Salesforce launches new Marketing Cloud. Is it a threat to the digital marketing apps vendors?
The 'Marketing Cloud' was launched with great fanfare at Salesforce's annual Dreamforce conference in September 2012. The Marketing Cloud must have struck fear into the hearts to some marketing apps vendors. The likes of Marketo, Silverpop, Eloqua and ExactTarget have placed big bets on integrating their SaaS Cloud software with Salesforce.com's SaaS Cloud platforms. The startpoint for B2B marketing automation projects is nearly always to access and integrate the client's valuable CRM data, which is most often held within the Salesforce.com Cloud.
All the marketing apps vendors have been growing nicely in double digits annually, largely on the back of Salesforce's open APIs and willingness to partner. However, a cumulative sigh of relief went up when the marketing applications vendors realised that Salesforce's Marketing Cloud was an extension of Salesforce's 'social enterprise' strategic play, rather than the launch of competitive marketing automation products.
Salesforce Marketing Cloud actually represents the integration of its recent social media acquisitions Radian6 and BuddyMedia. Radian6 provides social listening, workflow and automation and measurement. BuddyMedia provides social content, engagement, and display advertisements within the social media environment (targeting the 1 billion Facebook users primarily). BuddyMedia, in particular, provides Salesforce with some great enterprise technology, as it enables segmentation and targeting of social media users by sentiment, age, location, emotion and intention. In addition, there's also another 1,700+ third party social enterprise apps on AppExchange.
The Marketing Cloud is therefore part of Salesforce's strategy to fill out its own social platform product portfolio. Their enterprise social media tool Chatter Communities already has an installed base of 150,000 active Chatter networks and the new beta version extends Chatter externally to partners and the supply chain, for example. Chatterbox (like Dropbox) syncs files for secure viewing across all devices and utilises the Salesforce Touch platform for mobile and multi-device access.
Salesforce is a cloud technology company that happens to do CRM, rather than a CRM apps vendor that operates in the cloud. It is not really an apps company but a platform/infrastructure company and a 'trusted custodian' of customer data. "No Software" is still Salesforce's tag line. What's paid for is function, "clicks, not code". In the old days an IT Director's worth was judged by the size of his data centre. Salesforce plans to put an end to all that, and sees the future of IT Departments as being focused on regulation, control, governance and compliance rather than operational IT management.
However, Salesforce's focus on Social and Mobile mirrors the developments of the marketing applications vendors, which makes for an uneasy truce. The choice of the term 'Marketing Cloud' rather than something 'Social' and Salesforce's claim that it has 'the only unified social marketing suite' will send shivers up their spines. Also Salesforce is now competing in the Call Centre and Customer Service automation and so therefore now offers a triumvirate Sales/Marketing/Service suite of products.
All the vendors are moving in the same direction with not too dissimilar messaging. Market consolidation beckons (note ExactTarget's recent acquisition of Pardot). Salesforce is ramping up its efforts to penetrate enterprise accounts with its 'social enterprise' products and services and has a big drive on to recruit enterprise sales people. Social functionality is now an integral component in all the digital marketing apps vendors' armoury. 'Co-opetition' with the digital marketing apps vendors, at the very least, is clearly inevitable.
This should be good news for customers however. Salesforce's active participation will bring down the price point and provide credibility to Cloud/SaaS offerings in the digital marketing space. This alone should accelerate customer adoption and market growth, which will be no bad thing for all the marketing apps vendors.
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