capioIT forecasts the Asia Pacific Salesforce Services Market to reach US$4.9B by 2023

capioIT forecasts the Asia Pacific Salesforce Services Market to reach US$4.9B by 2023 – Dominated by Japan and Australia, with India, The Philippines and China the fastest-growing markets

Salesforce is the clearly leading SaaS provider, not just in CRM, or Customer Experience, but it sets the benchmark across the market. Revenues in the Asia Pacific region have exceeded US$1B, and with growth at 26%, it is enabling the services ecosystem to grow at an accelerated rate.

In 2019, capioIT forecasts that the Asia Pacific Salesforce Services market will be US$1,635M. In 2023 we forecast that it will reach US$4,857M. The CAGR from 2019 to 2023 is 31.8%. The largest market in 2019 and 2023 will be Japan. It will make up 33.3% of the 2019 market, and 32.5% of the 2023 market. ANZ is close behind, representing 30.2% of the 2019 market, and 25.6% of the 2023 market.

The key trends are shown in the two tables below.

From a country perspective, as noted in terms of market size. $$$ potential, in 2018 and 2023 Japan leads the way, followed by Australia. In 2023 they are 32.5% and 22.7% of the total market respectively. Korea is 10.7% and India 8.5% in 2023. With China the fifth-largest services opportunity, the top five markets represent over 80% of the total opportunity. China is perhaps a smaller market than anticipated, capioIT is very conservative about the long term prospects for growth in China. We expect that the political environment will deteriorate, and China is also on a path to develop compatible technology itself for applications and infrastructure rather than to rely on US or Western-based technology. This is despite Salesforce making strong long term relationships with Alibaba in the local market, albeit initially for MNC relationships. The market remains difficult to forecast.

The figure below highlights the growth rates of each market from 2018-2023. Despite a small base, the Philippines is the fastest-growing market followed by the substantially larger PRC and Indian markets. Clearly, these will increase in importance through the forecast period and belong. The slowest growing markets are the more mature markets of Australia, New Zealand and Taiwan.

 

 

Capture Point

Salesforce is clearly the strongest SAAS provider globally and across broad technology, not just the breadth of customer experience markets that it provides solutions. The services opportunity presented by Salesforce has been rapidly increasing. Focused on Australia and Japan primarily, it is increasingly covering the entire region, and customers create their own requirements and opportunities. Services vendors need to have the flexibility to deliver services across Salesforce offerings, geography and industry. Failure to do this, drive automation and deliver the customer experience will lead to a loss of market share and opportunity. 

 

Note – Salesforce Services are defined as externally provided services for the integration of Salesforce into an organisation regardless of industry.

IT services refer to the business and technical skills and resources to support organisations to identify, develop, manage and optimise information and business processes. The Business and IT services market is characterised by the type of outcomes and skills required such as Design of solutions, building solutions and management of outcomes.

Note – The following countries are included in the Asia Pacific region

• ASEAN
  • Indonesia
  • Malaysia
  • Philippines
  • Singapore
  • Thailand
• ANZ
  • Australia
  • New Zealand
• Greater China
  • Hong Kong
  • PRC
  • Taiwan
• India
• Japan
• Korea
• Rest of Asia Pacific

Veeam – Hybrid Cloud is the next Act

Veeam recently held its fourth annual analyst summit near San Diego. I have been able to attend 3 of these events, and since the first event in 2016, I have seen it double in size, and gain confidence, scale and customer importance on the back of Ratmir Timashev and Andre Baronov’s leadership. 

As an analyst event, they always do a great job, it is focused, yet they provide the opportunity to ensure attendees have an enjoyable experience along the way.

Veeam officially broke the US$1B revenue mark earlier this year, joining an elite band of software firms to achieve this. It has also done this, wisely, in my view, maintaining a privately held status. The private ownership has enabled Veeam to make the path it chooses, not what the market decides for it. While this has some risk, and the founders could certainly cash into the billions with an IPO, it has so far resisted this path.

It has reached the magical billion-dollar mark mainly based on providing backup to the enterprise data centre. That was Act 1. Act 2, of course, involves supporting to the Hybrid Cloud environment. Hybrid Cloud for enterprises large and small is a default model of infrastructure deployment. To do this, Version 10 will have a range of enhancements to integrate backup across any workload sources, e.g. Public Cloud, Private Cloud. It is not just the product that is enhanced; any push towards the cloud environment requires subscription pricing and delivery, again an increased but essential option for customers. Subscription pricing is a transition for Veeam, partners and customers; however, a transformation that had to occur, and one that will set up the base for the future. 

Overall Veeam is a very successful organisation and has significantly optimised customer outcomes with a significant Net Promoter Score in the 70s. It is increasing presence in the enterprise market, as well as having a play across most industry, geography and company size definitions. It is not without challenges, but most of the problems in perspective come from doing more and maximising outcomes rather than any significant deficiencies.

For example, there is considerable opportunity for it to be more active in the regulatory and compliance market to help manage risk for organisations. As it increases enterprise presence, and by a proxy relationship with the likes of Deloitte and PwC, compliance will be a distinct opportunity to meet. This type of opportunity further provides for deeper customer relationships and new roles beyond the infrastructure teams. Of course, this is critical for it to make the step to Act 2, and $2Billion in revenue and beyond.

Capture Point
Veeam is a remarkable case story. They have reached the US$1 billion mark in revenue. Success in any language. However, it knew that it had to evolve to the next act if it was to maintain growth, impact and of course, retain the skills. Act 2 is all about Hybrid Cloud. It is well placed to indeed be the lead provider in Data Management in Hybrid Cloud. It can be more than this if it executes on customer requirements, so expect there to be an Act 3 to reflect this once it conquers the current customer requirements. 

Salesforce – Acquires Tableau, accelerates analytics as it plays a Customer 360 game

Salesforce announced on Monday, June 10th (US time) the acquisition of data visualisation leader Tableau for US$15.7B. Some jaws dropped at the purchased and the price and some at the purchaser. It was inevitable that Tableau would be acquired, Oracle, IBM, or SAP could have been the suitor, but Salesforce is no surprise.

In all honesty, anyone who has watched Salesforce closely should neither be surprised or concerned by this acquisition. Salesforce is not merely your cloud CRM provider anymore. It has not been for years, but for some outdated perception is the reality.

Salesforce is an increasingly broad and complex enterprise software behemoth. It’s recently reported numbers highlight this. It is on track for US$20B in revenue by 2022, with year to year growth in the most recent quarterly reported numbers just shy of 25%. Sales and Service Cloud represent 60% of quarterly revenues, but the fastest growth is in the platform and increasingly new investment areas. What Salesforce does so well is to identify adjacencies to an evolving core product. The acquisition of Mulesoft in 2018 set the path to solving integration problems that challenged Salesforce deployment for customers. The purchase of Map Anything in April 2019, highlighted this adjacency approach as well as the ability of Salesforce’s ecosystem to develop partners through the AppExchange then acquire into Salesforce.

So how does Tableau fit into Salesforce? For nearly US$16B, it had better be a precise fit. Tableau is the leader in data visualisation. It is not an analytics platform as such; one does not go to Tableau for deep statistical insight; instead, it uses it to communicate data to as broad an audience as possible. Salesforce has analytics capability as a core pillar, but this has been one of the more disappointing offerings from Salesforce and has far from reached the potential required. Salesforce will only benefit from a functionality and capability perspective with Tableau inside rather than as a partner or third-party application.

Quite simply across the product suite, and as a standalone offering, Tableau will significantly increase the visualisation, both automated and user-led capabilities of Salesforce. In terms of what it means for both companies, of course, there is good and bad. There is a very significant overlap in the customer bases of both products. It is not 100%, but there will be a balance of customer familiarity and the opportunity to cross-sell for Salesforce, and the extensive partner network that it oversees. There will be some cultural challenges, no doubt in the integration. Salesforce talks about Tableau as an independent organisation within Salesforce, and that will work until Mark Benioff believes it doesn’t. The internal but separate approach rarely works, and the Tableau logo will disappear at a point in time as a consequence.

There are a few differences between the integration of Tableau and the most comparable business Mulesoft. Mulesoft was literally up the street from Salesforce in San Francisco and culturally was based on many of the premises of Salesforce. For Seattle based Tableau, there will be a few differences culturally, although nothing that cannot be overcome with communication, honesty and much hard work on the cultural integration.

The on-premise and cloud capability of Tableau may disappear quicker than the road map that Tableau had, again, Salesforce places great import on the SaaS, no Software approach. Advanced analytics and AI capabilities of Tableau are not its fundamental value proposition so that Einstein will remain the lead there, with some added capability. The non-customer centric user of Tableau provides new client opportunities for Salesforce.

The final point of the acquisition is that it proves in 2019 and the future, you cannot be a one trick software firm. To remain relevant, you need multiple capabilities. Tableau struggled with this, VMware famously struggled until the “invention” of hybrid cloud to be more than virtualisation, and SAS Institute and ESRI remain the poster firms for relying on one old product suite.

Capture Point
Salesforce paid a premium for Tableau, even in a capital-rich 2019. In the world of Salesforce, that is rarely the point. One of the challenging aspects in the Salesforce 360 portfolio is fundamentally sharpened; it gains new users, new capabilities and opportunities for the core product to expand. As with all acquisition, the trick will be the integration, cultural alignment, and keeping developers and partners on board.

capioIT releases the Inaugural 2019 Asia Pacific Salesforce Solution Providers Capture Share Report – Accenture repeats global leadership with aggressive competition chasing hard.

Globally, Salesforce is the dominant SaaS provider and the clear leader in the customer experience ecosystem. This dominance has not yet translated as strongly to the broad Asia Pacific market, although that reflects local market characteristics more than Salesforce execution. Asia is not a homogenous market.

The variances between countries are incredibly significant. There is no such thing as an Asia Pacific strategy. It has to be a country by country strategy as a bare minimum. In key markets, in particular, Australia, Salesforce has enabled significant growth and strong customer outcomes. Some other markets are more problematic growth wise due to a range of issues relating to the fact that Asia is far from homogenous. Each market has it’s own character, form and function.

Whilst the Asia Pacific Salesforce Solution Providers market is less consistently mature than the global ecosystem, it is well overdue for an analysis of the competitive state of the market. As a result, capioIT is proud to release the first comprehensive analysis of the Salesforce Solution Providers market in the region.

Six vendors were ranked as Asia Pacific Market Makers in 2019. (In alphabetical order)

• Accenture
• Bluewolf an IBM Company
• Capgemini
• Cognizant
• Deloitte
• PwC

Accenture has leadership in the Asia Pacific market for Salesforce solution providers. This regional leadership follows the long-term global leadership that it has experienced and reflects a long-term vision and investment path. It sets the benchmark. However, there is definite competition set to provide a similar level of depth and capability. At the regional level, Deloitte, PwC and Capgemini, Cognizant and Bluewolf-IBM are the nearest competitors. At a country or local level, there are also a number of providers that provide solutions for local requirements and have sophisticated capabilities.

A large number of local firms have been acquired by larger global firms. This leaves the market in a bit of an imbalance from a skills perspective. More investment is required to address this. Salesforce Ventures have made substantial local investments, but there is always the issue of organisations effectively reaching a certain size or scale and then putting themselves up for sale. This is great for the transaction participants but not so helpful for the systematic scaled-out growth of the ecosystem. It is the ecosystem that drives Salesforce outcomes.

The following vendors were included in the report.

• Accenture
• Beryl 8
• Bluewolf, an IBM Company
• Capgemini
• Cognizant
• Deloitte
• DXC
• Fujitsu
• Infosys
• NTT
• PwC
• SqwarePeg
• TCS
• Wipro Appirio

For more information, details on the full report or clarification, please contact Phil Hassey, email phil@capioit.com.

Capture Share reports are based on the analysis of 17 critical capabilities and attributes of services providers. These attributes are focused in two key areas, Transform and Leverage. 

To ensure the appropriate level of analysis and data integrity, the individual attributes are weighted in percentage terms on the basis of the overall influence for the Transform and Leverage capabilities.

 

DXC Acquires System Partners – Finally joins the Salesforce Ecosystem

At Dreamforce 2018 today, DXC announced the acquisition of Australian based Salesforce Platinum partner, System Partners. System Partners is one of the leading integrators in Australia, with a focus on Financial Services and the Public Sector. Firstly, congratulations to both parties. Acquisitions are a tough, but ultimately and hopefully worthwhile exercise for all parties.

The acquisition is not a surprise. It was industry knowledge that the founders of System Partners were looking for an exit strategy, and DXC has had a longterm acquisition strategy in Australia, both as DXC and previously with CSC, most significantly acquiring UXC.

The acquisition provides DXC with the first significant foray into the Salesforce ecosystem. Despite only having offices in Australia, according to data in the Salesforce App Exchange, System Partners will double the number of certified consultants. Salesforce capability has long been a significant hole for DXC. The lack of a SaaS/Cloud practice has been a critical issue in limiting the power of DXC to offer clients an end to end capability. Inside the Australian market, the deal makes good sense. It is in alignment with the former UXC businesses and has a complimentary industry coverage with the focus on public and financial services sectors.

There will be a transition issue for the team at System Partners, and this will need to be addressed with a suitable incentive to stay in the firm. capioIT has identified that the more substantial consolidations in the Salesforce ecosystem have been marked by a loss of skills from the acquired firm as the reality of being part of a significant global entity takes hold. DXC will hope that the UXC experience will be the key benchmark in this regard.

From a global perspective, DXC is still going to be significantly underweight in the Salesforce ecosystem. It hasn’t been able to replicate the DXC Australian model, underpinned by the UXC model. Unfortunately for DXC, due to the lack of a mid-sized Solution providers market the scale race is going to take time, and need substantial organic investment. The lack of momentum to date may be challenging to ignite given this track record.

It is also worth commentating on the Australian market, and the broader Asia Pacific Solutions and SI market for Salesforce. Consolidation is accelerating. In August Cognizant acquired SaaSFocus, an Australian and Indian based integrator. capioIT is confident that the scramble for scale by larger providers will continue throughout 2018 and beyond. That is excellent news for the smaller integrators, but it cannot be seen as an easy way out. The larger SI’s are not naive. They will acquire for quality and the best people. Valuations certainly have come down from the heady days of the acquisition of Cloud Sherpas by Accenture.

Capture Point
DXC has finally entered the Salesforce ecosystem through the acquisition of System Partners in Australia. This is significant globally and in the Australian context for DXC. It is very complimentary for Australia and provides the opportunity for DXC to launch a global SaaS/Cloud ecosystem. The critical issue will be skills retention and scaling up. Success in these factors will be the measurement of success for the deal in the long term.

Customer Perspectives on the Salesforce Ecosystem

As part of the Capture Share process – see – https://capioit.wordpress.com/2018/08/27/1828/ capioIT conducted extensive qualitative interviews with Salesforce clients to understand their experience with both the Salesforce platform and the integration provider. here is some of the feedback 

Salesforce has had a rapidly increasing strategic and operational impact on clients. Not surprisingly this has accelerated as the scope and breadth of the platform has expanded organically and through acquisitions.

As part of the Capture Share validation process, we interviewed over 30 clients of Salesforce. These clients were global in geography, crossed a range of industries and ranged from leading auto manufacturers and financial institutions to regional government agencies and retailers. Due to time and geographical constraints, interviews were conducted over the phone by this report’s author.

Naturally, there were variances across each of the respondents in their usage, satisfaction and outcomes from Salesforce. Note, the primary objective of the interviews was to understand the usage of third-party solution providers, but naturally, the overall impact of Salesforce was a key underlying theme about which, customers were more than willing to talk.

From a Salesforce perspective, there were several critical outcomes from the standpoint of the customer. Overall, satisfaction is high. There is a reason why Salesforce is the largest CRM provider, has a real position of strength in crucial customer-focused cloud platforms and is regularly ranked as one of, if not the most innovative firm globally.

Where Salesforce has succeeded with customers

• Constant and long-term Innovation in product and execution
• Customers have noted improvement in the integration of the product family, with Marketing Cloud an exception to this. More integration is needed structurally and from a product roadmap
• Momentum and growth in the market generated by Salesforce is a definite benefit. The energy enables clients to sell Salesforce, and often CRM investments in their leadership and C-Suite.
• Ease of use of the product. Training for most users is minimal at the entry level, early speed to business value does occur.
• Investing in local data centres, most notably from the interviews capioIT undertook. Canada and Australia. Migration to these centres had been slightly slower than anticipated, but acceleration was noted.
• Investing in, and managing the ICV ecosystem, creating a genuine differentiation across the ecosystem and encouraging large cross-investment, e.g. Solution providers investing in ISV’s alongside Salesforce Ventures.
• Training and skill development. Trailhead is a crucial tool for training platforms, both from a content and experience perspective and is clearly the benchmark across the technology and business services sector.

 

Where Salesforce needs further investment  

• Dev Ops and Automation – The failings of this was a very consistent pain point for clients. Progress is too slow, and it is not considered a priority for Salesforce, or for the solution providers. There is too much “buck passing” between Salesforce, the SI and the customer.
• Industry Solutions have been too slow to develop, and the integration of the solutions is either problematic or does not provide the business outcomes required.
• Lightning is typically too hard and expensive to integrate. Further refinement is required for Salesforce to optimise this.
• Data privacy and overall importance and awareness lacks particularly in light of the strength of issues around this in 2018
• Analytics across integrated platforms requires a platform perspective and investment. It is considered the lost child by some customers.
• Business customers need more support for the integration of Salesforce into the IT department. There cannot be a barrier between the two groups, and Salesforce needs to be actively looking to overcome this.

Capture Point

Satisfaction with both Salesforce and the broader ecosystem is high. Clients are not naive, they know what works and what doesn’t from the Salesforce ecosystem perspective. Radical change is not required, but an incremental and systemic improvement.

Google Maps is now a GIS platform – Consumers and Enterprise win

 

Google held their Enterprise Cloud meeting in San Francisco in July. While there was plenty to hear from them regarding investment in the Google Cloud Platform (GCP), the announcements were not limited to the cloud. For me, as a “former” GIS practitioner and active participant and observer of the GIS and location services market, some of the most exciting announcements came from Google Maps.

Google Maps is without a doubt now a GIS platform. It has been identified as such by Google. The announcement is significant as Google has long been loath to call itself a GIS platform. That has changed. Some purists will also feel that it is not a real GIS platform, but it is the number one mapping platform in the world. It has mastered crowdsourcing and use cases alike. Definitions don’t matter, user intent and outcome is in place alongside capability.

What does this mean? It is a not unexpected development in the platform or the broader location industry. Google is a default consumer tool and the richness of the experience on the platform is not going to be missed particularly from a consumer engagement. It doesn’t mean that Google Maps is going to be a significant force from a traditional environmental GIS perspective, except to be a communications platform for example in natural disaster management. Use cases in government and education will be slower than commercial realms. Most importantly, it means that GIS and location analysis can be democratised. This is a natural and greatly appreciated outcome.

For incumbents – This is a threat to both legacy traditional providers such as ESRI and the burgeoning open source community. While they have worked together in the past, this will change the dynamic somewhat. Smaller vendors such as MapInfo that rely on the commercial sector are more at risk from the two platforms that surround it, e.g. ESRI and now GoogleMaps.

What use cases will suit it? The most obvious use cases remain the same for Google Maps. Route optimisation, gaming, demographic analysis, market optimisation all work. What is going to be an increasingly critical use case is that of IOT related outcomes, for example, asset tracking. It is an easily justifiable use case. You cannot do IOT without GIS.

What will Google need to change? Users are familiar with Google Maps. The cost of enterprise deployment can be a challenge, so this will need to be managed by Google and provides the opportunities. Increased training and certification, while flying in the face of democratisation in some respects is also going to be a pivotal outcome to build the ecosystem.

Capture Point

It is not a shock that Google Maps now considers itself a GIS platform. The evolution is no surprise. It will continue to be the default platform for consumer use cases, and as it continues investment, enterprise outcomes are going to be even more clearly defined. The progression is great. We need competition and revolution in the GIS ecosystem. If nothing else, this will be driven with further and more aggressive Google Maps growth.