This post was originally written in 2011 and updated with the addition of the first addendum in January of this year. The first original post was written in 2011, but did not make it over in the transition to the new site. A second addendum has been added to reflect what has transpired over the course of this year. Over the course of this year the predictions and the course that SFDC has followed has pretty much the post below. In the last nine months SFDC has made a few more acquisitions and their latest in the HR field. This is in my estimation a push into the back-end of the enterprise. I see this as their crossover vendor that will start SFDC to encroach upon the full ERP space and with strategic acquisitions see their current portfolio grow more horizontally. The expanding of the portfolio will prove a valid threat to other SaaS ERP vendors.
Sales, marketing and service clouds, SalesForce Work, Force.com and Chatter are starting to assemble module functionality that will soon expand to cover the entire enterprise.
The Marketing cloud will surely be added to by adding an automated email marketing automation software such as Pardot, Acton or the like. Their recent HR acquisition may cause someone like Kronos or some other HR may soon follow to deepen their HCM portfolio. The two manufacturing vendors Kenandy and Rootstock that offer manufacturing capabilities on the Force.com platform can round out the manufacturing portion. The SFDC strategy of building a good functional component and then moving onto the next part of their portfolio may come into play here.
Below is the original post from 2011:
Now that Sales force has released Chatter the marketplace will have a new collaboration software for consumers to choose. This provides a platform for an iteration of a unified communication strategy.
Now that Salesforce.com has introduced their Force.com application development platform for enterprise software development allows integration much easier than before. Organizations now have a base technology platform to integrate and design their infrastructure around.
The recent acquisition of Radian 6 for social media marketing and analysis tools suggests that SFDC will morph into an eventual enterprise vendor with full ERP functionality. By adding Radian 6 to their marketing mix of Chatter and Jigsaw SFDC is quickly rounding into a full CRM with marketing automation and sale force automation functionality. It would seem the strategy is build out a robust CRM with full functionality and then attack other parts of the enterprise functionality. The Force platform allows other third party vendors to tap into the popularity of SFDC and quickly add their own functionality to the CRM based SFDC thereby extending usable enterprise software modules.
Microsoft has Outlook, Dynamics CRM and SharePoint that provides a decent content management system along with workflow. Lotus Notes has the Domino Suite and since Netsuite has added Suiteflow to its offering all vendors in this space must take notice as to the new players in this field. Lotus Notes has included many new communication tools for unified communication strategies.
Chatter and Radian 6 provide the social media and analytics aspect for SFDC. Features such as full marketing automation, customer self-service, reporting, workflow management, cataloguing, customer service integration and knowledge management may be indications as to the types of vendors they are looking to acquire next. If extending to full CRM capabilities to the likes of SAP, Oracle (Siebel) Pivotal etc. then SFDC has some ways to go before they start acquiring other enterprise applications and may be a while before you see an ERP created by Salesforce. The logical course of action would be to fully create an enterprise level CRM with full capabilities of the bigger CRM functions and then move onto building other parts of the platform and application.
With force starting as a CRM and adding social components it challenge will to find equally compatible solutions to round out their offering towards more of an ERP like solution. The ecosystem of partners for SFDC is vast and many vendors are racing to tweak the API’s for seamless integration to the Force platform to add additional functionality.
Addendum 1:
Salesforce has recently been on a buying spree for its cloud strategy. Thereby changing and will surely incorporate all their new purchases into the SFDC platform and then application. This is one aspect that SFDC is really good at executing. They have the ability to include their newly purchased apps into their application and thereby extend the Force.com platform. With some of their recent purchases it seems that SFDC has crossed the chasm into large enterprises rather than being thought of as an SMB application. First addendum
Addendum 2:
We have seen where a few of the Force.com partners have written a complete ERP on the Force platform with seamless integration to SFDC and chatter. It may be easier down the road for SFDC to buy one of these partners to compete with Netsuite as a full cloud ERP. This will compete with cloud ERP vendors for Services and possibly manufacturing if they acquire a vendor that offers an ERP which is already on the Force platform – easy integration. Since their recent announcements of large enterprise deals that Benioff announced just before Dreamforce 2012 it seems that SFDC is moving upmarket and with that will come the need for larger applications that the upper market will demand.
It will be fun to see what it is announced at DF2012 we look forward to what they have in store for us next.
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