Salesforce dominated the worldwide CRM market with a 19.5% market share in 2018, over double its nearest rival, SAP, at 8.3% share.
Worldwide spending on customer experience and relationship management (CRM) software grew 15.6% to reach $48.2B in 2018.
72.9% of CRM spending was on software as a service (SaaS) in 2018, which is expected to grow to 75% of total CRM software spending in 2019.
Worldwide enterprise application software revenue totaled more than $193.6B in 2018, a 12.5% increase from 2017 revenue of $172.1B. CRM made up nearly 25% of the entire enterprise software revenue market.
With 19.5% market share, Salesforce has over 2X the CRM sales SAP has and over 3X of Oracle. Salesforce continues to dominate CRM globally, increasing its market share from 18.3% in 2017 to 19.5% in 2018. Adobe is the only other vendor to grow its market share in 2018. Microsoft and SAP successfully held onto to market share while Oracle lost share.
Adobe and Salesforce grew faster than the overall market, increasing CRM revenues 21.7% and 23.2% respectively. Adobe’s CRM sales jumped from $2B in 2017 to $2.4B in 2018. Salesforce CRM revenues increased from $7.6B in 2017 to $9.4B in 2018, growing the fastest of all competitors in this market. SAP grew 15.5% between 2017 and 2018, just below the overall market growth of 15.6%. Microsoft (15%) and Oracle (7.1%) grew slower than the market. The following graphic compares growth rates between 2017 and 2018.
Adobe dominates the marketing subsegment of CRM with 19% market share in 2018. Salesforce has 11.7% of the marketing subsegment, followed by IBM (5.7%), SAP (4%), Oracle (3.6%) and HubSpot (3.4%). Gartner estimates the marketing subsegment was a $12.2B market in 2018, increasing from $10.3B in 2017, achieving 18.8% growth in just a year.
Eastern and Western Europe were the fastest growing regions at 19.7% and 17.5% respectively. North America and Western Europe were the largest two regions with North America growing at 15.2% to reach $28.1B in revenue.
In working with manufacturers and financial services firms over the last year, one point is becoming very clear: SaaS is gaining trust as a solid alternative for global deployments across the enterprise. And this trend has been accelerating in the last six months. One case in point is a 4,000 seat SaaS CRM deployment going live in Australia, Europe, and the U.S. by December of this year.
What’s noteworthy about this shift is that just eighteen months ago an Australian-based manufacturer was only considering SaaS for on-premises enhancement of their CRM system. What changed? The European and U.S. distribution and sales offices were on nearly 40 different CRM, quoting, proposal and pricing systems. It was nearly impossible to track global opportunities.
Meanwhile business was booming in Australia and there were up-sell and cross-sell opportunities being missed in the U.S. and European-based headquarters of their prospects. The manufacturer chose to move to a global SaaS CRM solution quickly. Uniting all three divisions with a global sales strategy forced the consolidation of 40 different quoting, pricing and CRM systems in the U.S. alone. What they lost in complexity they are looking to pick up in global customer sales.
Measuring Where SaaS Is Cannibalizing On-Premise Enterprise Applications
Additional take-aways from this report include the following:
Perceived lower Total Cost of Ownership (TCO) continues to be the dominant reason enterprises are considering SaaS adoption, with 50% of respondents in 2012 mentioning this as the primary factor in their decision.
CRM is leading all other enterprise application areas in net new deployments according to the Gartner study, with the majority of on-premise replacements being in North America and Europe.
Gartner projects that by 2016 more than 50% of CRM software revenue will be delivered by SaaS. As of 2011, 35% of CRM software was delivered on the SaaS platform. Gartner expects to see SaaS-based CRM grow at three time the rate of on-premise applications.
95% of Web analytics functions are delivered via the SaaS model whereas only 40% of sales use cloud today according to the findings of this study.
The highest adoption rates of SaaS-based applications include sales, customer service, social CRM and marketing automation.
SaaS-based ERP will continued to be a small percentage of the total market, attaining 10% cannibalization by 2012. Forrester has consistently said this is 13%, growing to 16% by 2015.
Office suites and digital content creation (DCC) will attain compound annual growth rates (CAGR) of 40.7% and a 32.2% respectively from 2011 through 2016. Gartner is making the assumption consumers and small businesses will continue be the major forces for Web-based office suites through 2013.
The four reasons why companies don’t choose SaaS include uncertainty if it is the right deployment option (36%), satisfaction with existing on-premise applications (30%), no further requirements (33%) and locked into their current solution with expensive contractual requirements (14%).
Bottom Line: Enterprises and their need to compete with greater accuracy and speed are driving the cannibalization of on-premise applications faster than many anticipated; enterprise software vendors need to step up and get in front of this if they are going to retain their greatest sources of revenue.
Sales VPs for years have been test-driving SaaS-based CRM systems, piloting them with sales teams to see if using them leads to higher sales and greater customer retention. Marketing VPs and Chief Marketing Officers (CMOs) also continue to pilot SaaS-based web analytics and marketing automation applications.
What’s been missing from these pilots is the ability to bring CRM, marketing automation, sales management and web analytics systems into existing enterprise IT architectures just as fast. This is changing quickly. CRM vendors have been quick to respond to the challenge, offering Application Programmer Interfaces (APIs), integration adapters, connectors and from larger vendors, integrated bus architectures.
What the Hype Cycle for CRM Sales, 2012 Means
CRM’s real value is in unifying an entire enterprise based on its ability to sell, serve and retain customers better than before. Gartner shows this is a high priority for its CRM clients by underscoring which technology and application areas of the hype cycle are responding to his market dynamic, and which aren’t.
This Hype Cycle also reflects the urgency I hear from Sales VPs who want to get in control of the complex compensation, quota, territory management, job appraisal and sales coaching responsibilities they have. While each of these areas is essential, many companies, even those in enterprise software, have ignored these areas, allowing them to stay manually based. Gartner calls this area Sales Performance Management (SPM) and shows it has the highest benefit of all SaaS-based sales management applications in the next two years. Gartner’s analysis captures the time shortage that Sales VPs I know are facing; they have to get to high quota levels while also managing a diverse set of leadership responsibilities as well. The Hype Cycle for CRM Sales, 2012 (G00234919) is shown below:
Gartner estimates 35% of all CRM implementations today use SaaS, growing to over 50% by 2020 according to their projections. In 2011, more than $5 billion was invested in sales applications.
Cloud adoption varies significantly across CRM software categories with Web analytics achieving 95% adoption, Sales Force Automation achieving just over 50%, and Configure Price Quote (CPQ) achieving 40%. Cloud-based Sales Performance Management has the highest compound annual growth rate (CAGR) of any CRM category according to inquiry and client calls.
Sales, Customer Service, Social CRM and Marketing are the four fastest-growing areas of enterprise Sales applications on SaaS. Campaign Management is increasingly quickly, up from 19% using SaaS in 2010 to 29% in 2011.
Gartner sees significant growth in Configure Price Quote (CPQ), projecting a market of $300M in 2012, up from $240M in 2011. Gartner is due out with a MarketScope on CPQ shortly, where the 15 major vendors it tracks in this area will be ranked. 40% of existing implementations are on SaaS, and that proportion is increasing relative to licensed versions. Of the 15 vendors in this market, 12 have announced SaaS-based versions of their applications.
There are 3.8M Sales Force Automation SaaS users globally today.
By 2017, 25% of companies adopting CRM will have extended their customer service contact centers to include social media including Facebook, Twitter and other emerging online communities. As of 2012, Gartner is seeing only 1% of companies integrate social media into their companies’ departments and workflows to ensure a consistent customer experience.
Price Optimization will experience transformational growth in two to five years. Gartner sees this area as one of the most promising across all CRM Sales as can be seen in the Priority Matrix for CRM Sales 2012 below from the Hype Cycle for CRM Sales, 2012. The research firm has defined this market as including price analysis, price optimization and price execution. Gartner estimates this market was $180M to $190M in 2010. Vendor competing in this market include Accenture, Deloitte, Pros, Vendavo, Vistaar Technologies and Zilliant.
Social CRM (SCRM) for Sales is at the Peak of Inflated Expectations, with 90% of spending for these applications being generated from B2C companies. Gartner expects B2B companies to lead the growth of these applications through 2015, increasing spending from 5% of total SCRM sales in 2011 to 30% by 2015.
SaaS-based CRM sales within enterprises are expected to reach $4.48B in 2012, growing to $6.3B in 2015. The following table from the report Forecast: Software as a Service, Worldwide 2010-2015, 2H11 Update provides a frame of reference for SaaS-based CRM growth overall.
Salesforce leads all CRM vendors in market share growth, advancing 2.8% from 2010 to 2011 according to Gartner’s’ global market share analysis shown below. Salesforce attained 26.9% revenue growth from 2010 to 2011 ($1.3B to $1.6B) and 36.7% growth from 2011 to 2012 ($1.6B to $2.27B). The future momentum of Salesforce is in unifying the enterprise, redefining corporate IT in the context of the customer. Their recent acquisitions show analytics, marketing automation and development platforms are key priorities. The following table is from the report Market Share Snapshot: CRM Software, 2011 (G00233998).
Bottom line: Making CRM strategies successful has to start with a common vision and urgency for results. Both are happening quicker in CRM than ever before, driven by a much clearer understanding of what enterprises need and an impatience for results.
The economics of public cloud computing are accelerating the pace of change occurring in enterprise software today.
Many of the scenarios that Clayton Christensen insightfully describes in The Innovator’s Dilemma are playing out right now in many sectors of this industry, shifting the balance of purchasing power to line-of-business leaders away from IT. True to the cases shown in the book, new entrants are bringing disruptive innovations that are being successfully used to attack the most price-sensitive areas of the market. Winning customers at the low-end and making their way up-market, new entrants are changing the customer experience, economics and structure of the industry. Salesforce.com is a prime example of how the insights shared in The Innovator’s Dilemma are alive and well in the CRM market for example. This is an excellent book to add to your summer reading list.
Defining The Public Cloud
The National Institute of Standards and Technology (NIST) have defined the public cloud in their latest definition of cloud computing in their September, 2011 brief you can download here (The NIST Definition of Cloud Computing). The NIST defines public cloud as “the cloud infrastructure is provisioned for open use by the general public. It may be owned, managed, and operated by a business, academic, or government organization, or some combination of them. It exists on the premises of the cloud provider.” In addition the NIST defines three models including Software as a Service (SaaS), Platform as a Service (PaaS), and Infrastructure as a Service (IaaS). Gartner’s definition of public cloud computing is comparable yet includes Business Process as a Service (BPaaS) and Cloud Management and Security.
A quick check of the term public cloud on Google Insights shows the rapid ascent of interest in this area. A graphic from Google Insights is shown below:
Public Cloud Adoption in the Enterprise
In the many conversations I’ve had with CIOs and CEOs of manufacturing companies the role of cloud computing comes up often. There’s a very clear difference in the thinking of CIOs who see their jobs as selectively applying technologies to strategic needs versus those who are focused on compliance and risk aversion. The former see their enterprises moving to public and hybrid clouds quickly to better integrate with dealers, distributors and suppliers at a strategic level.
The public cloud’s pervasiveness in the enterprise is growing rapidly. This market dynamic is reflected in the report, Forecast: Public Cloud Services, Worldwide, 2010-2016, 2Q12 Update (ID:G00234814). Gartner breaks out forecasts into the areas of Cloud Business Process Services/Business Process as a Service (BPaaS), Application Services/Software as a Service (SaaS), Application Infrastructure Services/Platform as a Service (PaaS), System Infrastructure Services/Infrastructure as a Service (IaaS) and Cloud Management and Security Services. Highlights from the report are presented in the following five areas:
Cloud Business Process Services/Business Process as a Service (BPaaS)
Gartner is predicting that BPaaS will grow from $84.1B in 2012 to $144.7B in 2016, generating a global compound annual growth rate of 15%.
Of the eight subsegments Gartner is tracking in their BPaaS forecast, Cloud Payments (17.8%) Cloud Advertising (17.1%) and Industry Operations (15.1%) are expected to have the greatest compound annual growth rates (CAGR) in revenues generated by 2016.
In terms of revenue generated, Cloud Advertising is projected to grow from $43.1B in 2011 to $95B in 2016, generating 17.1% CAGR in revenue growth through 2016.
Cloud Payments are forecast to grow from $4.7B in 2011 to $10.6B in 2016, generating a CAGR of 17.8% worldwide.
E-Commerce Enablement using BPaaS-based platforms is expected to grow from $4.7B in 2011 to $9B in 2016, generating a 13.6% CAGR in revenue globally.
Application Services/Software as a Service (SaaS)
SaaS-based applications are expected to grow from $11.8B in 2012 to $26.5B in 2016, generating a CAGR of 17.4% globally. Gartner tracks ten different categories of SaaS applications in this latest forecast with CRM, ERP, and Web Conferencing, Teaming Platforms, and Social Software Suites being the three largest in terms of global revenue growth.
The three fastest-growing SaaS areas include Office Suites (40.7%), Digital Content Creation (32.2%) and Business Intelligence applications (27.1%) having the highest CAGRs from 2011 through 2016.
SaaS-based CRM will see the largest global revenue growth of all categories, increasing from $3.9B in 2011 to $7.9B in 2016, achieving a 15.1% CAGR worldwide.
Web Conferencing, Teaming Platforms, and Social Software Suites will grow from $2B in 2011 to $3.4B in 2016, generating an 11.2% CAGR. Gartner is including Enterprise 2.0 applications in this category.
SaaS-based ERP is forecasted to grow from $1.9B in 2011 to $4.3B in 2016, achieving a 17.3% CAGR.
Supply Chain Management (SCM) is an area that Forrester, Gartner, IDC and others have predicted significant growth in. Gartner’s latest forecast for SaaS-based SCM is $1.2B spent in 2011 growing to $3.3B in 2016, representing a 21.1% CAGR.
Application Infrastructure Services/Platform as a Service (PaaS)
Gartner forecasts the worldwide enterprise market for PaaS platforms will grow from $900M spent in 2011 to $2.9B in 2016, representing a 26.6% CAGR.
Growth rates by PaaS subsegment include the following: Application Development (22%), Database Management Systems (48.5%), Business Intelligence Platform (38.9%) and Application Infrastructure and Middleware (26.5%).
Application Infrastructure and Middleware is expected to be the largest revenue source in PaaS for the next four years. Gartner reports this subsegment generated $649M in 2011, projected to grow to $2.1B in 2016, generating $1.5B in revenue and a 26.5% CAGR.
System Infrastructure Services/Infrastructure as a Service (IaaS)
With a projected CAGR of 41.7%, this segment is the fastest growing of the five Gartner included in their public cloud forecast. From $4.2B in revenue generated in 2011 to $24.4B in 2016, IaaS is expected to grow by just over $20B in the forecast period globally.
CAGR by IaaS segment from 2001 to 2016 include Compute (43.2%), Storage (36.6%) and Print (16%).
The Compute subsegment is expected to see the greatest revenue growth globally, growing from $3.3B in 2011 to $20.2B in 2016, generating a 43.2% CAGR.
Cloud Management and Security Services
Comprised of Security, IT Operations Management and Storage Management, Cloud Management and Security Services generated $2.3B in 2011 with a forecast of $7.9B in 2016, generating a 27.2% CAGR.
IT Operations Management (38.2%), Storage Management (30.6%) and Security (23.7%) each have relatively high CAGRs through 2016.
Bottom line: Of the five areas Gartner includes in their forecast, BPaaS and its subsegments show trending towards greater support for enterprise-wide transaction and e-commerce management. With 76% of the entire 2012 public cloud forecast being in the BPaaS segment, it is clear Gartner is seeing strong interest on the part of enterprise clients to spend in this area.
Serving the sales force is a mantra and mindset that resonates through the best companies I’ve ever worked with and for.
That priority alone can help galvanize companies who are adrift in multiple, conflicting agendas, strategies and projects. Uniting around that goal – serving sales and getting them what they need to excel – can turn around even the most downtrodden companies. And size doesn’t matter, the intensity of focus and commitment to excel do.
That’s why the latest report from Gartner’s Ed Thompson, What’s “Hot” in CRM Application 2012, published last Thursday resonates with me. He’s talking about how sales strategies need to be propelled by rapid advances in mobile technology, social CRM, sales content and collaboration, and clienteling to serve the sales force more thoroughly than ever before. His assessment of what’s hot in CRM is a great foundation for getting behind the mantra of serving the sales force and engraining it into a corporate culture while getting full value from the latest technologies.
Here are the key take-aways from the report:
Software-as-a-Service (SaaS) delivery of CRM applications represented 34% of worldwide CRM application spending in 2011. More than 50% of all Sales Force Automation (SFA) spending is on the SaaS platform. Gartner clients who are successfully running SaaS are now looking at how to get value from Platform-as-a-Service (PaaS) in the context of selling strategies.
CRM spending grew 13% in 2011, fueled analytical, operational and social CRM growth. Operational CRM represents 80% of all CRM spending and grew 10% in 2011.
Analytical CRM, in which Gartner includes predictive analytics and market segmentation analysis, grew a solid 10% in 2011 and is having a very strong year with inquiry traffic.
Social CRM grew 30% in 2011 in revenue terms and is 7% of total CRM spending globally as of 2011. 90% of Social CRM spending is originating in Business-to-Consumer (B2C) organizations with the remaining occurring in B2B.
Gartner is projecting that CRM will be one of the top three search terms on Gartner.com throughout calendar 2012 based on the trends and volume of calls they are seeing today.
CEOs see CRM as their #1 technology-enabled investment in 2012 according the query calls through April, 2012.
CRM is ascending rapidly in the priorities of CIOs in 2012, moving from 18th place to eight place in the latest Gartner analysis.
The following table of Highest CRM Application Priorities, 2012 show what’s trending within Sales, Customer Service, E-Commerce and Marketing inquiries Gartner is receiving from its clients. Consider these as leading indicators of interest. Over time these areas will need to solidify for forecasts to be completed.
Apple iPads are the great maverick buy of 2012 with thousands being purchased by Sales and Marketing management with the immediate requirement of IT integration to these devices. IT departments are scrambling on the security issues and lack of polices on BYOD. In enterprise software, iPads are proving to be highly effective as demo platforms for new SaaS-based applications. They have become the new sales bag of the 21rst century.
High Tech, Life Sciences and Insurance are the three industries with the greatest levels of iPad adoption as of April 2012. Gartner is predicting that by the end of 2012, 80% of all sales representatives in the pharmaceutical industry will be using iPads for their daily sales tasks.
Social or community customer service is the hottest area of growth for post-sales service with high-tech, media, travel, telecommunications, retail and education-based clients dominating client inquiries.
The gap is beginning to close between the value SaaS-based applications have the potential to deliver and what customers are achieving.
While SaaS-based software vendors are making major strides in integration, reliability, system performance and usability, it is the enterprise buyer’s skepticism and high standards forcing the market to move forward. The latest series of market forecasts and surveys reflect greater use of actual customer results and a quickening pace of progress.
Performance-Driven Cultures and SaaS Adoption
Measuring business outcomes using industry standard and company-specific metrics typifies companies getting the best results. A lack of clarity or confusion around strategy based goals leads to low adoption and eventual abandonment of SaaS initiates. Sales and sales operations VPs are winning the debates against home-grown or internal system development based on speed of deployment, usability and integrated analytics of SaaS applications. Based on the surveys and research completed this year, the best SaaS implementations are designed on a firm foundation of measurable results including quantifying risk.
Performance-driven cultures have a higher success rate with SaaS pilots, are more thorough in defining their own infrastructure (IaaS) and platforms (PaaS), and also know what success looks like from a metrics-driven standpoint. The graphic, Performance-Driven Culture: The Metrics Continuum, shown to the left, was originally published in Gartner’s Predicts 2011: Enterprise Architecture Shifting Focus to Business Value Outcomes Report, November, 11, 2010 Philip Allega, et.al supports this point. Please click on the graphic to expand it for easier reading.
Hype is Prolonging the Peak of Inflated Expectations
The bottom line is all really matters is measurable, repeatable performance when enterprises evaluate their SaaS strategies. Many marketing, sales, sales operations and service VPs must defend their choice of SaaS over legacy system upgrades or internal system development. Resistance to change and complacency in IT is slowly killing many companies who must step up and keep pace with their customers to survive. People are betting their jobs on this technology. Many in marketing, sales and service want to know how to improve and measure business strategy performance. That’s one of the main inflexion points in SaaS marketing today.
The reality for enterprise users is that nothing gets purchased, no matter how wonderful the claims, unless there are strong metrics that link them back to business performance. That’s what is deflating hype in this market faster than any other factor. You can download the Gartner Hype Cycle for Cloud Computing 2010 from the link (no opt-in). Please click on the graphic to download the Gartner Hype Cycle for Cloud Computing 2010.
Here are short summaries of the latest cloud computing and SaaS forecasts published recently:
Gartner is forecasting enterprise-based spending for Software-as-a-Service (SaaS) applications will grow at a 16.3% compound annual growth rate through 2015. SaaS will grow at nearly double the pace of licensed enterprise applications during the forecast period. Licensed applications will grow at a n 8.5% CAGR during the same period. The following table, Total Software Revenue Forecast for SaaS Delivery Within the Enterprise Application Software Markets, 2007-2015 (Millions of U.S. Dollars) compares enterprise software spending by application category for the forecast period. Source: http://my.gartner.com/portal/server.pt?open=512&objID=260&mode=2&PageID=3460702&id=1728009&ref=
Total Software Revenue Forecast for SaaS Delivery Within the Enterprise Application Software Markets, 2007-2015 (Millions of U.S. Dollars)
The Asia-Pacific (APAC) Software as a Service (SaaS) market is expected to grow from $390M in 2008 to $4.3B in 2015, at an estimated CAGR of 41.0% from 2008 to 2015. The appeal and reach of software as a service (SaaS) continue to grow rapidly among enterprises in Asia Pacific. Australia & New Zealand (ANZ) is the largest regional SaaS market in Asia Pacific. SAAS is gaining momentum in ANZ because of the markets resemblance to the North American market with better broadband penetration, availability of applications getting delivered in SaaS mode and overall greater adoption of IT in general. Source: http://professional.wsj.com/article/TPMTPW000020110214e72e002k2.html
Cloud middleware systems markets at $1.5B in 2010 are forecast to reach $4.3B, worldwide by 2017. Cloud computing middleware represents the base for development of all cloud computing infrastructure as it supports systems integration and systems self-provisioning. Market leaders are predicted to be Akamai, IBM, Google, Microsoft, and Oracle. Source: http://wintergreenresearch.com/
Infonetics Research forecasts the overall managed security services market, including CPE, SaaS, and cloud services, to reach just under $17B by 2015. SaaS and cloud-based security services are expected to make up close to half of the overall managed security services market opportunity by 2015 Worldwide SaaS revenue is forecast to grow dramatically over the next few years, with a compound annual growth rate (CAGR) of 23% from 2010 to 2015. Source: WSJ Journal
Cloud service adoption is up 61% from 2010 and 45% of multinational corporations (MNCs) already use cloud sourcing for at least some elements of key IT services. Cable & Wireless and Ovum partnered to create this white paper, full of excellent insights and research data: http://www.cw.com/assets/content/pdfs/resource/ovum-cloud-wp.pdf
60 percent of companies worldwide said cloud computing is a top IT priority for the next year, the sentiment is even higher in the C-suite with three in four (75 percent) C-level executives reporting cloud computing as top of mind. According to an Avanade Research and Insights’ Global Survey: Has Cloud Computing Matured? Third Annual Report, June 2011, there is also significant purchasing of cloud services without the IT department’s knowledge, with nearly 20% of all purchases never reviewed with the CIO. Source: Avanade Research Report
By 2014, cloud computing services will grow to a $45B industry a year (IDC) and SaaS to grow at 21% CAGR to touch $17.6B. Microsoft recently published the following presentation, Grow Your Business with Cloud – Are You Ready? You can download a copy of the presentation by clicking on the presentation to the right.
The global cloud computing market is expected to grow from $37.8B in 2010 to $121.1 B in 2015 at a CAGR of 26.2% from 2010 to 2015 according to Yankee Group. SaaS is the largest segment of the cloud computing services market, accounting as it did for 73% of the market’s revenues in 2010. The IaaS and PaaS markets are still at a nascent stage and currently hold a small share of the Cloud computing services market. However, these are expected to witness moderate growth due to their flexibility and cost effectiveness.Source: CSS Corp. Analysis.
Project and Portfolio Management (PPM) software emerged in 2009 as a fast-growing market for SaaS, with a compound annual growth rate (CAGR) of more than 40% projected for the next five years according to Gartner. PPM software consumption environments are changing radically, with hosted and SaaS options — as a result, most traditional on-premises vendors are forced to provide SaaS alternatives to counter new entrants and SaaS-only PPM vendors. Source: Competitive Landscape: SaaS Project and Portfolio Management Software, Worldwide, 2011 published 6 April 2011.
The bottom line is that Salesforce.com is redefining enterprise software – not just at the marketing or user level – but at the developer level as well. 2010: The Year of the Trojan Horse
At the center of this year’s DreamForce is the transformation of Salesforce.com into an enterprise platform provider, an endorser of open APIs including REST (Representational State Transfer), which the Salesforce.com development community had been asking for over a year. As the Google Trend graphic shows, the timing of a REST-based Salesforce.com API couldn’t’ have been better, it is now leading other APIs in terms of interest in trending data and adoption. Please click on the Google Trends graphic to enlarge for easier viewing.
Like the REST announcement, the timing of the Heroku acquisition last week shows how committed Salesforce.com is to creating a world-class development platform. Having Ruby on Rails as part of the development suite of applications further accelerates this strategy of dominating development platforms. The VMWare alliance does the same for Java.
There’s also urgency for getting as many developers onto Salesforce.com platforms, you can sense that in the presentations from the VPs of Development and from Marc Benioff as well. The quicker they can reach critical mass with developers on the Force.com platform the quicker they can move on to entirely new application areas. Chris Brogan would call it escape velocity and in the world of Salesforce.com, it looks a lot like a Trojan horse strategy of having as many applications in the enterprise on their platform as quickly as possible.
In the coming months, there will be more API-based announcements, more of an endorsement of open APIs. JSON APIs for example will become increasingly important in this strategy. Salesforce.com is out to win the stack war with a developer and API-driven land grab. CloudStock showed this company knows how to excel at evangelism. Time will tell if the Trojan horse strategy, now in full force, succeeds.
Note: The following is an excellent presentation on open APIs presented last week at CloudStock by John Musser. The analysis of Open API trending and analysis is worth reading, Salesforce.com must be studying these statistics given the strategy directions they are choosing.
Bottom line: Reselling cloud computing services shows much potential as a market for technology platform and application providers. The challenge is the ability to tailor the services mix efficiently and accurately enough to capitalize on scalability and selective demand of mid-tier and small business end users.
Bottom line: The following video provides a topical, informative and useful update on the cloud computing landscape; it’s worth the 30 minutes to listen to and consider how rapid the development platforms are maturing.
Bottom line: Relying on the Force.com as the development platform, Chatter will be scalable across the Salesforce.com customer base immediately. Expect to see Chatter and its development community find innovative uses of this technology in selling, marketing automation, lead generation and service.