board in 2002,” said Short. “Since then we’ve seen an explosion of technology within the business world. As we continue to move forward, it’s a real challenge for those with existing technology to make the change and get ahead of the trend. No one really knows what the power of technology is and where it will go. This is the conundrum for businesses throughout the world.”

One of the main challenges here is focused around legacy technologies, businesses cannot rid themselves of the cumbersome platforms quickly enough to capitalize on the potential on emerging technologies. But at the same time, Short highlighted the companies who focus on technology implementation and do not embrace the cultural change required will not be successful in the digital transformation journey.

Salesman painting tree instead of cityAccording to Short, digital transformation is so much more than simply implementing technology. Ensuring you employees embrace the digital change, as well as connecting the individual silos (for example the eCommerce platform to the customer call centre and also the logistics/delivery team), are more important aspects of the project than the technology itself. Without the digital culture and the connected model, the customer simply sees a business which is broken even if the technology is revolutionary. “Silos and culture are the two things which can kill any transformation project,” said Short.

But what is the secret to a successful digital transformation project? And what have the successful ‘Digital Masters’ done which other companies haven’t?

For Short, the project has to be led by the CEO and has to be phased in. The various different components of the project (business change, strategy, technology implementation, employee digital engagement etc.) have to be implemented hand-in-hand. If one area progresses faster than the rest, the project will stutter. And most importantly, there has to be a governance and accountability role, an area which most companies overlook, to ensure all components of the project are heading in the same direction and progressing at the same speed. In general, there are six lessons from Short’s and Salesforce’s perspective:

  1. Change has to be led from the CEO and not delegated down. The business unit and IT cannot get into a shouting match, pointed fingers at each other, the CEO needs to take control and pull the business along with him
  2. Physical and digital experience needs to be co-ordinated. The customer experiences the brand in the physical world as well as the digital despite the growth of the internet and technology; the physical and digital experience for the customer needs to be co-ordinated to be successful
  3. Outside-in thinking. Many companies make the mistake of telling their customers about how they are changing the brand, as opposed to understanding what the customer journey is and adapting the digital experience to enhance this.
  4. Understanding it’s okay to fail. This is one of the more challenging facets according to Short, as accountable businesses don’t like to fail. But the belief every PoC will be an extraordinary success is somewhat wishful thinking. Short highlighted being okay with failure is the only way to move on and achieve success.
  5. Data driven insights. The amount of data available to businesses is unprecedented and growing faster every day. Decisions should be based on the data available which has been derived directly from the customer. It removes uncertainty (as much as possible in any case) and provides justification.
  6. A single platform to connect the business units. Without a single platform to connect all business units, digital transformation cannot be achieved, as digital transformation should focus on the connected journey. The aim should be the seamlessly interact with the customer on all their touchpoints.

Digital transformation is a key objective for the majority of businesses around the world, and rightly so. According to MIT research which Short quoted on stage, digitally transformed businesses are 26% more profitable than what would be perceived as the norm, but too many companies are focusing on the technology as opposed to the customer. Until the ideas of culture, technology and silo connections are addressed on a level playing field, digital transformation cannot be achieved.

Marc Benioff backs AI as Salesforce reports 28% growth

Marc Benioff

Salesforce CEO Marc Benioff

Salesforce reported healthy results over the course of Q1, growing 28%, as CEO Marc Benioff backed AI as the next major growth driver, during the company’s quarterly earnings call.

While social and mobile has facilitated Salesforce growth in recent years, the team are backing artificial intelligence as the next major trend to take the company through the targeted $10 billion annual revenue target. Benioff highlighted that in the same way the company is now known for being a social and mobility brand, the ambition is for Salesforce to be perceived as “an AI first company”.

“When I look at kind of the next major trend for Salesforce and our industry that will drive tremendous growth is got to be artificial intelligence,” said Benioff. “And as we look out into the future and we start to look at extreme improvement and advances in artificial intelligence whether it’s machine learning, whether it’s deep learning, whether it’s machine intelligence itself, I think that those kind of capabilities appearing inside our applications that is going to be a major growth capability going forward.”

One of the newest product launches for the company, Salesforce Inbox, uses these AI and machine intelligence opportunities to gives companies a perspective on how they can be more efficient in the sales, service, and marketing processes. SalesforceIQ is another offering which uses the same capabilities as it has an artificial intelligence front end, whereas Benioff also highlighted Sales Cloud has a machine learning front end.

While others in the industry have been very vocal about their progress within the AI field, Salesforce has seemingly been sneaking in under the radar with additional acquisitions including Tempo AI and PredictionIO. SalesforceIQ, an AI-driven calendar app which can prioritize work schedules for sales employees, was incorporated into the product portfolio following the $390 million acquisition of RelateIQ in 2014. These acquisitions, as well as organic development, are aiding the company in adapting to what Benioff described as “an AI first world”.

Salesforce’s new efforts will focus on the new, digitally enabled customers and consumers, who could be seen to driving the transformation worldwide. This new generation is defined by technology and speed, as Benioff highlighted they want services faster and easier than ever before, as well as being ever more reliant on social and mobile technologies. Companies who do not adapt themselves to this new proposition but remain in a more traditional model are those who will struggle to remain competitive.

“We’re in the midst of a massive generational shift; a new generation of customers and consumers is clearly emerging,” said Benioff. “We have been calling them here at Salesforce C generation customers. I mean this is really part of a huge shift that’s happening in computing. We’ve gone from the first generation of computing which was very much about systems of record to the second generation which was systems of engagement we talked about that on these calls many times over the last 10 years.

“And we are clearly moving into this incredible world that the system of intelligence that’s all yielding these incredible systems of customers or C generation customers that are — that our customers are connecting to. And that’s we’re so excited about.”

In terms of financials, revenues for Q1 grew to nearly $2 billion, up 28% in constant currency. Sales Cloud demonstrated 15% year-over-year growth, Service Cloud grew 32%, Marketing Cloud grew 29%, whereas Apps Cloud and other business units grew 45%. Growth in Sales Cloud was the highest recorded in the five previous quarters, which Benioff attributing to a number of new innovations including its Lightning platform, where the team have recently released an updated government edition, as well as Pardot and SteelBrick capabilities.

The team are also raising 2017 revenue guidance to $8.16 billion to $8.2 billion, and are expecting revenues of between $2.005 billion to $2.015 billion in Q2.

“I’m also thrilled to announce we’re raising full-year revenue guidance $80 million raising the guidance we feel really excited about that, $8.2 billion is the high-end of our range and our current outlook puts us on its square path, look we are going to see now that we’re going to realize very shortly our $10 billion dream,” said Benioff. “This is amazing I think that one of the reasons that we are doing so well is because Oracle and SAP are doing so poorly in the cloud”

IBM acquires Optevia to strengthen position in public sector CRM market

cloud_IBM claims the acquisition of Optevia will improve its position as a SaaS and digital consultant in the lucrative market. Optevia has a track record of working with UK Emergency Services, Central Government, Local Government and Social Enterprises, including the Ministry of Justice’s National Taxing Team’s rollout of Dynamics CRM.

“By acquiring Optevia, IBM will be able to provide Public Sector clients and prospects with a range of unique, industry focused Microsoft Dynamics CRM based solutions,” said Joanna Davinson, IBM’s European Public Sector Leader. “This strategic acquisition will help strengthen IBM as a SaaS provider and Global Software Integrator.”

In Gartner’s CRM Forecast Overview, published last summer, the global CRM market was valued in the region of $23 billion, with around 50% of the market accounted for by the top 5 services providers. SaaS continued to demonstrate strong demand, with almost 47% of the revenue attributed to the service. According to Gartner, is the market leader, with IBM claiming 4% of the CRM segment.

While IBM already has an established position in the public sector market, the company has 98 current offerings on G-Cloud, the acquisition of Optevia signals its intentions of increasing its share of the public sector CRM segment.

Alongside IBM, other players have been bolstering their position in the wider CRM market. Last year, Accenture acquired Tquila and Cloud Sherpas, both of which are Salesforce partners on G-Cloud. The acquisitions more than doubled the number of Accenture’s Salesforce consultants in the UK.

“We have seen significant growth in SaaS as more companies adopt the cloud and digital strategies to collaborate better, drive greater operational efficiencies and accelerate the development of new products and services,” said Emma McGuigan, UK and Ireland MD at Accenture Technology. “One key factor for our continued success in delivering Salesforce solutions depends on having the right skilled professionals to meet the growing demand. With Tquila on board we have the critical mass to more proactively target big opportunities both in the UK and Europe, which will extend our position in the region.”

Despite’s current market-leading position there have been a number of calls-to-arms by competitors looking to challenge the CRM giant. Alongside IBM’s announcement, Oracle has hinted at its intention to take on On Oracle’s earnings call this week, CTO Larry Ellison highlighted the company’s positioning “should make it easy for Oracle to pass and become the largest SaaS and PaaS cloud company in the world.”

Salesforce modernizes wealth management offering

Salesforce WearSalesforce has launched Financial Services Cloud, a new product suite that includes portfolio management, prospecting and data management tools.

As part of the new look product offering, Salesforce has built an ecosystem of more than 20 partners to implement the additional features into the suite. “Today’s investors don’t wait for quarterly meetings to discuss their finances with advisors; they expect to be able to engage them for advice when and how they want,” said Richard Lumb, Group Chief Executive, Financial Services at Accenture, a member of the product ecosystem.

While seen as a more traditional industry, wealth management businesses are apparently under increasing pressure to provide more detail to customers on a more consistent basis. Whereas a quarterly meeting might have been sufficient in the past, customer demands for information, speed and continuous delivery has forced the wealth management industry to evolve into the internet age and an open-all-hours model.

With clients demanding more face-time, and instantaneous insight into the performance of their investments, wealth managers are seeking digital solutions to increase productivity. Such product launches not only demonstrate the trend of modernizing more traditional industries, but also the need to provide the complete customer experience to remain competitive in the CRM space.

“Legacy advisor solutions were created decades ago to serve a product-centric world. Today, we live in a new world that is digital- and client-centric, which is turning the wealth management industry on its head,” said Simon Mulcahy, GM of Financial Services at Salesforce.

To develop the new features, Salesforce developed a number of new partnerships with niche technology providers. For example, DocuSign and eSignLive plan to add integrations that could allow advisors to send, sign and manage financial documents, and WealthEngine provide tools to facilitate wealth scoring and analytics.

“The wealth management industry is undergoing rapid change, and the ability to deliver on customer expectations for a more responsive and highly personalized digital-led experience will become an increasingly important competitive differentiator,” said Kieran Hines, Practice Leader for Financial Services Technology at Ovum. “Investing to enhance the customer experience is a top three IT priority for a significant number of private banks in 2016, with institutions in Western Europe and North America particularly focused on this area.”

PWC buys CRM and sales automation specialist Outbox

PwC is to acquire technology consultant Poland-based Outbox Group, a cloud-based CRM and sales automation specialist.

The addition of 250 employees from Outbox, a partner of Salesforce, Microsoft Dynamics, Oracle and SAP, will raise PWC’s headcount of technology specialists to almost 3,000 across EMEA. The acquisition agreement, signed on 31 December 2015, is expected to formally complete by January 31 2016.

Formed in 2005, Outbox provides consultancy over CRM, customer experience and marketing automation to 150 customers including Sky, Vodafone and Inmarsat. The Warsaw-based consultancy has now completed 250 CRM projects and has international offices in the UK, Germany, France and the Czech Republic.

The potential market for customer experience, CRM and digital is estimated at €6 billion according to PwC’s UK and EMEA Consulting Leader, Ashley Unwin. “This acquisition represents an investment in emerging markets and establishes centre of excellence for customer and digital capabilities within PwC in Europe,” said Unwin.

UK-based Outbox managing director Nicholas Mobbs will join PwC as a partner. “We are excited to join a leading consulting brand and combine business advice with user experience, marketing automation and CRM skills and services,” said Mobbs.

In other PWC news, cloud computing is contributing to a confidence crisis among enterprise chief executives, according to PWC’s global chairman Dennis Nally. Speaking at the 2016 Davos World Economic Forum, Nally said the cloud-based integrated global economy means that the world’s hot spots can instantly transmit end to end instability across the world.

Quoting the results of PwC’s 19th Annual Global CEO Survey, Nally said there were two outstanding sentiments among the survey group of 1,409 CEOs in 83 countries. The global economy and geopolitical tensions, the top two concerns, are interlinked now that technology acts as a lightning rod between hot spots, according to Nally. “We all know how integrated the global economy really is and not looking good is how I’d put it,” Nally told CNBC.

Salesforce offers $100m VC opportunity to European cloud startups

Salesforce WearSalesforce Ventures has allocated $100 million to invest in European startups as the investment arm of the cloud giant aims to capitalise on a potential $33.3 billion market. Any European cloud start up that impresses the venture capitalists could typically expect backing of between $1 million and $5 million, according to the fund’s development head.

As the investment arm of cloud-based CRM giant Salesforce it has already invested £500 million in 150 cloud and enterprise startups since 2009. However the majority of these have been US based and only 17 European cloud start up firms have been funded. However, researcher IDC predicts that the European cloud sector will grow 12 as fast as any other sector of the IT industry. As Europe catches up with the US, by 2019 its cloud market could be worth a collective $33.3 billion, it said.

As the global shift to the cloud generates demand for exciting new social, mobile and data science technologies it is creating an opportunity that should not be missed, said Salesforce EVP of corporate development John Somorjai. The European investment business will link back to Salesforce Ventures’ operations in the US run by Somorjai. London based Alex Kayyal will head the Salesforce Ventures’ efforts in Europe.

“There is so much incredible innovation happening in Europe today and we want to empower the next generation of enterprise cloud startups in the region,” said Somorjai, “Our $100 million commitment strengthens our mission to help startups grow and give back to their communities.”

However, he admitted that the competition has already started with five investments already earmarked to take a chunk of the budget.

European cloud start ups that have previously won funding from Salesforce Ventures include CartoDB, CloudSense, Cloud9 IDE, NewVoiceMedia, Qubit, Universal Avenue and YOUR SL. It’s not just about the money, according to Ruben Daniels, co-founder of Cloud9 IDE. “It’s the network and introductions, mentorship and framework that help,” said Daniels.

Salesforce Ventures’ global expertise was as important as its funding, according to CartoDB founder Javier de la Torre. “It helps us more effectively bring our data visualization tools to individual and business users around the world,” said de la Torre.

Ziggo appoints CloudSense to boost its Salesforce

Money cloudPrice quote service provider CloudSense has been anointed by Dutch cableco Ziggo to boost sales using the Cloudsense Telecoms Platform.

The CloudSense systems integrate with Salesforce’s customer relationship management service to improve the effectiveness of company sales teams. The cloud based service helps employees to configure, price and quote products and services from simple sales of broadband to more sophisticated TV bundles and subscriptions.

In a competitive selection process CloudSense promised Ziggo higher order values, fewer order errors, more automation of sales processes and quicker product launches. CloudSense created a telecoms-specific Configure Price Quote (CPQ) and customer order management, according to Dave Loerts, Director Sales SMB at Ziggo. This means Ziggo can improve both the sales cycle and the customer experience. “We were impressed that CloudSense could offer CPQ across every sales channel,” said Loerts.

One of the deciding factors in the sale was that CloudSense has created a contingency plan for working when no network is available. “Being able to configure, price, quote and contract on an iPad offline means the team are always able to sell more effectively,” said Loerts.

The CloudSense Telecoms Platform brings together the sale and provisioning of the entire range of a mobile telcos’ or communications services provider’s products and services across every sales channel. It then integrates them and provides a single view of the full transactional lifecycle natively on Salesforce. By editing and simplifying the presentation of information, and prioritising the most crucial deal making intelligence, it saves time and speeds up the sales life cycle, CloudSense claims.

Faster quotes lead to more sales, which then creates more opportunities for cross-selling and upselling, according to CloudSense CEO Richard Britton.

“Many companies today are faced with challenges when it comes to selling on-site and over the phone, and CloudSense can have a significant impact on a company’s drive to grow its market share,” said Britton.