March 18, 2014
Salesforce at 15: Market Share Leader in an Incredibly Competitive Industry
By Tracey E. Schelmetic
Cloud-based enterprise solutions provider Salesforce is just turning 15 years old. (Wow, you’re thinking…where did the time go? Good question.) As it celebrates its milestone, many analysts are looking back at its iconic rise to dominance in the customer relationship management (CRM) industry.
Salesforce was launched during the dot-com boom: a time when simply having a .com at the end of your company name was enough for the venture capital to start pouring in. People and financial firms invested heavily in companies whose products they didn’t even understand. A satirical editorial widely shared in 2001 featured a Cisco (News - Alert) investor shocked to realize that Cisco wasn’t just a “famous stock,” but “may in fact have been operating as a large company that makes complex and incomprehensible equipment related to high technology.”
Many companies in the hosted CRM arena either went bust or were acquired when the dot-com bubble burst. So according to a blog post by Denis Pombriant of Beagle Research Group, it’s important to look at what Salesforce did right.
For starters, it’s important to remember what a compelling prospect Salesforce was when it launched. Sales personnel all over the world wondered that they could access their sales management and CRM systems from anywhere there was an Internet connection. While it seems like old hat today, it wasn’t back in 1999.
“Today Salesforce looks like a no-brainer but fifteen years ago it was anything but,” writes Pombriant. “It was going up against some Goliaths with a stripped down product in a market where its only innovation was not the product itself but its delivery and business models. If it or any other SaaS (News - Alert) company was going to survive it would have to steal market share from Goliath. Not a pretty picture but the stuff of corporate lore and mythology.”
But you can’t rest on your startup laurels forever, so how has Salesforce been so successful in the intervening years even after the novelty value wore off and the marketplace became crowded? Pombriant lays much of the credit at the feet of the company’s unusual and philanthropic chairman, Marc Benioff (News - Alert).
“It is my firm belief that absent Benioff’s genius for promotion and an iron willed determination to sculpt the future of enterprise computing, Salesforce today would be just more road kill on the (metaphorical) side of Route 101,” Pombriant wrote, noting that Salesforce made storing data in the cloud “not scary but sexy,” and not allowing the big kid at the time, Siebel, take Salesforce’s lunch money.
Wise reinventions and the introduction of new services such as workflow automation have kept the company relevant and a force to be reckoned with in the cloud-based CRM marketplace. Even today, 15 years later, the rest of the hosted CRM market is still chasing Salesforce’s tail.
Edited by Cassandra Tucker