The One Theme Underpinning Salesforce’s Dreamforce 2015 and Its Entire Future

by Trefis Team
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Salesforce.com
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Last week saw the culmination of this year’s iteration of Salesforce.com’s (NYSE:CRM) annual extravaganza, Dreamforce. Over the course of the event, the company introduced two major products (Internet of Things (IoT) cloud and SalesforceIQ), released a major update to the Wave Analytics Cloud, and strengthened its partnership with Microsoft (NYSE:MSFT). Underpinning each of these announcements was one common theme – tighter integration with the entire Salesforce ecosystem. Through this integration, the company turns each new product into an extension of Salesforce’s Customer Success Platform, enabling them to offer a much wider range of capabilities than otherwise possible. It also opens up unprecedented cross-selling opportunities that could allow some products to piggyback on the success of others.

To illustrate, Salesforce’s IoT cloud will integrate the data collected from connected devices with the data from websites, social interactions and other customer data already available to Salesforce. [1] SalesforceIQ draws upon the information collected by Salesforce to deliver data-driven insights that will allow users to sell more effectively. [2] Similarly, the new update to Wave Analytics Cloud does what last year’s original release didn’t – integrate it better with the rest of Salesforce’s Customer Success Platform. [3] Lastly, Salesforce’s strengthened partnership with Microsoft serves one purpose alone – the better integration of Microsoft’s product with Salesforce’s ecosystem. [4]

The tightly integrated use of Salesforce’s capabilities across its entire spectrum of products is made possible by cloud computing. In this report, we delve into how Salesforce may come to define  Customer Relationship Management (CRM) software of the future with its close-knit products delivered over the cloud.

Our price estimate of $60 for Salesforce.com is about 15% lower than its current market price.

See our complete analysis for Salesforce.com here

Salesforce’s IoT Cloud Turns a Trillion Dollar Market Into a Selling Opportunity

The Internet of Things refers to the networking of physical objects through the use of embedded sensors, actuators, and other devices that can collect or transmit information about the objects. [5] IoT is widely considered to be the next big thing in technological development, insomuch that the McKinsey Global Institute estimates the IoT market to reach $6.2 trillion by 2025. IDC estimates the installed base of devices to expand from around 10 billion today to over 28 billion by 2020.

So where does Salesforce come in among all this? The network of interconnected devices generates a treasure trove of data, which can be leveraged to analyze consumer behavior and use the insights for selling products. Salesforce’s IoT Cloud goes one step ahead and combines the IoT data with the normal Internet data of the consumers. Naturally, analysis of the combination of both IoT and normal Internet data generates much more accurate insights. Salesforce plans to sell this data and the insights therefrom to marketers, who can in turn use it to optimize their marketing and selling tactics.

Supercharging Clouds With Tighter Integration

The secret sauce in Salesforce’s IoT Cloud is the efficient integration of IoT data with its core CRM ecosystem. Salesforce will not build the programs required to integrate connected devices with its IoT Cloud. Instead, the integration will be carried out by the customer itself, or through third party specialists like Informatica. Informatica is a longstanding partner of Salesforce and has been importing data into Salesforce’s CRM applications for 10 years. [6] Its close understanding of Salesforce’s CRM architecture and the partnership between the two companies will allow Salesforce to quickly integrate its customers’ devices with the IoT Cloud, and thus, with its entire Customer Success Platform.

Notably, the same strategy can be extended to all of Salesforce’s new products. A case in point is the recent update to the Wave Analytics Cloud. When Wave was introduced last year, it had limited integration with the rest of Salesforce’s CRM ecosystem. Now, users will be able to see Wave’s analysis and visualizations across Salesforce’s entire Customer Success Platform. [7] This level of integration allows users to benefit from the capabilities of multiple clouds at once, closely knitting the entire experience together.

Currently, the outliers to this strategy include Salesforce’s recently introduced Financial Services Cloud and Health Cloud. However, these are the first of Salesforce’s initiatives in the industry verticals segment and have yet to gain traction. It is possible that in the future, Salesforce may integrate these and other industry-specific clouds with the rest of its platform to allow cross-functional usage of the Wave Analytics Cloud.

This strategy puts Salesforce significantly ahead of its competitors in the CRM segment, most of whom are present either in cloud analytics or in cloud CRM, but not in both. The level of competition is even lower in industry verticals, for which custom CRM cloud solutions are at a nascent stage. Because of the aforementioned advantages, we believe that Salesforce is likely to continue to implement close integration across all its platforms.

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Notes:
  1. Salesforce Unveils Breakthrough Salesforce IoT Cloud, Powered by Salesforce Thunder, Salesforce Press Release, September 15, 2015 []
  2. Salesforce Delivers SalesforceIQ, the Future of Selling for Every Business, Salesforce Press Release, September 15, 2015 []
  3. Salesforce Unveils the Next Wave of Salesforce Analytics Cloud…, Salesforce Press Release, September 14, 2015 []
  4. Microsoft and Salesforce Strengthen Strategic Partnership at Dreamforce 2015, Salesforce Press Release, September 16, 2015 []
  5. The Internet of Things: Sizing up the opportunity, McKinsey, December 2014 []
  6. Salesforce IoT Cloud Success Rests On Informatica Partnership, InformationWeek, September 17, 2015 []
  7. Salesforce Unveils the Next Wave of Salesforce Analytics Cloud, Salesforce Press Release, September 14, 2015 []
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