CRM Watchlist 2016: As the reviews begin, Salesforce still rules
Well, I reached that time again, where the winners get their just desserts and, in the particular group I always start with, because they are elites, a 3-star Michelin meal to precede those desserts.
Since there is no "lifetime achievement award" this year, I'm going to start with Salesforce (who finally decided a little bit ago to capitalize the "s" in Salesforce - something they didn't want to do for a long time - which, admittedly, kept them distinct - as if they needed anything more distinct than they already are). The reason for starting with them is that they are an elite winner - and the highest scoring company (again). The order in which I'm going to write the reviews will go like this:
- Highest scorer of 2016 - individual review
- Rest of the Elite winners (alphabetical order) (individual reviews)
- Winners with Distinction (group review - there were two)
- Winners - grouped according to their specific domain expertise (again, there are no category winners. You win or you don't. You aren't the top performer in customer engagement. No such thing. You won as one of the winners of the CRM Watchlist. If you are the first one who gets the review in the customer engagement group - grouped for my and readers' convenience - that's because you are alphabetically the first)
This process will probably take me months to complete so please don't ask me when your review is coming, not because I don't want to tell you, but because I don't know. I'm doing this while doing client work and writing my book on customer engagement (Harvard Business Press, 201whoknows) and am sandwiching this in between those things (and other things too numerous to mention).
Okay, them's the ground rules for this next phase folks. So let's get it on.
Salesforce: First in the CRM Watchlist scoring
Salesforce has almost habitually been the highest scorer in the CRM Watchlist only having been dethroned twice in all the years they have participated. There is a reason for that - in fact multiple reasons that make them the highest performing Watchlist company - and they don't all relate to product.
Keep in mind that the CRM Watchlist is an award that goes to a company that is impacting a market and has ALL the pieces in place to sustain that impact on the market. If you haven't done both - impacted the present and prepared for the future - you can't be a Watchlist winner
What has made Salesforce so remarkable over the years is that they have done this year over year over year. They are always in the moment (impacting the present) but never oblivious to the future. In order to succeed at this, it's not only the preparation that the company has to undertake, but also encompasses taking some well thought out risks, which can be high stakes risks.
This kind of risky "forecasting" goes back to the beginning of Salesforce history. I'll mildly digress with an anecdote that goes to the point.
I was a very early user of Salesforce in 1999 - and I HATED it. I would try to export a .txt file and it would literally export an Excel .csv file. When I needed a .csv file, it would export a .txt file. Yet, Marc Benioff was declaring that they would be the platform for the enterprise. Needless to say, I was a small business. I ultimately threw them out and used Salesnet. But what I wrote in the second edition of CRM at the Speed of Light (proving how utterly wrong and fallibly flawed I am) is this:
"Until early 2002, Salesforce.com provided small businesses with SFA applications for a small price. It did reasonably well, but with clumsy reporting tools, and notable lacks in tools such as forecasting. There are other small oddities too. For example, when you click to produce a printable version of a report, you get an Excel file. When to you click to get a report that can be imported to a spreadsheet, you get a comma delimited ASCII text file. Sadly, there are many of these small quirks that make their applications less than ideal, but they are still generally usable....
".... Then in late February 2002, they decided they were going to become an Enterprise Application and deal with the back office too, announcing Salesforce.com E-Business Suite, a limited foray into the world of ERP. That is extremely presumptuous, given that they haven't even gotten the SMB-sized sales force automation application right yet. It's worrisome when companies forget their mission and let their funding be their guide, rather than their users."
And THAT, my friends, is why I don't run companies - I only talk about them. After being that wrong about Salesforce, I'm unclear why anyone pays attention to me at all.
Why would I say that? Well, what happened just a few years later? Salesforce became a tool for the enterprise. By that time, I had been convinced by Marc Benioff (there is a good story on how that transpired that I'm willing to tell you for the mere price of a great whiskey - only 1-ounce pour is necessary. I'm a cheap date.) that Salesforce was not only not awful, but a viable candidate for a leading enterprise software provider. And that was 2003.
This story is entirely relevant to why Salesforce has become what they've become and - and why they continue to do so well on the Watchlist in particular. There are two things that drive it.
First, their uncanny focus on platform which I've talked about countless times year over year. This has been a long standing commitment of theirs and an unwavering one. When I wrote the 3rd Edition of CRM at the Speed of Light, Tien Tzuo, then the Salesforce CMO, now the CEO of Zuora and a thought leader in his own right, told me the following: "The network is the computer. That's something that you've heard of for a long time. Software is something that needs to sit inside the network, not on individual desktops. We envision a scenario where everyone goes to work, fires up browsers, looks at Yahoo, does their personal stuff, fires up their applications and it's all inside the network. We want to provide that service."
They have migrated from this amorphous idea to their first platform play, sforce (and various incarnations) to force.com to Salesforce1.com to the Customer Success Platform and now can reasonably say they are truly (and successfully) platform focused. Eyes on the prize.
This year, I'm going to leave the platform discussion at that.
There are two important other reasons, though, that go to the heart of future impact and why they continue to be successful in the present...and down the road. First, it is their willingness to take risks based on smart prognostication. They are not risk-aversive like most companies - and that is an understatement. Salesforce never stopped excelling at taking well considered risks - long after 2003. A more recent case in point.
In 2012, Marc Benioff announced that their next billion-dollar business will be his Marketing Cloud. Keep in mind that he said this when all they had was Radian 6 and Buddy Media, though they were applications that had some real value, by no means did they constitute a marketing cloud - not even close. It wasn't until the extremely bold and expensive move of acquiring Exact Target did they have what could have been called a marketing cloud with some legitimacy - and that only after they stitched the pieces together into a cohesive suite. Which they have now done. AND, as a result, Marketing Cloud is well on the way to being a billion-dollar business.
What makes them the continuing winner in the elite category they are is that they are not willing to rest on their laurels. In late 2014, they placed another calculated bet - that the health services market is going to be their next billion-dollar business. What made this particularly interesting is that Salesforce, while present in vertical markets, hadn't really had as much impact as SAP or Microsoft - and hadn't lived up to its own expectations in places like public sector, where they had intended to "train an army of 1000 integrators". However, these slow starts didn't deter Salesforce. In 2015 at Dreamforce, they announced the launch of the Health Cloud. While I have a recommendation in the section below (as always), this is a truly smart move and one that just makes Salesforce's impact all the greater. The case for focusing on this particular vertical is strong. Two stats make it an obvious choice:
- Health care expenditures in the U.S. alone were $3.1 trillion in 2014 and are expected to be $5.43 trillion by 2024, according to government projections.
- According to Gartner, the expenditures on health care technology alone were more than $100 billion in 2015 - making it, for example, almost four times the size of the CRM market when it came to spend.
But these kinds of moves are not the only things that put Salesforce up as an Elite with a lot of impact - a complete company with all the pieces. Their recent move to oppose the Georgia legislature's attempt to pass the so-called "Religious Freedom" bill - which basically denies same-sex marriage rights, led to overt opposition from Salesforce to the point of threatening to stop doing business in and with the State, similar to what they did in Indiana last year.
Regardless of where you stand on the issues (and to be clear, when it comes to Georgia - and in the past Indiana - I stand totally shoulder to shoulder with Salesforce), combine this with the work that Salesforce is doing with the table setting Salesforce Foundation and you get an idea that this is a company looking to have not only a business impact but a social impact on the globe - and is willing to take public and highly publicized risks to achieve that impact. The epitome of an elite winner of the Watchlist.
Now take all of this and combine it with their strong product offerings, their messages around the connected customer, which, for them is the perfect message - and resonates with the business evolution of the 21st century (not a revolution) - and you see a company that has employees from other companies thinking of them as the first landing spot if they are looking for a new job; technology companies making their first integration Salesforce, and a general fascination about the company that is normally just reserved for consumer tech companies like Apple. Salesforce does things with a flair - but it's a flair with a laser-like focus - and it never wavers from that - and has been having an impact on the business world and across the globe generally that I rarely see.
That said, of course, there are things that they could do - and if I have anything to say about it - and I don't - they would do, to expand their footprint and make that shoe hit the ground even harder.
Things they can do
Focus on analytics - A few months ago, the Salesforce selling point on the Analytics Cloud was its "uber-like" interface, not exactly a confidence inspiring message, given that when it comes to industrial grade technology (software and services), the power of the algorithms to get results was the first and foremost necessary focus. Now, they have the inestimable powers of Bob Stutz, a CRM industry legend on board as Chief Analytics Officer, and if his history at Siebel, SAP, and Microsoft are any indicator, Salesforce's analytics offering is getting ready for an overhaul - and true to the risk-taking tradition - an ambitious one. Do I know this for certain? No. But I do know that Salesforce started behind the eight ball with analytics a few years ago, and now are behind maybe the cue ball to their credit, but that's not enough given their competition. You can't just dismiss SAP, Oracle, IBM or SAS when it comes to analytics as "old school". All of them are highly competitive, fully aware of the transformation of the market and more suited to market needs from the standpoint of their algorithmic power than Salesforce currently. Bob Stutz is the guy who can bring Salesforce up to par and even beyond to...birdie? Eagle? Whatever. But this has to be a PRIME focus for Salesforce.
Vertical expansion - Salesforce is clearly expanding its focus on vertical industries with the launch of the Financial Cloud and the Health Cloud. They have a decent though not excessive presence in the public sector, really going great guns in higher education, have some very good traction in the non-profit world and a presence though not an organized vertical practice in the sports, media, entertainment universe. Good start, but still nowhere near the 24 some odd verticals that SAP has or the level of presence that Microsoft has either. That said, this is a prime opportunity for Salesforce because horizontally, they have no peers in their universal penetration. I'm not suggesting which verticals at the moment, though there are a few that I might mention at some point (I'm such a tease) but give the industries leader at the company, the excellent John Wookey, what he needs and let him run. Now for a specific on this theme.
And more specifically... the Health and Wellness Cloud - The Apigee Institute in their 2015 Digital Impact Survey, found that more than 62 million Americans (37 percent of adult smartphone owners) feel that they are healthier thanks to their smartphone and apps.
Some of this is perception of course. Sixty-six percent of those using either fitness devices or fitness and health apps to track health and fitness, and 78 percent of those using both a fitness device as well as apps via their smartphone to manage their health and wellness felt healthier for it. Ninety percent (90 percent) feel that the devices give them more control over their lives - which is the whole story actually.
Half of all smartphone owners (49 percent) say they want their doctor to use their data from a fitness tracker and/or health apps, and 80 percent of respondents expect doctors to offer key functionality via apps within the next one to two years.
Millennials are also shifting the way they view healthcare, with nearly one in three already saying they would prefer a doctor who uses app and fitness tracker data as a regular part of their medical practice.
So what does this tell you? It tells me that as part of the transformation of health we are seeing now, people are not merely interested in patient record access online, but are also very interested in taking control over their own health journey - including the preventative aspects such as exercise, nutrition, psychological and spiritual. They are interested in having information available at their fingertips, such as WebMD, not so they can supersede their doctors - only a stupid few think they know more than the medical professionals they use - but to support an intelligent discussion about their health.
What Salesforce has focused on so far with their Health cloud is the patient relationship to the doctors. And that is rightfully where they should start. What that means at the moment is that with the Health Cloud, you have things like:
- Medical profiles
- Medication scheduling
- Patient caregiver maps
- Device related alerts (appointments, medication timings)
- Chatter embedded for conversations with professionals
- Private communities based on the coordination of care.
- HIPAA regulatory compliance tools including auditing
- Integration with medical systems, devices and service integration
All of this is great stuff. No question and a step forward in the attainment of a successful relationship between patient and doctor. But there is a large opportunity being lost here around wellness. Salesforce is unique in its rather remarkable ability to straddle the lines between consumer and business. They have been among the most successful at "consumerizing" the business experience in ways that make the use of their tools actually interesting and enjoyable beyond just utilitarian. That gives them a leg up on most other companies. But while they are not embracing this chance to incorporate wellness into a health ecosystem, the wellness vendors like Precor, the fitness equipment company are putting all the data from their machines and the human users into the cloud. In fact, they are taking it a step forward and creating a wellness-related technology ecosystem via the provision of an Open API for the Preva platform that they are using for their cloud connectivity.
Salesforce needs to take another leap and make their Health Cloud not just a platform but an ecosystem play. The market is huge and the opportunity bountiful - and nascent.
But whether or not they heed any of my advice, there is no doubt that Salesforce is built to have an impact for years to come. They have thought this through as a complete company, not just a product cranking machine. They have the right focus, and its laser like - and the right messages and they are universal. They are elite in my book - and for that matter, probably anyone's book.