The Cloudforce Social Enterprise Tour landed in London last week, and was an instant success with more than 14.000 registrants. An impressive number for a company that has only been active in Europe for 10 years. The following details were shared and give a ball park of Salesforce.com’s European activity:
- Salesforce.com is recruiting for 750 people in EMEA for the next 18 months to come.
- Salesforce.com has over 20.000 customers live in EMEA.
- Salesforce.com EMEA region continues to account for 18% of the revenues.
- Salesforce.com has 145 apps developed by European partners on its AppExchange marketplace
- This number represents 10 % of total apps available
- This number represents a 300% growth compared to last year
- Salesforce.com aims to double its growth (European apps) this year; a good start was made with 39 new ISV recruits in Q1 2013.
- Salesforce.com royalty revenue from ISVs grew 664% compared to last year (EMEA)
- Salesforce.com strongly emphasized that it is going after 4 key markets in Europe; the UK, France, Germany and the Netherlands.
- Salesforce.com EMEA revenues for the year 2012 (FY ending Jan 31) were $408.5 million.
So, will they rock the boat in the Netherlands?
Salesforce.com products are neat. The online demo’s always work. Features and functionality will not be the issue. They have conquered the SMB market, and are moving up scale. The METISfiles recently analyzed the total addressable market (TAM) for SaaS CRM in The Netherlands. We analyzed the pricing and offerings of nine SaaS CRM vendors and we sized the number of sales & marketing professionals and segment in company size and vertical market. From that analysis it is clear that the biggest SaaS CRM opportunity is in the large enterprise segment and in the business services market.
According to research done by Heliview, Salesforce.com has a 5.5% share in the general CRM market in the large enterprise segment. In the SMB market (50-200 employees) they have a 2% share, and SOHO market (1-20 employees) they have 6.6% share.
To seriously compete with established non-SaaS based CRM vendors Salesforce.com will need to grow its footprint in the large enterprise segment. In order to that salesfore.com needs to attract skilled personnel and capable partners.
Personnel
At the moment Salesforce.com is capacity restraint not opportunity restraint. Salesforce.com was pro-actively recruiting during its Cloudforce event, but the Dutch site still only has a meagre 5 vacancies on it (10 in the UK, 9 in France and 6 in Germany). That still is a far cry from 750 vacancies in Europe they are looking to fill. Despite difficult market conditions though, challenges in the recruitment area can be overcome. The company’s social commitment appeals to generation Y. In addition, the company is growing fast and has that positive energy level associated with start-up companies. For the established CRM giants like Microsoft, SAP and Oracle it will be hard to compete for talent with companies like Salesforce.com. But Salesforce.com needs to step up its recruitment effort – yesterday.
Partners
Finding the right system integration and consulting partners will prove to be more challenging. In this area, Salesforce.com may find it difficult to compete with the likes of SAP, Oracle and Microsoft. These vendors have a large installed base, who will be biased to wait for mobile, cloud or SaaS based CRM solutions from their preferred vendor.
From a partner perspective, the system integration partner community has significant investments in trained consultants and expertise centres for Microsoft, SAP, and Oracle. A partner can only invest its training and certification dollar once. In economic tough times for the services market , system integrators are more likely to go for a safe bet.
The Salesforce.com services ecosystem however shows tremendous opportunity. And partners recognize this opportunity as well. Accenture recently announced it will open an innovation center in the UK, a clear sign of confidence in the Salesforce.com opportunity (Accenture reports worldwide growth of 399% in SaaS revenues, of which it says Salesforce.com represents the largest opportunity). Salesforce.com’s opportunity stretches across various segments in the global social enterprise, among which:
- Collaboration – Salesforce Chatter: Private Social Network
- HR/Work – Salesforce Rypple: social performance Management
- Extend – Salesforce Force.com: cloud platform
- Sell – Sales Cloud: a sales app
- Service – Service Cloud, customer service for the social enterprise
- Market – Marketing Cloud, marketing on all social levels.
Further evidence of confidence was communicated at Cloudforce 2012 London, were we spoke to several partners on the floor, among which platinum sponsors Accenture, Deloitte and Logica. Each of the partners stated they have approximately 40 people trained and certified on Salesforce.com in the UK, and planning to grow. Though these numbers may still be limited compared to SAP, Oracle and Microsoft, there is a clear commitment and willingness to invest in Salesforce.com.
Outlook
There are close to 600 thousand sales and marketing roles in the Netherlands today. If every role would have a SaaS CRM subscription the total opportunity for SaaS CRM would be €300 million per year. Salesforce.com will take a large part of that market.
Salesforce.com spends a lot of time building and addressing the additional revenue opportunity for its partners. During DreamForce last year they announced a $50 million investment for the system integrator community. It was also announced that Salesforce.com will be looking for 700 new partners in Europe. From charts we have seen during Cloudforce London it is clear that the number of salesforce.com certified professionals is growing very fast.
It is also clear though that from a partner perspective, Salesforce.com is still trying to find the right partner message in Europe. The opportunity is available, the partner program is in place, and Salesforce.com now needs to find, sign and grow its European and local partnerships with system integrators and consultants that can get them into the large enterprise deals.
