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Enterprise adolescent: Salesforce.com's struggles at 15

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Big data, big problem

In the age of big data that seems like a startling oversight. “There’s a lot of companies going at this space and we’re going to be taking a shot at it ourselves,” Harris said. “I think we have a good strategy: we’ll start with CRM data, give our customers great solutions to deal with that, and then start to combine it with other data sources.”

“I couldn’t be more excited [about this]. I just can’t talk about it a lot right now,” he added - but if Harris was circumspect about new developments from the company in terms of analytics, the Salesforce1 analytics function gap was openly discussed by analysts at the November conference, including Ray Wang of Constellation Research.

“Constellation believes the big data and analytics opportunity is critical to enhancing customer experiences, to benchmarking and brokering data services and to building new business models around big data and analytics,” Wang wrote.

“Customers should encourage Salesforce.com to consider how to enable big data models in digital business in the next iteration.”

Four months on, though, there has been no major announcement on a strategy for advanced analytics. So now, it looks like Salesforce.com needs to fight a big data battle on two fronts - both internally and in its product portfolio. And the big question is: how will its executives find the time?

They’re busy people, after all. In the fourth quarter of 2014, the company signed more than 200 seven-figure deals and more than ten eight-figure deals. On the company’s fiscal 2014 conference call in late February, chief executive Marc Benioff told financial analysts that he expects to top the $5bn run rate “any minute”.

Earlier this week, Salesforce announced plans to add 500 more jobs in Europe and three new data centres in the UK, France and Germany. The company’s phenomenal growth is impossible to dispute.

But despite revenues that grew 33 per cent over the year to reach $4.07bn, investors are increasingly twitchy about the company’s lack of profitability. Full-year losses were down to $232m in 2014, from $270m a year earlier. It’s a step in the right direction, but only a step. Investors tend to remain fairly sanguine about smaller, fast-growth companies carving a niche in a market laden with new opportunities, but prefer to see better returns on spend from multi-billion companies that already lead their market sector.

Some believe this year could see the 15-year-old company embark on arguably its biggest challenge yet: to establish itself as a provider of cloud-based enterprise resource planning [ERP], going beyond “just” a CRM company.

That prediction comes from Jillian Mirandi at Technology Business Research, who believes that cloud ERP is “a massive opportunity for Salesforce.com, as there are few enterprise-grade, cloud-based solutions gaining traction.”

But ERP, as she points out, is far more complex than CRM - and while many customers are happy to put CRM in the cloud, they’ve so far been markedly reluctant to do so for ERP.

Salesforce.com’s cloud ERP ambitions are likely to focus on FinancialForce.com, a cloud ERP vendor natively built on Salesforce.com’s Force application development and run-time platform, and funded by a joint investment by Salesforce.com and Unit 4.

Earlier deals, Mirandi notes, have taken the company some way down the path to offering customers wider functionality. The 2011 acquisition of Rypple, for example, introduced HR applications that were later rebranded as Work.com. In the main, however, those apps have been used predominantly for the management of sales teams, rather than more general workforces.

And either way, cloud ERP is a move that will consume a great deal of energy at the company, not to mention a strategy that rivals such as SAP and NetSuite will strongly resist.

It's 15th birthday is a serious time for Salesforce. Still in its adolescent phase, the SaaS cloud provider must grow up internally while also thinking seriously about its Act II and where it’ll be in the next 15 years. ®

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