Recently capioIT released the 2016 Global Salesforce Services and Solutions Market Capture Share Report highlighting leadership in this market. Here is further insight on the maturity of the market. capioIT Capture Share Report
Salesforce has fundamentally altered the software and broader enterprise IT market. It increased focus upon, and measurement of, business outcomes of technology, transformed software delivery models and forced stagnant competitors to attempt, largely unsuccessfully, to re-engineer their business. It has continually innovated and is a leader in multiple markets that extend beyond the initial cloud-based CRM revolution that first brought it fame.
Despite this, in the early history of Salesforce, the solution market largely underperformed. There were several reasons for this.
Firstly, the concept of SaaS was new, at least in the sense of being a successful business strategy, particularly in light of the ASP collapses. The marketing and sales pitch of Salesforce was that acquisition was a simple credit card transaction. This worked brilliantly to drive volume but made most buyers incorrectly believe that the requirement for integration, data governance and related services would be inconsequential. Not surprisingly, the ease of the model made many organisations take the view that Salesforce could be deployed at 100% of capability without IT involvement, or tellingly, even being aware. Unfortunately for all, this was incorrect. The outcomes of this are still being managed.
Consequently, requirements for services and integration accelerated with the increased enterprise demand. Slowly an independent services ecosystem was developed, firstly with small local providers, before the increasing enterprise corporatisation of the market to the current state, where the market is dominated by the usual suspects for application services and solution providers that largely, with some key exceptions, mirrors Oracle, SAP and Microsoft.
Now the market is closer to maturity, the key constraint for the Salesforce market is quite simple. It is the constriction of available resources in the marketplace in numbers, focus and geography. Salesforce simply will not grow without partner growth in numbers and scale. To help arrest this, Salesforce has made considerable investments in this critical aspect of their business. The Trailhead investments have been exceptional and act as an essential component linking IT and business users of the Salesforce portfolio.
The following factors have driven the demand for the growth of Salesforce solutions.
For the Salesforce users key drivers of growth in Salesforce solutions include:
- The realisation that Salesforce is an enterprise tool, and needs time and money to integrate.
- Skills in Salesforce are difficult to hire, let alone retain.
- Cost of labour is high at a global and regional level
- Increased appreciation of the depth of relationship that external providers have with Salesforce
- Strategic understanding of the focus of competitive differentiation that Salesforce can provide if executed to the potential of the product.
From the vendor or supply side perspective, there have been considerable changes. These include:
- Increase skills of offshore service delivery quality and scale
- The requirement to provide a more globalised capability and level of service
- Investment required to align the growth of Salesforce and extension of the Salesforce offering portfolio
- Development of IP-based repeatable assets for Salesforce deployment
- Tighter integration of technology and business capabilities and client requirements
- Increased skills to identify industry specific requirements
The Salesforce market has matured rapidly. This has happened at both the supply and demand perspective for the investment. The maturation will come when the business itself is more fully realised, but the rapid maturity will continue. As Salesforce is more embedded into the enterprise, it will continue to be mission critical, the solution provider ecosystem will grow around this reinforcing the dynamic market nature.