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At this year’s Dreamforce more than 140,000 people gathered in San Francisco to share the excitement about the use of technology for business. Salesforce.com’s annual conference has reached megashow status, which is a mixed blessing: Dreamforce remains social in its design, but it has become impersonal due to its size. In any case Salesforce had plenty to show off. The company has continued to enhance its cloud-based business applications for sales and customer service, and in the last year it has added marketing through acquisitions. It also has advanced the attraction of its cloud computing platform; even IT departments see its approach as a simple way to use and build applications, especially mobile ones which the ubiquity of smartphones and tablets have made critical to business. Cloud computing is becoming the defacto approach for new applications and software for business and now IT, and its importance continues to grow: Our benchmark research on business technology innovation shows that it is important or very important to more than half (57%) of organizations. At Dreamforce, Salesforce announced Salesforce1 Lightning (available in 2015), a way to assemble mobile applications that can operate across platforms. Salesforce makes the technical details of the mobile platform transparent and facilitates assembly of mobile applications.
Probably the largest announcement was of Wave technology, that is part of the Salesforce Analytics Cloud, which originated in its acquisition of EdgeSpring in 2013. It fills one of the holes in Salesforce’s product portfolio. For years the company has tried to provide in its SFA product reports and dashboards but has not been able to keep pace with the technological advances in analytics. Wave uses analytics to create metrics in dashboards that are easy to use and interact with on the Web and through mobile devices. Initially Salesforce will support the Apple iPhone and iPad, with Android to come later in 2015.
To address the potential weakness of not supporting data outside of its own applications, Salesforce pitched its partnerships with Dell Boomi, Informatica, MuleSoft and Talend that we cover in our research, all of which help move data from other systems and applications in the cloud and on-premises. Other partners like SnapLogic who have taken a pure cloud computing approach were not referenced but can play a critical role in supporting Salesforce Analytics Cloud. This collaboration will make Salesforce analytics more robust and able to access data anywhere including the Internet. This focus on integration is critical because in the past Salesforce has left it to partners while taking the position that customers should make Salesforce their operating environment. But the next generation of analytics requires access to big data, which is becoming widely dispersed and should be integrated to derive full value from investments; Salesforce has not referenced this need in any substantive manner, but it ought to be more inclusive of other big data technologies. Our research in big data analytics finds that half of organizations are already engaged into this activity.
At the conference Salesforce executives emphasized that its differentiator is its platform and its own database technology powering its analytics. I am not as convinced and because none of the current analytics and BI partners are operating on its platform, this claim from my analysis is more hopeful marketing than reality. The push to position its platform as the differentiator is meant to support Salesforce’s effort to be seen as a key provider and to deflect notice of any tool limitations in the first release of Wave. I do not see the latter as an issue as it has many positives that are more important to business users than the platform. The first is the user experience of interactions with the dashboards and the elegant presentation of charts that materialize in a wavelike manner. Having differentiation in the usability of its products is a strong position; that is the top software evaluation criteria for organizations today according to all of our benchmark research.
Another potential differentiator for Wave is its interoperability across mobile devices. As noted Salesforce initially is focused on Apple but will expand to Android and hopefully to Microsoft Windows Phone and the Surface tablet, which slowly are gaining adoption as organizations update from legacy notebooks running older versions of Windows. Salesforce has designed the native mobile user experience to adapt to the design of devices so users do not have to resize windows; it also is good at displaying the context and attributes of what is being shown. It also enables synchronization across devices to enable collaboration for coaching and interacting within the organization. Its annotation capabilities help supply context on issues or opportunities that can be shared by users. Our latest Value Index on mobile BI providers found many analytics and BI providers have lagged in full support of mobile platforms, often just publishing to Web browsers or just supporting Apple, which is ineffective in business and frustrating to users. In our next-generation business intelligence research usability is an important purchase consideration for the most (63%) organizations. Mobility is essential to the future of analytics, and Salesforce is smart to emphasize its work in this area to support analytics along with the rest of its applications.
With Wave Salesforce is not disrupting the analytics market but moving into the existing market of providers in the cloud. Some have offerings across the lines of business while others specialize in areas such as sales analytics. Many of these other providers are current partners of Salesforce including Birst, Domo, GoodData, MicroStrategy, Qlik and Tableau Software; they are now direct competitors that focus on the same audience of buyers and users in the lines of business. While Salesforce and its partners tried to downplay the competition, this is just deflecting from the reality of the situation. I predict that these partners will see that Salesforce will make it harder to close deals as they have in the past with customers in the lines of business, which have been the major growth area for analytics deployments featuring dashboards and visualization. On the other hand, partners like FinancialForce.com and others that use Force.com as their application platform will find Wave can improve the robustness of their applications through embedded analytics.
The Analytics Cloud should help Salesforce in customer service and marketing, for which until now it did not offer analytics or access to metrics. It will especially help in sales force automation, whose existing dashboards and reports are more than challenging to use. Potential customers will have to decide how important it is to have state-of-the-art dashboards. For reporting Salesforce Analytics Cloud is not going to solve the needs of organizations as it is limited in tabular presentation and formatting of data that most know and use in reporting, and anyway reporting is free in its existing Salesforce Sales Cloud. Merely addressing the need of sales organizations for dashboards and reviewing information on past performance is not certain to meet other needs to manage and plan quotas, territories and compensation, forecasting, quota and other areas for which it is not designed. Salesforce has its Analytics Cloud Excel Connector to provide any flexibility and address limitations in its current product through providing access from spreadsheets. There is a need for this, as the majority (59%) of organizations in our research on sales forecasting said that spreadsheets undermine efficiency.
Salesforce1 Lightning will exploit further the potential of assembling custom applications that use components of Salesforce Analytics Cloud. Helping organizations and partners build analytic apps is likely to be significant for the company’s future. Salesforce wisely is encouraging people to work with it as doing so quickly demonstrates its differentiation in the user experience and mobile support, and I spent some time at Dreamforce reviewing Wave and trying it on my mobile device. Salesforce also made sure its roadmap in 2015 was open to everyone at Dreamforce. Its plans include support for mapping as visualization or storytelling; the ability to record and play back so others can see and learn; Android support, real-time collaboration and offline support. What was not clear was the roadmap to improve or replace dashboards that are currently part of its Sales Cloud offering that are less than intuitive for sales but are used by many organizations. Salesforce is not being secretive like many vendors; being late to enter the analytics market, it has to build trust and confidence in its customers.
As well as its pluses, Salesforce Analytics Cloud has negatives that will prevent it from being the only tool needed for analytics; again, it is designed for assembling and deploying dashboards and has elegant selection methods. Analysts and operations personnel who perform data discovery and exploration and want forward-looking forecasting and planning or predictive analytics will need a separate tool. Therefore organizations will have to budget their allocations for the needs of various roles. Salesforce has set a premium price for Wave: $125 per user per month for those that consume and interact with it and $250 per user per month for the analyst and administrator license. Salesforce is likely to gain adoption among Global 2000 customers that can afford the price point, but small and midsize organizations will find it challenging: The price is twice as expensive as Salesforce’s basic SFA offering, which is $65 per user per month. Comparatively its major applications competitor Oracle embeds the price of analytics in its Sales Cloud at $100 per user per month. Salesforce’s analytics and SFA combined will cost at least $190 per user per month. Whether it is worth this steep price will require a thorough assessment by organizations that do not have unlimited budgets for technology.
Salesforce Analytics Cloud is a good first step that will enable Salesforce to be taken seriously as an analytics provider. Our research finds that analytics is the top technology innovation priority, called important by 39 percent of organizations. Salesforce Analytics Cloud will gain attention for its sophisticated dashboards, but it is likely to complement established analytics products rather than replace them. Potential users excited by the new product and its engaging marketing should keep this context in mind. This reminds me of the advent of sales force automation, which helps in automating the recording and review of accounts, contacts and opportunities during the sales process but does not automate or manage the sales force itself. Many sales executives excited about SFA did not allocate sufficient budget and resources to applications that focus on other essential aspects of sales, such as managing coaching, compensation, quotas and territories. Organizations looking for interactive dashboards should examine Salesforce Analytics Cloud closely. While the price is high, it could eliminate the pain of using less intuitive approaches. Organizations also can examine alternatives from partners that are integrated with Salesforce today and are less expensive to deploy and use.
Organizations using Salesforce applications for sales, marketing or customer service should evaluate Salesforce Analytics Cloud. Its elegance and interactivity in dashboards for both the Web and mobile devices are ahead of many competitors. Its sophisticated dashboards will attract organizations that want to present metrics more intuitively to business professionals. They should balance the price against the capabilities and determine whether to take this step toward being an analytics-driven organization. Salesforce Wave will impact the analytics market now and in the future, changing what businesses will expect from providers.
CEO and Chief Research Officer
At its Oracle OpenWorld the multibillion technology provider showcased the breadth and depth of its cloud computing applications and platform. Chairman Larry Ellison proclaimed it the only unified and open approach in the industry. He criticized other large application vendors that use multiple platforms to support their applications, use a proprietary layer that is not fully extensible, provide only a portion of applications needed to run the business or run on Oracle’s database technology. These technical merits may not be relevant to the decision-making processes of business but can be critical for CIO and IT. But the strength of the Oracle Cloud Computing portfolio, which includes infrastructure, platform, tools and applications, is so impressive that our firm awarded Oracle the Technology Innovation Award in Cloud Computing for 2014. This builds from my analysis earlier in the year on the overall efforts of Oracle for cloud computing.
Oracle’s cloud application portfolio spans many areas of business, including human capital management, which my colleague Stephan Millard has analyzed. Its sales application portfolio also has reached a high level of maturity. Its efforts for sales organizations go beyond sales force automation (SFA) for sales reps and managers to other applications for those roles and sales operations and executives as well. In the years since its acquisition of Siebel Systems, Oracle’s position in this market slipped as nemesis salesforce.com became a major player. Now it not only has climbed back into a competitive position but has a more complete sales portfolio than salesforce at a more affordable price.
At Oracle OpenWorld it announced highlights of its advancements in sales. Oracle Sales Cloud version 9 advances sales force automation, partner relationship management and sales performance management along with adding support for mobile and social collaboration technology and sales analytics for roles from executives to front-line sales teams. The greatest changes as I see it are in the sophistication and usability of the sales applications and the embedding of analytics and collaboration that make them faster and easier to use. Oracle has ensured that the new versions are backward-compatible with previous iterations and integrated them with on-premises legacy systems such as Siebel and its own Oracle E-Business Suite to help customers that have mixed environments operate now and will migrate in the future.
Oracle has redesigned its approach to sales to focus on productivity enhancements in tasks related to meeting customers and updating information in more user-centric ways than most SFA systems have. For example, a new mobile application yet to be released, Oracle Sales Cloud Call Report App, enables smartphone users to review and update sales opportunities quickly and easily and to immediately see the impact of changes to forecasts and quotas. In a second area, collaborative selling, Oracle Sales Cloud Mobile is easy to use on smartphones and tablets, but still could improve in being more task and workflow based and be more optimized for touch gestures. In another area, however, Oracle has advanced beyond others: Oracle Voice users can interact verbally with the application to engage in sales at any time and place, even while driving. To reach this unique position Oracle partners with Nuance, as was announced earlier this year. It works on Apple iOS platform to enable a range of tasks to be conducted through voice operations.
Oracle knows that sales prospecting requires robust information that often exists outside the enterprise and across the Internet. To make it easier to get data from partners such as Dun & Bradstreet, the company announced Oracle Data as a Service (DaaS) for Sales, which enriches data with more than 150 attributes about organizations and 100 attributes about individuals. This product takes advantage of Oracle’s acquisition of BlueKai, which provides a marketplace for organizations to share and license data for use within their business. Oracle Data as a Service is a significant component of Oracle’s cloud computing platform and will be valuable for sales organizations.
In recent years sales organizations have become able to automate configuring products and quoting prices by adopting configure price quote (CPQ) software and integrating it with SFA to support interactions with customer prospects. Oracle’s acquisition of Big Machines complements the Oracle Sales Cloud by eliminating the need for a separate application that might not be integrated into the sales process. The company does market Oracle CPQ Cloud as a separate offering, but it is clearly part of the sales portfolio. The next step for Oracle in this area should be to enhance its portfolio for contract automation, which is a challenge that causes sales people and operations to spend significant time in creating a process and workflow of documents that legally define purchases, deliveries and invoicing.
Another key component is Oracle Sales Cloud Sales Performance Management. It uses analytics to manage and improve sales performance with applications designed for coaching and territory optimization. It also has a new mobile application for monitoring sales contests among teams in which progress toward quotas and goals can easily be seen and reviewed. Our firm takes a broad view of sales performance management to include operations, tasks and all sales processes; Oracle’s application is limited to gaining knowledge from analytics on sales activities. For other users seeking to manage sales compensation in general and the unique elements of incentive compensation the vendor has advanced from Oracle E-Business Suite Talent Management to Oracle Workforce Rewards, which includes compensation, benefits and payroll management as part of the Oracle Human Capital Management Cloud. Our benchmark research finds that the process of sales compensation continues to be an issue for almost two-thirds (65%) of organizations; it affects sales operations and executives along with individual sales reps, and for many it is a priority to improve.
Oracle has also expanded its analytics offerings for business. A relevant one here is Oracle Transactional BI Enterprise (OTBIE) for CRM, which provides a portfolio of analytics for forecasts, the pipeline and accounts and helps users understand past performance and predict the future. Analytics of the sales forecast and pipeline is another priority for sales; our research shows that scattered and inconsistent information are the top two impediments that drive about half of organizations to invest further in sales management systems. Oracle’s analytics build on its experience in providing operational reporting capabilities in Oracle Transactional BI Standard, which can present a range of metrics for insights on activities. New advances in sales analytics are evident in Oracle Mobilytics, which provides a sophisticated view of sales activities that can become interactive through visualization. There is also Oracle Sales Cloud Sales Predictor, which helps guide sales people on which products are most likely to be purchased. Overall Oracle has advanced the analytics in its cloud platform significantly this year. Recently it announced Oracle Analytics Cloud, which enhances its tools and the ability to access and embed them in Oracle applications.
As Oracle continues to advance its Sales Cloud, the products are less of a challenge than recognition of the company by customers as a leader in these sales applications. To be competitive in the market will require further investments in marketing and sales to gain momentum and customer adoption but also to continue to expanding the application portfolio. For the Sales Cloud Oracle currently charges $100 per user per month and considering the breadth of applications and analytics, this could be seen as very competitive; salesforce.com starts at $65 per user per month for the basic SFA, but the recently announced Salesforce Analytics Cloud will cost $125 per user per month of which both are significantly more costly. Others major application providers like SAP are also advancing similarly to Oracle for SFA and sales performance management but still have not been able to fulfill on the larger portfolio of application needs for sales operations and executives.
Oracle is a serious player in the market for sales applications and very price advantageous and innovative in its portfolio; we advise organizations to evaluate the company as one of the few that offers more than just SFA and operates in the cloud and mobile technology environment. If you are looking for an integrated suite of sales applications that can help everyone involved in sales, Oracle should be on your list for optimizing operations and maximizing sales performance.
CEO and Chief Research Officer,