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Let's do a Bit of Crystal Gazing! What will People Think of Salesforce in Year 2030?

Sandeep Vaid ,Vice President IT, iQor
Sandeep Vaid ,Vice President IT, iQor

Sandeep Vaid ,Vice President IT, iQor

In year 2030 will salesforce be thought of as first major cloud disruptor in application development vendors? Will it be thought of application to manage sales process (And hence “salesforce”)? Will it be seen as application development platform? All of above?

  It is very likely we will see Salesforce growing at the same trajectory it is on but to be transformative force it has to figure out how does it  technically empower the business users at a reasonable price point 

Salesforce initial growth is truly built on disruption caused by advent of cloud computing. It was perhaps the first true SaaS application which never offered any on-prem options. While other application vendors were hosting there on prem apps on cloud and claiming them to be cloud version, Salesforce stuck to cloud enabled by design and this strategy helped them grow at breakneck speed in last two decades although they were having very limited functionality (only sales cloud to begin with) compared to other competitors like Siebel et all.

Salesforce as a organization never had the baggage of on-prem apps to carry. While Microsoft, Oracle and SAP struggled to move their legacy application stack to cloud and thereby maintaining multiple version of codes and multiple version of product causing significant challenge to marketing department of these companies, Salesforce was writing the industry rules for true cloud based app - Quarterly updates, Subscription pricing model, selling functionality rather than technology thereby empowering the functional owner and boy have they succeeded so far!!!! $122 billion valuation with more than $10 Billion turnover reasonably split between service cloud (30%), sales cloud (34%), marketing cloud (15%) and platform sale (21%). These are fantastic numbers for 20 year old company with 4 major products. If we look at turnover per employee we see salesforce doing better than SAP and oracle. Two key reason for having better turnover per employee can be limited number of SKUs salesforce have had so far and also the cloud software forces customer to update regularly and hence lower maintenance effort.

But as they say “what brought you here won’t get you there!!!!”

The first mover advantage is long gone. Almost all software vendors are either cloud first strategy or only cloud strategy. To figure out where will salesforce land in next 10 years let us look at 2 dimensions – how is the computing environment evolving and what is salesforce growth strategy based on the acquisitions and platform roadmap.

The whole Application development and deployment paradigm has changed over last 2 decade. From make vs. buy paradigm, we have moved into buy and make paradigm. 10-15 years ago CIOs were struggling to figure out how do I phase my legacy applications out and bring in well architected products (Be it SAP, Oracle or any other product) thereby de-risking the business failures because of IT and also enabling the business with new capabilities and functionalities. While the CIOs have done fairly good job at derisking and bringing stability, the empowering business with new capability part has been mixed bag if not a complete fiasco. This failure has been primarily because rate at which businesses are changing is so rapid that CIOs and the product companies are left chasing the business needs rather than defining them. These business changes, caused by either merger and acquisition or organically, are not enabled by the application stack which company has. In-fact most of the times current application stack is seen as hinderance to change because the time and money required to make changes to application to enable new business capabilities is prohibitive and is deterrent to change.

Things are expected to get tougher. Today’s CIO is driven by speed of change, ability of the organization to adopt the change and of course ROI. Today software and application stack is no more an afterthought, it is embedded into service design construct. We are effectively moving into the world where every company is a software company and second most important person in the company after CEO is the CIO.

Currently 84% of fortune 500 are salesforce customers. It is absolutely logical for salesforce to start expanding the footprint in these customer’s application stack. At the same time they don’t want to end up competing with big boys like SAP, Oracle and Microsoft. Over last few years Salesforce has been pivoting to new product positioning. Instead of sales cloud, marketing cloud and service cloud, Salesforce is positioning as platform to build apps and process automation. With this positioning salesforce is getting into industry segment wherein it provides technology to build technology. This is very similar positioning as Microsoft and to some extent Oracle. This is now a big boys playground as they are competing with well established players with deep pockets.

If one looks at salesforce product roadmap, acquisitions and partnerships they definitely are making a play to win in the enterprise app market. They will continue to deepen the capabilities around area of acquiring, onboarding and servicing the customers. Those Apps is to salesforce what windows and office is to Microsoft. At the same time they will invest and grow capabilities around integration and data – both analytics and visualization where they have significant catching up to do. At present there is not too many domain led solutions in salesforce solution stacks. While there are solutions available like health cloud, financial force etc. which might offer speed and agility along with domain depth one is not sure about price point they will be available on in steady state. Another big area of concern will be price point at which ‘low code no code’ platform capabilities are offered. While other industries are adopting models from software industry to innovate faster, they don’t work on margins that software industry work on. Unless cost of development and deployment on ‘low code no code’ platform is comparable to dot net or comparable dev environments the salesforce will be seen as peripheral player by the development community. Salesforce has to decide if they want to continue to be focused on Fortune 1000 and well funded startups or really become the platform where startups and entrepreneurs build innovative apps to run their business on.

The cloud computing’s promise of low cost computing power is still an unfulfilled promise.

Salesforce has been a force for good in the IT/Business world. It not only grew massively because of early adoption of cloud and increase in computing power but it defined the industry as we know it. It is very likely we will see Salesforce growing at the same trajectory it is on but to be transformative force it has to figure out how does it technically empower the business users at a reasonable price point. In next decade we will have companies that will fulfill that promise of low cost computing. Will Salesforce be one of the company fulfilling that promise?

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