Is Salesforce’s Marc Benioff becoming the new Sir Bob Geldof

March 27, 2012 Richard Boardman

There seem to be a number of interesting themes emanating from Salesforce.com’s San Francisco Cloudforce event earlier this month.

The announcement of Site.com, a cloud based content management system, and Salesforce Rypple, a Salesforce and Chatter integrated version of its December acquisition, which provides a social approach to employee evaluation, signals that Salesforce.com has significant plans outside of its core CRM market.

This isn’t disconnected diversification. Its foundation is another key Cloudforce theme: the ‘Social Enterprise’, which builds on the success that Salesforce has had with its ‘Facebook for the enterprise’ application, Chatter, and takes it beyond its traditional CRM roots into other areas of the organisation. By pioneering the use of social tools like Chatter it can piggy-back these to penetrate a whole range of new business areas.

But it’s not just the ‘social’ in ‘Social Enterprise’ that’s important; ‘enterprise’ clearly has significance in its own right. While Salesforce’s initial successes may have been with small and mid-sized businesses, the company has for some while been successful in challenging the likes of SAP and Oracle in the market for enterprise systems. Judging by the range of high profile companies that presented alongside Marc Benioff, large enterprises are becoming a more important focus.

Perhaps surprisingly though, it wasn’t the CEO’s of the likes of HP, Toyota and Kimberly-Clark that presented; it was the CIO’s, CTO’s and the like. There’s a delicious irony that their strategy now involves the embrace of the IT department – given that so much of Salesforce’s success has come as a result of enabling a generation of sales and marketing managers to use their software as a service model to bypass them.

Finally, the tone seems to be different. Less combative, more part of the establishment. The rapprochement with the IT department, the partnership with Infor (an ERP vendor who might be considered the antithesis of all that Salesforce holds dear) and seeming acceptance that Salesforce will need to successfully coexist with other major back-end systems providers like SAP, has the feel of the punk rocker that evolves into a pillar of the community – think Bob Geldof, one time Boomtown Rat, now knight of the realm.

Whether its dominant position in cloud and social are sufficient to significantly extend its reach in the enterprise only time will tell, but given their mastery of both strategy and execution – witness the speed in acquiring, integrating and reframing Rypple and Assistly – you’d be bold to bet against them.

Assuming we’re not reading too much into Cloudforce, and this is a major strategic shift, then Salesforce’s challenge will be to hang on to the CRM business in the process. If Salesforce becomes too enterprise, or its offerings too diverse, then, given that it’s impossible to be all things to all people, its appeal, particularly to small and mid-sized businesses, could rapidly fall away.

This may well open the way for new competitors. If you’d asked me a year ago, I’d have said Salesforce and Microsoft had the CRM mid-market largely locked up. Now I’m not so sure. The launch of Dynamics CRM 2011 seemed to signal a full-on Microsoft assault on the market, but this hasn’t fully materialised, and if Salesforce shifts its focus, then there’s an opportunity for new or existing players to start to fill the void. When the wild child rocker becomes part of the mainstream, the stage is set for a new generation to arrive.