Disclaimer: Although my presentation of Salesforce is still a couple weeks out, I figured the articles and our the talk with the homie Al may have peeked some interest so I might as well go for it.
Above looms San Francisco’s new Salesforce building. A force of change for San Francisco both through its size and design. This picture comes from this NYT article which does a great job of describing its significance.
For myself and many other bay area natives, Salesforce was little more than another tech company from the valley before the emergence of great index finger in the sky. My limited knowledge of the company was partly due to the fact that it was one of the few of up and coming tech giants that had no bearing on my daily life. Now, I can’t get within 20 miles of the city without being reminded of its presence.
Despite the massive physical presence Salesforce now has in my life back home, I can’t say I knew much about the company until our Skype call with our new friend Al Dea. Since everyone that’s reading this was likely also in class that day, I’m going to skip the Salesforce introduction and instead jump straight to the thing that I (and likely others) was still confused by. That thing is the umbrella that all of Saleforce’s products fall under and it’s called CRM.
So what or who is CRM?
You know something is convoluted when even after you spell out the acronym, you don’t feel any closer to understanding it. That’s at least how I felt when I heard that CRM stood for customer relationship management system.
When you search “what is CRM” the first seven or so results are either Salesforce sponsored or organic results of Salesforce articles or videos. The first link brought me to Salesforce’s site which broke down CRM “as a way to store and manage prospect and customer information, like contact info, accounts, leads, and sales opportunities, in one central location.” While this description and video gave me a better idea of what CRM was used for, it wasn’t until I stumbled upon the good ol’ Wikipedia page for CRM that I felt like I really felt like I understood the overarching purpose of CRM. The wiki page says:
“Customer relationship management (CRM) is an approach to manage a company’s interaction with current and potential customers. It uses data analysis about customers’ history with a company to improve business relationships with customers, specifically focusing on customer retention and ultimately driving sales growth.”
The Evolution of CRM and Salesforce
Now that we’re all on the same page regarding CRM’s parts and purpose, I want to show you how Salesforce was responsible for this concept’s advancement. While most of the articles we read for our Salesforce case study (see bottom of post for the articles) highlighted Salesforce’s leader, Marc Benioff’s, extraordinary leadership, only the Product Habits article explored Salesforce’s history in depth and showed it emerged from the idea of making CRM simpler and thus more effective for businesses.
Since this history is necessary in understanding Salesforce’s evolvement alongside CRM’s evolvement, I will summarize it as best I can. The main CRM advancements that the Product Habit article points out is Salesforce scaling from solely a software as a service (SaaS) to also being a platform as a service (PaaS). Before we continue however, let me remind everyone of some words you probably haven’t heard used since Computers in Management. In their simplest terms, software as a service is a cloud based tool while platform as a service is an environment on which you can build your own tools to implement and share amongst others using the same overarching SaaS. The advantage of the having both: customizability and network effects.
This transition from SaaS to PaaS occurred through a number of major developments which included the creation App Exchange (a place where you could sell the cloud based tools you made), Apex (a programming language made exclusively for the Salesforce environment), and Force.com (a place for people to develop tools using Apex and Saleforce’s first true PaaS). Additionally, they acquired companies like Desk.com and Social.com which helped them build out the CRM tools that the consumer was directly interacting with.
More than a CRM business… yet still a cloud software business
So here we are, present day. Salesforce is far more than just a CRM business, yet at its root still a cloud software business. Why is this important? Well unlike other tech superpowers and unicorns, Salesforce has seemed to have stayed disciplined and has done their best not to flirt with industry of ubiquity. Today, more than ever, there’s an ideology that tech is expanding so rapidly that really every industry is its own way also a part of the tech industry. While this isn’t completely incorrect, many tech giants seem to use this rational as justification for dipping their toes in any industry of their pleasing and then drawing some abstract relationship between their current product and their investment if ever asked about it. If you don’t believe me, just look in the news every now and then.
While Salesforce might not have as much money to throw around as the main culprits of ubiquitous innovation, Salesforce should still be given credit for their discipline. This credit can be justified by looking at Salesforce’s most “out-there” investments. In my opinion, these are the ones made through their venture arm, Salesforce Ventures. Despite covering a broad range of industries, Salesforce Ventures points out on their landing page that their fund is “one hundred percent invested in enterprise cloud software.” To me, this simple statement says we know what our space of influence is and we will not stray from it.
Despite Salesforce disciplined nature in terms of investment and expansion, the reality is that Salesforce’s core product – CRM – is difficult to understand, even for technically capable people. Knowing this, I believe that their future success will lie in finding ways to simplify their explanation of their services, the product line itself, and the network of third party services offered through the Salesforce platform. As Al pointed out in our Skype call, one of Salesforce’s main goals is to increase the number of people they reach. For me, it seems like the only way to do this is through continuing to find ways to visualize and verbally explain the tools that Salesforce offers without letting their virtual and relational existence muddy this understanding. Only through this clearer picture will Salesforce gain the notoriety that other successful B2B companies have managed to obtain in the past.