What effect will the Salesforce acquisitions have on your future?

After having bought 10 companies in 2016, analysts are watching the next step of Salesforce-whether it’s more acquisitions or more integrations.  SQDM shares an article published by the portal Techtarget, where they review possible avenues for Salesforce and for the technologies it has been acquiring.

Few software companies did more than Salesforce in 2016.

After seeing Salesforce spend more than $5 billion on acquisitions last year, analysts are beginning to put together the puzzle of Salesforce’s plans.

One analyst believes that by integrating Salesforce acquisitions with existing products, Salesforce aims to become a software platform that customers rarely have to give up.

“I think they’re surreptitiously building a strong collaboration platform,” says Alan Lepofsky of Constellation Research Inc. “We’re not necessarily thinking about Salesforce versus Office365 or GSuite, but I think you can think that way in 2017.  They want people to do their jobs within Salesforce as much as possible.

The Salesforce acquisition chain seems to support that sentiment-as the acquisitions of Quip document manager and an evolving SalesforceIQ have helped to strengthen the company’s offerings.

However, with more than $5 billion in acquisitions in a single year, the question of how well such acquisitions will integrate with existing applications is still being answered.

“When you look at one end of the spectrum, you see the Frankenstein that the Oracle platform is after 20 years of acquisitions,” says Lepofsky.  “To penetrate larger swaths within a company, [Salesforce] had to grow and enter other markets.  They are doing very well building a layer that expands everything.

The recent purchase of Twin Prime, which helps mobile applications perform better, is the most recent example of a Salesforce acquisition that extends across its products.

Several Salesforce products have already been integrated including the transformation from SteelBrick to Salesforce CPQ; the HeyWire messaging application to Salesforce LiveMessage; and the integration of Quip within the Salesforce platform

In 2016 most of Salesforce’s acquisitions were linked to artificial intelligence-which eventually helped build Einstein, Salesforce’s AI offering.  While Einstein is the largest Salesforce rollout since the emergence of Wave, it is too early to see the benefits offered to customers – Einstein is supposed to be of greater benefit to business companies. “It takes a lot of data to exploit those capabilities and you have to have hundreds of thousands of customer records and support interactions.  No strategic artificial reasoning can be obtained with small amounts of data.

If Salesforce continues with acquisitions in 2017, it will be very useful to detail whether they are satisfied with their product portfolio or if they still detect gaps to be filled.

“The way they continue to innovate and achieve their vision will likely be through their purchasing decisions, as well as the level of success in integration,” said Karl Becker of The Carruthers Group.  “If the technology market continues to be attractive with respect to acquisition opportunities, then we should expect continued strategic acquisitions from Salesforce.

Addressing financial analysts in August during a financial results conference, Salesforce CEO Marc Benioff attributed the 2016 buying spree to changing market conditions and “some incredible opportunities” to buy “unique companies with unique technologies. Benioff also described Salesforce Einstein’s technology as an example of that “combining organic innovation with some incredible acquisitions.

One area that could benefit from further product development is real-time communication.  While the addition of Salesforce LiveMessage to the Service Cloud helps address that space, Lepofsky believes there’s more work to be done with respect to customer communication.

“Customer support is an area where they’re a little weak,” says Lepofsky. “I’d like to see Salesforce take its proposal up there-there’s no assurance that it will be through development or partnership, but real-time communications are needed in their portfolio.  It is also believed that more innovation is possible within existing Salesforce products; “There is a lot of potential and they own much of the customer experience.  Gathering all the information on an account or a customer and using Einstein to establish patterns – that’s what I don’t see yet,” Lepofsky concludes.

There’s no denying that this past year has been a pivotal one for Salesforce-which has gone from being a primarily marketing and sales software company to a company with broader goals.   Whether Salesforce focuses on building a platform that understands the entire customer experience or continues to acquire companies to achieve the same goal are two possible scenarios in 2017.

“I believe Salesforce will evolve from a marketing and sales platform to a customer lifecycle ecosystem, focusing on delivering the most timely and relevant experiences,” says Becker.

Read the full article, here.

For more than ten years SQDM -Software Quality Driven Management- has advised a number of companies with professional consulting services on CRM solutions.  SQDM is an official business partner of world-class manufacturers in these technologies, including Salesforce, Oracle and Microsoft.

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