Salesforce highlighted for me this report which says “by 2018, Salesforce and its ecosystem of customer and partners will create 1 million jobs and generate $272 billion in GDP impact worldwide.”
My initial reaction was “Uh-oh” about the $272 billion. That’s about the size of SAP Nation. Is the Salesforce economy just as wasteful with items like $ 6 billion a year in consultant travel , and have as many massive failures, as my books have cataloged?
It is not, and the IDC report it quoted from assumed a four year horizon. Also, its systems integration partners mostly make money from implementations not from the long tail of post live hosting, upgrade and application management revenues which SaaS vendors (mostly) provide themselves.
Still it led me to a few questions I hope Salesforce starts to focus on
a) Where’s’ the payback from the ecosystem?
Vendors like to talk about how many jobs their ecosystems create, but neglect to focus on the cost burden on customers. It would be nice for Salesforce to highlight payback customers have seen attributable to the “tax” for the use of the partners and technologies (see infograph below)
b) Why are more on-premise customers not leveraging the ecosystem?
In my interviews with SAP customers (and many other on-premise ones) I often hear that they cannot find broad functionality in the cloud. They tell me they can find plenty of core accounting, SFA, HR capabilities but vast swaths of vertical and even horizontal coverage are still missing. I wonder if Salesforce needs to make the AppExchange easier to navigate, and to also more aggressively recruit more application partners to attract tens of thousands of on-premise customers who are sitting on the sidelines.
c) Where are the metrics for the ecosystem?
Salesforce has led the software industry in sharing uptime and other metrics. It should do the same with its SI partners – metrics on timeliness and budgets, T&E as percent of fees etc. As I wrote earlier about the larger SIs Salesforce is increasingly attracting: “Salesforce says it is being helped by customers who are much savvier now. That certainly helps but readjusting the mindset of millions of on-premise “citizens” (2 million just in SAP Nation) will take plenty of cat-herding and automation.”
Congrats to Salesforce for building out a vibrant ecosystem. Just as they rethought the core enterprise application concept, I hope their ecosystem blazes a new path, different from those around on-premise incumbents.
