Insight on Salesforce’s Next Move

It’s my pleasure to share somebody else’s research with you from time to time, and this time it comes from Lauren Carlson. Lauren is a SFA software analyst with Software Advice, a consultancy that does exactly what it says on the tin. Her latest article, “Salesforce’s Next Buy: Applications or Platform?”, takes a close look at Salesforce.com’s M&A activity over the past five years and what it suggests about the company’s direction. It’s a good read, and her conclusions are definitely worth considering. I’d be annoyed at her being so clever at so young an age, but (1) that would be patronizing of me and (2) we’re all about reflected glory here at Third Idea. This means (3) I also get to weigh in on her article with my own opinion.

Salesforce, as Carlson says, has maintained a steady focus on being a platform company for several years. But it has done so through relatively few acquisitions of “platform” entities—Sendia and Heroku are the only ones on her list, versus more than a dozen in the apps column. We need to ask what more Salesforce requires to build out its platform capability, and that’s where things get muddy for me.

As a cloud apps provider, Salesforce doesn’t need to have a clear line between what is an application and what is part of its underlying platform. Sitemasher and Jigsaw are both considered applications acquisitions, but they add to the whole package, and can be leveraged by any Salesforce user to some extent—clever developers and homebrewers can use these apps (among many others) in Salesforce’s development environment to create something unique. All it takes is imagination and some computer savvy.

Salesforce CEO Marc Benioff knows this, and is himself a creative visionary. Building the platform means adding apps, and building the apps means growing the platform. It’s hard to make a mistake when every move you make is a net positive. The way to answer the question Carlson poses in her article is not with one bucket term or the other, but by imagining what would add the most to what’s already under the Salesforce umbrella.