Salesforce’s success stride

Executive summary:-

The article is an attempt to shed light on the impressive rise and current success of Salesforce in CRM industry. My motive here is to discover and share probable reasons of its triumphant march in recent time.

Current situation

The current ERP space is experiencing a technical shift towards cloud space reasons being reduced cost and operations ownership. The On premise ERP industry was almost saturated until cloud platform made inroads into it.

Companies who are first to enter in this race have a head start now and Fortune 500 companies in US/UK are no exception.

Software industry shift:-

The current shift is moving from Software as a service (SaaS) and also Platform as a service (PaaS) offerings from traditional On-premise( Software deployed at customer’s site and hardware) offerings.

Technology shift

All modules of the ERP are affected by this technical snow storm and whichever organization is slow to respond will be affected and will not sustain profitable business operations using On premise model for long.

CRM ERP space is no exception. It has seen many impressive players in the past but one company that outshined its rivals and gained sustained progress in this space is Salesforce. True to its name it has become force to reckon with and challenged the incumbents in the same space and managed to gain steady growth.

The figures below show the shift in market from 2006 to 2016 in the CRM space towards Salesforce.

 Above graphs shows that the company’s charisma is synonymous with its name- “force”.

History

A company’s way of thinking is rooted in its country of origin for a number of reasons and Salesforce/ /Oracle/SAP are no exception. SAP works on traditional German approach delivering robust and complex technical products that is not much of an eye candy; it stresses more on functionality rather than appearance and ease of use which has become a key success factor in today’s world.

Oracle’s strategy is simply acquiring best of breed products to augment its suite of ERP since long.

Salesforce is staying competitive in the dynamic market by an array of factors described below.

Deep dive into Salesforce’s success factors

1.      Focus on Core competence -Salesforce simple strategy is to collaborate with the best in industry and keep focus only on CRM space. This CRM only focus is what differentiates it to perform better in terms of product features. This coincides with the core competence view of management wherein the key CRM focus lets the company deliver a better overall product than its competitors. Toyota for Quality and Volvo for safety would be a similar example.

2.      Synergy - Partnering with other parties that fill the gaps in the Salesforce product in a way that generates more value for customer is key to ensure that product remains ultra-competitive and ahead of the market. This gives Salesforce  a way to focus only on its core Strengths and leave the other aspects to the best people in the market.

Recent collaboration with google and announcement on national news channels about this shows that every opportunity to showcase strength and marketing is taken care. Sap also has collaborated with Amazon, Google and Microsoft but did not think of marketing that.

3.      Headstart– Salesforce was founded in 1999 by former Oracle executive Marc Benioff, Parker Harris, Dave Moellenhoff, and Frank Dominguez as a company specializing in software as a service (SaaS). Early movement into cloud space helped achieved Sf with a head start over others post which it has managed to widen the gap by successfully putting a wedge in that. Strategic vision needs a path to pursue, Salesforce focused on CRM and cloud and began building capabilities in that so eventually when the tide turned towards cloud space, it managed to catapult itself by showcasing its solid edge over competition.

4.      Building capability– Every organization has to tread through a path to build the competencies over time and companies that resist this will eventually lag behind. Salesforce’s journey in this regard encompassed all the partners as well. Free interactive and easy to learn technical courses helped aspiring professionals in transitioning into the SF space. Now SAP also provides free learning through Open sap but Salesforce leads in that respect. This also helps Salesforce in getting user feedback to correct its UI and technical design faster than competition.

5.      Sales readiness – Whenever anyone registers for a free trial for SF, they get the phone call next day from Salesforce team to see if there is any potential scope of sales and issues. This practice ensures an aggressive potential buyer lookout tactic. On the other side customer registers this in the back of mind as a plus point.

6.      UI Aspect- The user interface design of Salesforce is not only pleasing to the eyes, it is also designed in a way that users/ developers can use the product easily and quickly with very little demo sessions, also self-learning tools are available that guide the user step by step to use any feature in SF. Custom features can be easily configured easily in SF without using too much technical custom coding effort.

7.      Faster Change cycles – The ongoing feature adoptions take a Scrum Agile approach that ensures timely releases in short turnover times. The company also provides highly capable Sf consultants and architects to monitor the Greenfield implementations stressing more on scrum approach. This ensures coherent software adoption and change cycles throughout the customer base.

8.      Marketing – This aspect is the real deal breaker for SF. Every year during fall, Salesforce organizes the much awaited and talked about event-  Dreamforce,  where they showcase their vision, new features as well as highlight successful product adoption outcomes with various customers.

All customers and partners are invited to this gala event and encouraged to participate in the various sessions. The sessions are thoroughly engaging and go a long way in occupying a good space in customer’s mind which is the very essence of Branding.

9.       Investing in future promising Technology trends– The next wave of transformation is mostly expected in the Artificial intelligence space. All the Silicon Valley giants are investing heavily in AI. SF is making sure that Einstein is developed and promoted.

10.  Culture – Recent announcement by the company to review the pay structure of female employees to better bridge the gap in that respect, this shows a great organizational caring and rewarding culture which attracts the best talents in the Industry and again go deep in brand building.

SAP as competitor

Being a German company SAP’s products are very robust and system performance is better than others. For this reason German products demand a premium price and higher maintenance charge. However look and feel aspects have not been given much priority for long and this is one of the main reasons of losing the valuable market share.

Being an Incumbent in the ERP domain also made it slow to keep a proper focus on specific CRM space. Still it has 10% market share in the current worldwide CRM space but it is reducing steadily. Having beaten by Salesforce in terms of CRM market share, the company has now started providing open SAP sources for free and improving its Cloud and UI aspects, focusing on PAAS(Platform as a service) offerings.

Still the gap created by Salesforce is wide enough and will be difficult for SAP to regain in coming future. Since European companies are culturally more close to SAP but recently Salesforce has managed to get a strong foothold in EU market as well.

Conclusion

By the way it operates, markets itself, envisions the future and adapts itself, Salesforce generates a feeling that overall it has the right amount of sustainable competitive advantage over its competition to stay ahead for future 10 years’ time.