Salesforce Adds The Power of Data Science to Its Service and Marketing Clouds

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Leading Customer Relationship Management (CRM) software vendor Salesforce.com (NYSE: CRM) recently announced the addition of data science capabilities to its Service Cloud [1] and Marketing Cloud. [2] In the Service Cloud, the power of data science will be harnessed for automation of certain customer service tasks. In the Marketing Cloud, marketers will be able to use data science for predictive and targeted marketing. The latest product releases follow Salesforce CEO Marc Benioff’s recent claim that the revolution in data science will fundamentally change how businesses are run. [3]

Salesforce had so far lagged behind competitors like Oracle Corp. (NYSE: ORCL) and SAP SE (NYSE: SAP) in predictive analytics. Oracle already utilizes data science for predictive analytics in its Business Intelligence suite. SAP also recently released a contextual marketing platform for telecommunication companies, which utilizes data science for targeted marketing. [4] Now, Salesforce has also jumped on the data science bandwagon with its new Service Cloud Intelligence Engine and Marketing Cloud Predictive Decisions.

We have a price estimate of $60 for Salesforce.com, which is about 10% lower than its current market price.

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See our complete analysis of Salesforce.com here

Service Cloud Intelligence Engine: Intelligent Resource Allocation in Customer Service

Salesforce’s new Service Cloud Intelligence Engine is aimed at efficient and automated allocation of customer service requests and customer service agents’ workloads. That is, cases get assigned to agents based on skill set, case history and other specified factors, thereby optimizing resolution of customer service requests. Further, the Intelligence Engine automates the distribution and management of workloads based on expertise and case load, thus maximizing productivity. It also includes intelligent automation of business processes, like escalation of cases to other departments and distribution of potential sales leads to sales teams.

Salesforce will release the Service Cloud Intelligence Engine for general availability later this year. The company has not announced the pricing yet, which suggests that the Intelligence Engine may not be a free add-on product like most of Salesforce’s recent offerings (Read: It’s Products Galore From Enterprise Software Vendors).

Marketing Cloud Predictive Decisions: Efficient Targeted Advertising

The Marketing Cloud Predictive Decisions product offers three primary features to marketers – the  collection of customers’ behavioral data, predictive analysis for advertising optimization, and workflow automation. The Collect Beacon component of the product collects real-time content updates and user behavioral data to constantly update the user database and predictive decisions. The Native Predictive Division component predicts which content will result in the highest conversion rates, while the automated workflow can trigger marketing campaigns using data from all available channels.

The Marketing Cloud Predictive Decisions product will be available from May 2015. Pricing will begin from $1,250 per month.

Prospect of Incremental Revenue a Welcome Development

It is encouraging to note that Salesforce is releasing revenue generating innovations rather than just minor add-on features available to existing users free of cost. A number of minor features recently introduced by Salesforce do not provide any incremental revenue for the company (Read: Salesforce Releases Product That Lets Businesses Create Custom Enterprise App Stores), which makes the above two offerings a welcome change of pace.

New potential revenue streams are more significant for Salesforce now than ever before as its hitherto unhindered growth from the CRM segment is slowing a bit. (Read: Salesforce Posts Strong Q4 Results, Eyes Analytics Market to Drive Future Growth) The latest products may well be the beginning of Salesforce’s drive towards the analytics business, which it believes to be its next key growth driver. However, Salesforce will need to make a much bigger statement than the above two products if it hopes to capitalize on the burgeoning potential of the analytics industry.

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Notes:
  1. Salesforce Unveils Service Cloud Intelligence Engine, Salesforce Press Release, March 9, 2015 []
  2. Salesforce Launches Marketing Cloud Predictive Decisions, Salesforce Press Release, March 5, 2015 []
  3. Marc Benioff: “The Revolution in Data Science Will Fundamentally Change How We Run Our Business”, Fortune, January 22, 2015 []
  4. SAP Announces Contextual Marketing Platform Designed for Telcos, SAP Press Release, March 3, 2015 []