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Can Salesforce.com re-engineer business IT?

With 1.5 million developers and a new focus on industry solutions, is Salesforce.com a business platform?

Cliff Saran
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Published: 12 Jun 2014 10:30

With over 1.5 million developers on the Salesforce platform and 2,000 apps on its AppExchange market, is Salesforce.com a true business platform?

The company recently announced it would formally develop and expand its footprint in six industries: financial services and insurance; healthcare and life sciences; retail and consumer products; communications and media; public sector; and automotive and manufacturing.

According to Forrester Research, with its ecosystem of AppExchange partners Salesforce.com can cut the amount of customisation typical in the classic enterprise resource planning (ERP) world from 40% to less than 10%. 

"This particularly suits the systems of engagement world, where clients value agility over customisation to keep up with rising customer demands and expectations," Forrester principal analyst Ted Schadler wrote in the Forrester paper, Brief: Salesforce.com is building industry cloud ecosystems.

Forrester believes corporate developers and system integrators will be drawn to the Salesforce.com platform to develop new, mobile-ready enterprise applications.

Financial Conduct Authority deploys Salesforce.com

Salesforce.com recently announced its first UK datacentre, which is also its first in Europe.

One organisation assessing the UK datacentre is the Financial Conduct Authority (FCA). 

Gareth Lewis, CIO of the FCA, said financial stability is incredibly important and consumers need a degree of protection.

The FCA needed new systems to support consumer credit regulation. "We had six months to set up a platform. We started in January 2014 and went live on 1 April," he said.

The implementation of the system to support consumer credit regulation was not trivial. "It could not be achieved in-house, so we bet the farm on Salesforce.com," said Lewis.

For instance, pharmaceutical giant GlaxoSmithKline used specialist IT services company Bluewolf to build a custom iPad application called Koach. 

The application enables sales reps to search for information such as current research, sales tools and suggested questions to ask doctors based on personality type. 

The app was integrated with Salesforce.com and an internal intranet, so employees had access to all information at their fingertips, according to Bluewolf.

Growth across Europe

Salesforce.com's UK datacentre is due to come online in a few months, which means UK businesses will be able to host their enterprise cloud applications on UK soil. This is potentially a big step for the company as it extends its reach into Europe. German and French datacentre facilities are expected to come online next year.

The software as a service (SaaS) company has put its name to the Heron tower in London, which will now be called Salesforce Tower, and is the company’s flagship office in the heart of the city.

In the UK, Direct Line Group, Eurostar and TNT are among the growing list of organisations choosing Salesforce.com to drive their businesses.

Miguel Milano, European president at Salesforce.com, said: "We fully expect that the next year will see Salesforce.com build on its positive impact in the UK with Salesforce customers, partners and application developers."

Salesforce.com is also looking to extend the momentum it has gained in customer relationship management (CRM) to other areas of enterprise IT.

No need to spend a million on ERP

Waste management company The Green House is one of the organisations that uses Salesforce.com to run its business. The company provides an environmental management service, supporting the operational and regulatory requirements of commercial organisations. 

Philip Mossop, development director at The Green House, originally looked at SAP BusinessOne to run the back-office function for his startup business. "Seven years ago, I had £10,000 in my pocket. When SAP quoted me £1m, my jaw dropped," he said.

Seven years ago, I had £10,000 in my pocket. When SAP quoted me £1m, my jaw dropped

Philip Mossop, The Green House

Instead, he built an enterprise resource planning (ERP) business based on Salesforce.com.

The heart of the system is a customer portal that allows The Green House's customers to find the most appropriate waste collection facility which adheres to the company's internal and regulatory requirements.

The Green House now has a turnover of £10m, with customers such as Caffè Nero on its books.

Today it has just one Salesforce.com developer – the system was built around a customised Salesforce portal.

"With Salesforce's subscription model we eliminate development costs and this saves us a huge amount of money," said Mossop. 

For instance, the company originally spent £12,000 to develop an iPhone app, but this functionality is now available through Salesforce1.

Running a bank on SaaS

The Islamic Bank of Britain (IBB) is another Salesforce.com customer that runs the business on the SaaS product. The bank was established a decade ago and has 50,000 customers. 

"We began using Salesforce in 2009, both for customer-facing and internal applications," said Tim Sinclair, head of marketing at IBB. 

More on Salesforce.com

It began with traditional sales functions such as lead management, but the use of Salesforce.com expanded to the account acquisition process in 2012 and opening savings accounts. All of the bank's products are created on the Salesforce.com platform. "When you click to open a new online account, you go through Salesforce," said Sinclair.

The bank is now working with Tech Mahindra to take its Salesforce-powered Home Purchase Plan application out to market, enabling other financial organisations to buy the app.

Smart wear

CIOs should consider the impact of Salesforce.com moving closer to enterprise IT. According to Forrester, software as a service potentially makes it easier for the business and the CIO to finally decommission older legacy systems that are too fragile or expensive to move outright.

Salesforce does not appear to be standing still. Among the big enterprise software companies, it is the first to target the nascent wearable technology market. The company has released Salesforce Wear Developer Pack to enable application developers to create apps it claims can connect wearable devices to any business process.

Referring to technology such as Google Glass, Salesforce.com said remote service technicians, such as oil rig workers or medical device reps, would be able to access live data, review plans for the equipment they are fixing and get real-time coaching, right from their glasses as they work.

Commenting on Salesforce Wear Developer Pack, Jeroen Tas, CEO of Philips Healthcare Informatics Services and Solutions, said: "We see great promise for our cloud-connected wearable device technologies in the healthcare industry and look forward to working with Salesforce.com and its partners on bringing these solutions to market."

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