Can Salesforce continually expand, become relationship operating system?

Customer relationship management software is being reinvented and Salesforce appears to be betting that it can become the user interface of corporations.
Written by Larry Dignan, Contributor

Salesforce this week made a series of moves that aim to expand the role of customer relationship management software and reinvent it into something resembling a business operating system.

We'll sum up Salesforce's launches at Dreamforce--App Cloud, Wave Analytics updates, SalesforceIQ, which is an expansion of its RelateIQ technology, and an IoT Cloud--simply: The company is building a relationship OS (for lack of a better term) that will serve as the front end of your business. Instead of relationship OS, you could consider a people OS too.

If you broadly define Salesforce's platform the company's efforts are starting to extend well beyond customer relationship management (CRM). Technically all of Salesforce's moves revolve around customers so the CRM acronym still applies. But the definition of "customer" is broadening. Salesforce is dabbling in the health industry where the customer is the patient. In Salesforce's fledgling human resources effort the employee is the customer. Replace customer with merely a word like person and you get a sense of where Salesforce is going. Everyone on the planet is a customer of some sort. Broadly defined Salesforce is becoming a relationship management company and that relationship can range from a person to a device.

What's happening at Dreamforce this week is that Salesforce is connecting what looks like a series of disparate moves driven by the need for revenue growth into a relationship stack. Consider:

How's Salesforce's efforts equate to a business relationship operating system? Let's take the standard definition of an OS, which in this analogy would have the cloud as the base layer.

An operating system (OS) is system software that manages computer hardware and software resources and provides common services for computer programs. The operating system is an essential component of the system software in a computer system.

Now let's apply that definition to what Salesforce appears to be building:

A relationship operating system is business software that manages customers, partners and employees and business resources and provides common services for revenue generation. The relationship operating system is an essential component of a business.

Now the concept of trying to take CRM to larger pastures isn't exactly unique and there are multiple companies chasing the people and relationship layer of a business. Microsoft is talking about CRM, but doing everything possible to note the built-in intelligence and engagement technology. Microsoft sees CRM as more of an automation and productivity tool for businesses. SAP also talks engagement and moving "beyond CRM" to close more deals. On Tuesday, SAP better integrated its CRM with engagement and commerce. Oracle also has an engagement thread when it talks CRM.

So what makes Salesforce's effort to expand CRM notable? Focus. Microsoft has CRM, Azure, Windows Server, Bing, Xbox, Windows and a bevy of other products to develop. SAP and Oracle are more about enterprise resource planning, databases and applications. Critics would say those two companies are really about maintenance revenue.

When my relationship OS concept was noted to high-level executives at Salesforce the reaction was interesting. Adam Bosworth, the mastermind behind Salesforce's IoT cloud infrastructure, said CRM is changing but the term applies to a broader market now and is becoming more intelligent and automated. Steve Loughlin, CEO of RelateIQ who now runs SalesforceIQ, said embedded intelligence and mapping relationships is critical to the concept. Alex Dayon, president of Salesforce's products, said CRM has moved from "a system of record to a system of engagement to a system of intelligence." They all agreed CRM is evolving in a hurry.

Dayon and Loughlin seemed to like the concept of a relationship operating system. Unfortunately, no one was coughing up roadmaps in the years to come. My take: Don't be surprised if Salesforce tries to further redefine CRM. What's clear to me is that Salesforce is looking to be the connective tissue between your business, data, relationships and intelligence. At the least, Salesforce hopes to be the user interface of your business.

Time to rename Salesforce?

Should Salesforce seriously aim to be the business connective tissue of the enterprise and relationship management system of choice it will have challenges.

First, Salesforce will run into specialists as it expands. For instance, Workday argues that HR and financials go together and serve as a business operating system with analytics and data science built in. Salesforce integrates with Workday yet has an HR effort where it tries to step in front as a user interface. Analytics Cloud will expand the perception and use of Salesforce, but will take time to develop. In IoT, Salesforce will run into a bevy of players, but could fare well if it can surface data easily.

But perhaps the biggest issue facing Salesforce is its identity to date. Salesforce is known as a sales and service operating system. Salesforce is about CRM. Hell, CRM is even the company's ticker symbol. That focus on CRM is also likely to be used by competitors to argue Salesforce lacks key technology components.

SAP's Steve Lucas, global president of SAP's Platform Solutions Group, in an interview tried out the argument as the company launched new CRM tools. SAP's take on reinventing CRM is that it has to be integrated with commerce, engagement and back-end systems. It's not surprising that SAP happens to run finance and back-end systems. "Salesforce has a narrow view of the world. Do you want to manage a relationship or be about true engagement?" said Lucas. "The entire category needs to evolve."

Without prodding, Lucas noted that Salesforce's ticker indicates how limited its view is. It's unclear whether a stock symbol like CRM is actually a handicap, but rest assured that Salesforce rivals will push the point.

At some point, what could be in order is a renaming of the company. Salesforce has subtly noted that it's about more than sales. After all, Salesforce pitches itself as a customer success platform. In the early days, Salesforce was about ditching software for the cloud delivery model. Maybe the name won't matter as long as Salesforce deliver s on its master plan and runs more businesses on the front end. It's heresy to think that a company that has built up such brand equity would have to ditch it. Then again RelationshipIQ could someday be an option Salesforce. A new moniker would reflect better on what the company is actually becoming.

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