Can Salesforce.com Really Take the Social Enterprise Market?

Can Salesforce.com Really Take the Social Enterprise Market?:from Business 2 Community by Ori Yankelev

In my last post I discussed some of the announcements made at Dreamforce 2012 and the continuation of salesforce.com’s expansion deeper into the social enterprise space and other peripheral markets including marketing automation, performance management, cloud storage, and identity services. My last post ended with the suggestion that while salesforce.com may be spreading themselves thin by expanding into new competitive markets, they are quickly becoming one of the most well-positioned companies in the social enterprise market.
In his keynote speech to kick-off Dreamforce 2012, salesforce.com CEO Marc Benioff gave insights into not only the company’s road map, but also salesforce.com’s strategy to compete in the still-developing social enterprise market. What salesforce.com is doing with social enterprise isn’t new, but it does appear to be a smart approach to competing in the social business market against the other major players.
In an article in Business2Community, SAP VP of Social Media Audience Marketing, Ted Sapountzis laid out his view of the “Social Enterprise Software Stack”. Below is a slightly modified version of the original image in which I have highlighted salesforce.com’s presence in each of the sub-sectors (noted by a red circle), and adjusted the position of Radian6 because I believe its core functionalities span across both the Engagement and Monitoring/Analytics subsectors as defined in the details in Sapountzis’s follow-up post.
What the modified image below points out is that so far, salesforce.com has built or acquired their way into six of the eight sub-sectors laid out in this depiction of the “Social Enterprise Software Stack”.

Original image from Ted Sapountzis posted on Business2Community

Another depiction of the social business ecosystem is in “IDC’s Social Business Taxonomy,” in which they map-out the business processes, technologies, and technology sub-markets that have formed as these businesses begin to leverage social technology. Again, I have slightly modified their original image here to demonstrate salesforce.com’s presence in each of the social business markets and sub-markets. What you’ll also notice in this model (that aren’t included in the one above) are three of salesforce.com’s most recent acquisitions, ChoicePass, GoInstant, and ThinkFuse. Each of these companies has some technology that fits very nicely into this model of the ecosystem.

Original image from IDC Social Business Taxonomy 2011

Another difference between the IDC image and Ted Sapountzis’s image is the presence of Enterprise Resource (ERM) and Digital Commerce as part of the social business market. I believe that the ERM sub-market is an important distinction, and one that is key to salesforce.com’s strategy in the social business market. In both depictions of the social business market the technologies and associated business processes are primarily “front office”. With the exception of HCM (Human Capital Management) and PPM (Project Portfolio Management), the rest of the sub markets are “front office” tools, which is where salesforce.com’s core bread and butter has always been.
Business is social, and now the way business gets done is becoming more social thanks to some of the great technologies in this market. And like salesforce.com, huge technology companies such as Oracle, Microsoft, and Google (among many others) are acquiring those technologies to make their own applications more social. Eventually, all business will be done with social-media-style applications, feeds, “like” buttons, profile walls, groups, and sharing, and we won’t be talking about the Social Enterprise market anymore because the term will become irrelevant. Today, however, there is still a very relevant race to become the company that can provide a social answer to all of our traditional business applications, including the back office.
From this reality comes the billion dollar question for companies in this race: what is the key leverage point? Which process or application will give them the most leverage and allow them to capture the most market share for their social applications before companies go to someone else’s? If the answer to that question is CRM, then salesforce.com may already have a leg up. But the answer could also be community/collaboration platforms such as Yammer, Jive, SAP Streamwork, and Salesforce Chatter. It could also be none of these.
Salesforce.com was not one of the first companies to enter the social enterprise market, and according to this IDC report their market share is tiny compared to their competitors. However, the company has managed to acquire most of the key pieces needed to build the current enterprise stack, and has begun integrating them into the business. It has also acquired several new technologies that gives it access to the social ERM space, a beachhead to a future social “back office”. Another thing it has going for it is broad access to the SaaS business market. According to Gartner, an estimated 35% of the CRM market is using a SaaS CRM, and with an estimated 16.7% of the total global market, salesforce.com surely has an even larger share of the SaaS market. This could indicate that salesforce.com customers are more likely to adopt new social technologies faster than others, much the same way they adopted SaaS and the “cloud”.
Watching the social enterprise market develop over the next five to ten years will certainly be exciting. With the market still taking shape, it is too early for any one vendor to claim dominance. What can be said however, is that the major software companies are all gearing up for the race, and I believe that salesforce.com has the potential to become one of the top social business vendors within the next five years.
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