An Independent CRM Evaluation and Analysis of Salesforce Strengths and Weaknesses
Salesforce is both the pioneer and poster child for the cloud CRM movement. Since its humble beginnings from a small San Francisco apartment, the company that was born from the cloud, and later reborn social, has become the category leader that other on-demand CRM software manufacturers seek to challenge. Because of its current size, it no longer leads the industry in terms of revenue growth, however, in absolute terms of cloud CRM revenues, customer acquisitions and user subscriptions the company is the market share leader.
In a competitive cloud CRM software market, here are advantages and disadvantages that separate Salesforce from the rest of the pack.
- The company is the clear market share leader and increasing its leadership distance over the rest of the pack.
- Salesforce is a proven disrupter and innovator. These strengths separate the company from most of its competition and provide increased payback for its customers.
- The company's CRM software functionality is not materially different than other cloud CRM solutions. In fact, in many areas it has fewer feature sets than competitors. However, what makes this CRM software competitive and gives it differentiation in a crowded marketplace is its simple and rewarding user experience. The application user interface is simple, intuitive and leverages consumer technologies. This is an innovative application designed to satisfy users, and not IT or data management objectives. Several CRM software competitors are steadily copying or even improving up the Salesforce.com user experience in their own CRM systems, however, few have surpassed the original.
- The company promotes an active user community. Salesforce.com uses its Ideas application to solicit community input, actively monitor social networks and provide online venues for customers to make themselves heard. Too often CRM vendors do not actually practice the Customer Relationship Management they espouse in their marketing literature, however, Salesforce clearly walks the walk.
- The Salesforce user interface maximizes consumer technologies to deliver a simple and rewarding user experience. This has delivered a profound effect in achieving user adoption.
- The company's combination of Force.com, Platform as a Service (PaaS) tools, Salesforce1 and AppExchange show technology leadership in areas such as integration, customization, third party extensibility and ecosystem.
- Salesforce's growth continues to impress. In addition to several years consecutive revenue growth, the company has also achieved declining customer attrition rates in large part by achieving increased CRM software utilization and greater customization using the Salesforce1 platform.
- As Salesforce continues its transition from a cloud CRM software company to a cloud platform company, many CRM competitors have surpassed Salesforce.com’s CRM functions, features and capabilities.
- Unlike top competitors such as Oracle, Microsoft Dynamics CRM, SAP CRM, SugarCRM and others that offer choice in delivery (be it on-demand, on-premise or a hybrid combination) and choice in cloud platform (be it a proprietary vendor cloud, private cloud or public cloud), Salesforce does not support public clouds (such as Amazon EC2, IBM, Microsoft Azure or Rackspace.) This limits customer hosting options, prevents portability, threatens IT investment and increases exit costs. For example, Salesforce customers who choose to extend their CRM software with custom development created with Salesforce tools (Force.com or Salesforce1) and which only operate on Salesforce's cloud will likely not be able to transfer and protect that investment if they ever choose to leave Salesforce.
- The Salesforce customer base is predominantly Business to Business (B2B). The CRM application is not as well oriented to the Business to Consumer (B2C) industry.
- Salesforce is also without reasonable business intelligence solutions. Customers looking for data warehousing, data mining, online analytical processing (OLAP) or predictive analytics will need to look at third party solutions from AppExchange or elsewhere. The company is making some progress with its Wave analytics, but this solution is underwhelming.
- Small business customers repeatedly opine that professional services options are few and extremely costly. For small businesses that need CRM customization, system integration or other professional services, the lack of channel options, combined with the lack of desire for smaller projects by the few partners available, leave this market segment without many good options.
- When reviewing features to features its becomes apparent that Salesforce is the highest priced CRM software product in the cloud CRM industry.
- Salesforce becomes less competitive when looking beyond CRM as a point solution. For CRM buyers seeking broader business software suites, such as back office ERP systems or HCM applications, the inconsistency and relatively shallow integrations delivered with most third party AppExchange vendors do not compare well to single vendor cloud solutions from competitors such as Microsoft Dynamics, NetSuite, Sage and SAP Business ByDesign.
- Salesforce operates fewer global data centers than many of its cloud competitors. This can impact system performance (latency, hops, jitter, etc.) and pose regulatory concerns with regard to data privacy and regulatory compliance. This may make Salesforce less appealing for customers further away from the U.S.
- Ironically, the CRM leader does not generally provide a Service Level Agreement (SLA). Getting an SLA requires a customer request and negotiation. Even then, SLAs are inconsistent across the customer base and fall below the uptime guarantees and financial remuneration of most other cloud CRM vendors.
Salesforce.com Fit and Alternatives
The Salesforce Sweet Spot
Short list this solution when:
- You desire a best of breed or CRM-only solution.
- You want a CRM solution with tightly integrated social CRM tools.
- Your company focus is SFA, your requirements are not difficult and you want a fast time to market.
- You are a brand buyer with uncomplicated requirements and no special considerations.
- Your company is in one of Salesforce's targeted industries, including communications, financial services, healthcare, high tech, manufacturing, media, non-profit, government and retail.
CRM software buyers may be best advised to consider other CRM products when:
- Sales staff need to create quotes, take sales orders and have access to inventory information.
- IT or management desire multiple deployment options, including cloud, on-premise or hybrid.
- You want an enterprise-wide, fully integrated business software (i.e. ERP and CRM) cloud application.
- You are a non-U.S. company with regulatory or cultural requirements which advocate data residing in an in-country data center. This may apply to European companies in the financial services, health care and government sectors.
- You want an industry specific solution with single-vendor accountability.
- Your top decision criteria include acquisition cost and total cost of ownership (TCO).
Salesforce is an innovator—a key strength that sets the company apart from most of its competition. The company was the first to inject consumer technologies into business applications—and continues to do this faster than most of their competitors. The company has accelerated the pace of platform as a service (PaaS), mobile CRM, social CRM, digital marketing and more, and shows no signs of slowing their creativity and momentum. In fact, Salesforce must continue to out-innovate its competitors not just for product superiority designed to attract market share, but to stave off the inevitable downward pricing pressures that are otherwise unavoidable as cloud CRM software becomes more commoditized. The online CRM software market is now plentiful with credible competitors, so Salesforce's innovation is far more about holding off price erosion than technology advancement.
Salesforce's core competencies are disruption, innovation, evangelism and marketing prowess. A powerful combination that can blind side the largest of competitors, create new category leadership and earn significant market share. However, in many ways, the company's future is less predictable now than when run from the bedrooms of a small San Francisco apartment well over a decade ago.
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Salesforce's core competencies are disruption, innovation, evangelism and marketing prowess. A powerful combination that can blind side the largest of competitors and create new category leadership.