Is Everyone Trying to Look Like Salesforce?

Last week I lamented how the legacy software establishment was focusing on the easy-to-sell parts of cloud computing without really providing the essence of cloud. Since then, I have been inspired by a couple of articles at Business Insider that point in a different though not opposite direction.

“Oracle Is Starting to Look a Lot Like SFDC” makes the point that in buying Vitrue, Oracle has dipped another toe in social marketing and is increasingly looking like Salesforce. Business Insider also reports on the fertile rumor that Microsoft might be buying Yammer, a collaboration product. That could be a done deal by time you read this.

Whatever the truth is, it appears to me that Oracle’s buying spree in 2011 has made it OK for well-heeled companies, who are late or semi-late to the social-mobile-cloud party, to buy their R&D. Or more accurately, these guys don’t ask for permission, so it’s now game on and the stampede has started.

Imitators on the March

So, is everyone really trying to look like Salesforce? Wouldn’t you try to if you were in a similar position? To be sure, no one wants to be exactly like Salesforce; after all, they need some differentiation. But in the “imitation is the sincerest form of flattery” department, you have to say that Salesforce has big style points.

To me the big difference between Salesforce and everyone else at this point is the company’s thought leadership more than any specific product (not knocking any products, just sayin’). Salesforce continues to pursue applying the idea of the social enterprise while the rest of the field is working as fast as possible to deliver product, and the gap between the two approaches is big. I don’t get the impression that other vendors are providing a rationale for their revised suites, and that’s critical.

The world is changing, and front-office software will be critical to helping business transition, but all we seem to get is product without rationale. In that situation, it makes a comparison with Salesforce more important. The trap I see is that vendors are trying to sell their products while addressing Salesforce’s thought leadership, and that’s not a recipe for market leadership.

As I’ve said before, Salesforce, under the direction of Marc Benioff, has relentlessly pursued a blue ocean strategy in which the company uses its revenue stream from CRM to fund development and expansion of new markets. And these aren’t just any new markets. Usually, they are net new ideas that the company can establish itself in as the dominant player. You can see this operating in the social enterprise strategy.

A Truly Different Vision

People are commenting on the rush to buy companies that compete with some aspect of Salesforce’s social offerings, such as Yammer and Vitrue, for good reason. Older companies have failed, for the most part, in doing the long-term research and development they needed to do over the last decade to have native applications to compete with Salesforce.

I suppose you can’t blame them for being slow on the uptake. For every Salesforce, there have been hundreds of companies intent on taking the big guys’ market share, but most have not made much of a dent. Nonetheless, the market shift has followed Clay Christensen’s blueprint (Innovator’s Dilemma) very faithfully. I don’t see companies like Oracle and Microsoft folding the tent any time soon, but their profitability might have an upper limit if they can’t convince everyone of their social, mobile and cloud chops.

The best way to do this is to articulate a vision of business in the near to intermediate future that is not simply better and faster — I don’t think that’s where we are — but truly different. That doesn’t mean you stop making acquisitions, but it does say you need to be more out front of the headline-grabbing buys with some business strategies that are clear and that fit the future need. And you need to articulate this.

Denis Pombriant

Denis Pombriant is the managing principal of the Beagle Research Group, a CRM market research firm and consultancy. Pombriant's research concentrates on evolving product ideas and emerging companies in the sales, marketing and call center disciplines. His research is freely distributed through a blog and website. He is the author of Hello, Ladies! Dispatches from the Social CRM Frontier and can be reached at [email protected].

1 Comment

  • There are advantages to being a leader in an industry. Everyone is trying to look like Salesforce for a reason, but perhaps the reason needs to be more defined. Without a clear strategy and value proposition to differentiate your product, you will end up being just another "me too!" in the pool. Salesforce consistently wins for Benoiff’s vision and the company’s dedication to Cloud. Without boxing themselves in, they can become "the social enterprise" while shifting their focus to social and more. If other companies want to be able to compete in the same realm, they first need to establish their own vision and what really makes them innovative and able to make a difference. It’s those companies that are the most successful, not the ones racing to catch up to the big boys.

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