Can Your Sales Force Trust Salesforce.com?
December 17, 2010

 

At the 2010 Dreamforce conference (Twitter #df10) in San Francisco, about 18,000 people gathered to learn about the latest in salesforce.com’s applications and technology. Attendees from sales organizations might have been looking for some depth on the next generation of applications to support their sales processes or what the vendor will do to help sales managers manage, sales reps sell products and sales operations support it all. Certainly it’s reasonable for a sales force automation (SFA) customer to expect that.

But it was not to be. Salesforce.com has moved beyond the focus of its CRM efforts to promote Chatter 2 and the advanced Chatter.com that will be freely available to its customers for use across the enterprise in 2011. As well salesforce brought forward advances in supporting databases in the cloud with database.com, in developing applications in the cloud with its acquisition of Heroku, in developing websites with siteForce.com and in building broader portfolio partnerships with BMC and VMWare.

I‘m guessing that if you are in sales and attended Dreamforce, you enjoyed the fanfare, the concert with Stevie Wonder and the fancy parties. But if you have attended in past years you probably also noticed that the conference that was dominated by sales and marketing organizations in the beginning has undergone a transformation that resembles the changes Siebel Systems made to move beyond CRM as its conference grew huge, not to mention its current role at Oracle OpenWorld. It’s an interesting comparison since those two CRM applications companies, now one, were attacked and chastised by salesforce and its outspoken CEO Marc Benioff. You might remember that at Siebel’s conferences salesforce.com people used to march back and forth and hassle attendees with its No Software marketing campaigns.

You might ask why salesforce.com has moved beyond the CRM focus and only makes incremental improvements to its SFA solution. The answer lies in two phrases: Cloud Computing and Revenue. First, salesforce sees itself as the dominant cloud computing platform, with a database, tools and applications, equivalent to IBM, Microsoft, Oracle and SAP in the world of purchasing licenses and installing software on-premises. To bolster this ambition requires salesforce.com to diversify and support a broader enterprise software strategy. Yes, I said “software” – it’s clear now that the No Software company rents software whatever its marketing says. Second, there’s a revenue opportunity in taking on a larger enterprise software strategy – it provides access to organizations capable of larger IT spending and direct competition with the likes of HP, IBM, Infor, Microsoft, Oracle and SAP. In this scenario the incremental spend of most sales organizations pales in comparison. In addition salesforce markets and sells its SFA to meet the needs of the entire sales force but in fact it does not. Though it has dozens of partners with applications for sales, it rarely does more than mention the catalog on AppExchange rather than provide a blueprint or framework to help potential customers understand the options available.

So if you are expecting more from salesforce.com for your sales force, I suggest you lower your expectations and reconsider what you need to reach the next level of efficiency in sales processes for managers and representatives. We call this sales performance management, and it addresses all the tasks and processes across a sales organization. If you want to do this, you’ll need to examine the full range of sales activities that our research has identified and advances in both pre- and post-sales activities. These include the pipeline, forecasting, coaching, playbooks, pricing, compensation, incentives, rewards, territories and quotas. In addition you’ll need sales analytics that address the demands of sales operations for interactive analysis, modeling and planning and of sales managers to understand, monitor and improve sales effectiveness. With a comprehensive approach you’ll find that applications designed for sales can draw more value from the silos of spreadsheets, reports and presentations that currently dominate sales processes. As for analytics, my colleague has assessed those from salesforce.com and finds plenty of room for improvement (See: “Salesforce Analytics Identify a Break in the Clouds“).

Now I do think that the advances in collaboration with Chatter can help sales, and you can do the basics in its dashboards. In addition it is good the company is advancing its functionality on mobile technologies like smartphones and tablets like Apple iPad. But these can’t deliver the kind of innovation and improvement you will need to manage and operate sales more effectively. You deserve better, but you will have to seek it elsewhere.
If I had a voice at salesforce, I would argue to put more resources into the Sales Cloud and to promote its partners more articulately than it does today. I would also ensure that the education at the conference is relevant and deeper for the sales organization. I’d say next year's Dreamforce should have a complete Sales Cloud area on the exhibit floor, including partners, so that collaboration can occur more easily in sales organizations. The most recent exhibit floor was a maze that forced customers to go on a Mission Impossible to find what they wanted. Finally I wonder whether salesforce is worried about doing what its predecessors in SFA did in limiting innovation – which gave it the opportunity it needed in starting out.

Salesforce.com eventually will encounter new competitive pressures to advance SFA further. Oracle’s Fusion CRM for sales has addressed many of the challenges in functionality found in Oracle Siebel, Oracle CRM and Oracle CRM On-Demand, as I reviewed recently. Its focus on planning, prospecting and productivity with strong sales analytics technology foundation that integrates predictive analytics might give it an opportunity to fend off salesforce’s approach to its customers. Others in SFA such as CDC, Infor and SAP (See: “SAP Energizes CRM with Analytics and Interactions, But Will It Work?“) have not progressed significantly. At the same time new sales application suite companies have been advancing: Callidus, Merced Systems, Synygy, Varicent and Xactly are beginning to address the need for more pre-sales functionality. In addition other partners who were at Dreamforce include Cloud9 Analytics for forecasting and pipeline management, Sant/Kadient for sales playbooks, Terralign for territory management, Camelon for quoting and pricing, iWay CEP Enable for getting customer notifications from within the enterprise (which I assessed) in Salesforce Chatter, and Jitterbit for gaining dynamic access to related information in the enterprise. All these dedicated solutions integrate to the salesforce.com platform.

There is some indication that salesforce might decide to make acquisitions, but so far there is no hint of which companies and will it have direct value for sales organizations. And maybe it is time for the company to change its name to represent the new broader focus and the wall street ticker symbol (NASDAQ:CRM) that they are publicly traded under. This transition from a focus on helping sales is nothing new as I first identified this in my analysis in 2007, so this is a more vocal warning for those of you who care about advancing sales organizations effectiveness and efficiency. For the time being, I recommend developing your agenda for sales applications and broadening your horizons beyond salesforce.com to get what you need and not just what you will get from them.

Let me know your thoughtsor come and collaborate with me on Facebook,LinkedInand Twitter. 

Regards,

Mark Smith – CEO & EVP Research


 

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