Software // Enterprise Applications
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12/3/2013
10:16 AM
Doug Henschen
Doug Henschen
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Does Salesforce.com Have An Analytics Gap?

Salesforce.com spent $2.5 billion to buy ExactTarget to strengthen its analytics capabilities, so don't expect it to do another pricey acquisition.

Is Salesforce.com doing enough to meet the analytics needs of its customers? It's a question that came up not once but twice in Q&A sessions with company executives at last month's Dreamforce conference.

The response offered by CEO Marc Benioff and executive VP of products Kendall Collins was that Salesforce is doing plenty to meet the demand.

"We're a massive analytics provider through millions of millions of dashboards that are being generated by all of our customers," said Benioff. "Reports are going out and we're providing a huge amount of decision support."

Salesforce is absolutely pursuing deeper analytics where it's sales, service, and marketing applications are concerned. Benioff pointed to deep marketing campaign analytics offered by ExactTarget, the marketing automation and campaign management firm Salesforce acquired for a whopping $2.5 billion in June. And then there are the platform-level capabilities, such as APIs used by AppExchange partners including Birst, Good Data, and others, to provide deeper-level BI and analytics. (The AppExchange "Analytics" catalog currently lists 33 options built on Force.com.)

[Want more on Dreamforce announcements? Read Salesforce.com's Salesforce1 Platform: A Closer Look.]

Drawing a line, Benioff said Salesforce does not intent to move into the "traditional, horizontal analytics market," where he lumped data warehousing vendors and the likes of SAP BusinessObjects, IBM Cognos, Oracle Hyperion, and other "broad based solutions."

"It's not that we're not interested in that area -- it could be a future opportunity," he said. "But it's not where we are today."

Highlighting the mobile-focused Salesforce1 platform announcement, executive VP Collins noted that the many sales, service, and marketing dashboards served up by Salesforce and ExactTarget will now be accessible "on all devices and form factors, right out of the box." He also hinted at deeper drill-down reporting and announcements yet to come.

The "stay tuned" hint may have been a reference to the "Predictive Intelligence" capability introduced the following day at Dreamforce as part of the Salesforce1 Service Cloud upgrade. This capability recognizes common service questions or complaints by analyzing similar cases. It's said to predict automatically the right response and the right experts that service reps should rely on to help customers.

In another predictive advance, the Salesforce1 Sales Cloud upgrade introduced at Dreamforce adds core capabilities from Pardot, the marketing automation company acquired in 2012 by ExactTarget. Pardot used to be just another one of those dozens of AppExchange analytics partners, but now its capabilities, including predictive lead scoring and lead nurturing, are built into the Sales Cloud.

Does all this still leave room for deeper capabilities? Predictive marketing applications firm Lattice says yes. Where Salesforce looks at data within its own sphere, Lattice says one of its differentiators is tapping into transactional systems and external data sources to help predict next customers, next good leads, and next customers likely to churn. Transactional systems like ERP bring purchase information, while external sources add data points, such as credit scores, and in the B2B context insight on hiring trends at companies as indicated by LinkedIn activity.

"In a large enterprise, a salesperson may have a customer that's in 50 different locations that has 25 different touch points captured within the Salesforce database," said Eric Berridge, CEO of Salesforce integrator Bluewolf, in an interview with InformationWeek. "What predictive analytics can start to do is analysis on customers that are ready to attrite, or that need more resources, or that don't have one of your products that might be a good fit. It will point your sales organization or your service organization at the customers who need attention."

There will always be more that Salesforce.com could do to bolster its analytics capabilities, but don't expect it to make another acquisition anytime soon. After spending $2.5 billion on ExactTarget, Benioff was talking up the need to "balance profitability and growth" at Dreamforce. With no profits to show according to standard accounting principles (the company reported a $124 million loss in its third quarter on revenues of $1 billion), there will be more balancing to do before Salesforce can push its own broad-based standard for deep analytics.

IT groups need data analytics software that's visual and accessible. Vendors are getting the message. Also in the State Of Analytics issue of InformationWeek: SAP CEO envisions a younger, greener, and cloudier company. (Free registration required.)

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Li Tan
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Li Tan,
User Rank: Ninja
12/5/2013 | 12:17:08 AM
Re: Salesforce may rely on Oracle....
From this post I do not see really cutting-edge technologies. This acquisition enhanced the capability of Saleforce.com in business data analytics area but there is no magic behind. For sure the analytics technology will keep involving and the business need more easy-to-use and accessible tools.
DRamanathan079
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DRamanathan079,
User Rank: Apprentice
12/4/2013 | 2:02:41 AM
Re: What's your experience with Salesforce analytics?
Hi Doug

Well this is symptomatic of the market as to the core definition of analytics. SUnTrust is looking to build attrition/segmentation models using deep statistical techniques and then score it off their salesforce base. The perception in the market (no doubt encouraged by the wagers of the larger players and the hand they currently possess) is analytics is this panacea to all your nagging worries. What BI was at the turn of the century when coupled with that shiny warehouse.

Full disclosure: I work with SAS and our interactions withcustomers around their needs are similar to what a SunTrust would like to see in these acquisitions or integration efforts. 

Deepak

 
D. Henschen
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D. Henschen,
User Rank: Author
12/3/2013 | 9:55:06 PM
Re: Salesforce may rely on Oracle....
I don't think we're going to see OBIEE or Hyperion showing up in Salesforce shops unless they're already using those tools. I'd also be surprised to see Salesforce itself using those technologies behind the scenes. There was 0 talk about new uses of Oracle technologies at Dreamforce. Feels like a brand/marketing deal they made as part of a long-term sourcing relationship. Not even a peep about 12c, the container database, and use of its multi-tenancy. I think it's business as usual with the usual technologies.
cbabcock
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cbabcock,
User Rank: Strategist
12/3/2013 | 4:23:28 PM
Salesforce may rely on Oracle....
To what extent would Salesforce prefer to rely on its close partner, Oracle, for deeper BI versus producing it itself? It's already a heavy Oracle database user. To some extent, deeper, more general purpose analytics are contrary to the culture and core competency of Salesforce.com.
Laurianne
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Laurianne,
User Rank: Author
12/3/2013 | 10:35:46 AM
ExactTarget
How have customers received the ExactTarget capabilities? Any of you want to weigh in?
D. Henschen
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D. Henschen,
User Rank: Author
12/3/2013 | 10:35:25 AM
What's your experience with Salesforce analytics?
The cusotmers I've talked to who want deeper analytics generally get there by using inclumbent BI and analytics tools. I talked to SunTrust bank recently, for example, and it developers deep predictive customer scores using SAS -- the software it uses for many analyses well beyond CRM, such as lending risk. It's also deploying Lattice in a move toward deeper marketing analytics.

Given what Benioff said, it's pretty clear Salesforce doesn't intent to compete with the likes of BusinessObjects, Cognos, or, in the big-data vein, Splunk. So the question is, does it provide good-enough reporting and analytics to support sales, service and marketing? Share your experience.
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