Salesforce eyes international expansion one country at a time

Salesforce is eyeing expansion in Europe and hoping to replicate its success in Japan.
Written by Larry Dignan, Contributor

Salesforce.com is looking to scale its business as it lands larger enterprise software deals and eyes international expansion.

George Hu, chief operating officer of Salesforce, speaking at a Wells Fargo technology conference on Wednesday, made the following points:

  • The company has organized around enterprise and SMB sales.
  • Ultimately, Salesforce sees itself as the front-end system of record, or "system of engagement."
  • Social enterprise projects are driving more high-level engagements with the C-suite.

But the broader item in Hu's chat revolved around international expansion. Today, Salesforce has a lot of traction in two countries---the U.S. and Japan. In the future, Salesforce is eying the EU.

Hu outlined the international strategy and lessons learned:

In terms of the rest of the international strategy, one thing I think that we did was very -- I think was a conscious strategic decision we made after kind of looking at the market because like five or six years ago, we were very broadly distributed internationally. And I think that was a mistake, that we had like two people in country A, three people in country B, four people in country C and we said, no, that is not -- we looked at the success we had in Japan by focusing and we said we are going to follow that model. We are going to look at just -- because, at the end of the day, there is only -- the reality is that once you go down that long tail, there is only like seven to 10 enterprise software markets that really make up the lion's share, the majority of the spending.

And so we are going to focus on those countries. We are going to really double down distribution and I think you're -- we've made huge investments in a much more focused way following the Japan model. Japan took us a decade, by the way, to get to where we are today and I think we're much more successful in Japan than any other enterprise software company, but it took a lot of focus and a lot of investment and that is the lesson.

So we are replicating that model. We are starting to see some good early returns from that model and you are seeing us really focus on the UK, really focus on France, really focus on Germany. And I think given what is happening in Europe in aggregate right now, we are doing as well or better than anyone else frankly in the market. We see huge opportunity there and I just really believe in the strategy and I think we are seeing the returns of it. And I think that we hit the tipping point in the US, we hit the tipping point in Japan. I don't think we have hit the tipping point yet honestly in Europe.


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