Salesforce needs a more anti-social approach


opinion/analysis As it continues its mega-push into what it has described as “social enterprise” technologies, risks losing its focus on its core CRM products, particularly as its software as a service model has failed to prove itself in several key markets in Australia.

If you’ve been following for a long time, as I have, you probably think of the US vendor as a fairly traditional enterprise IT software. Sure, the company has long differentiated itself through its focus on SaaS-delivered solutions, rather than the on-premise model preferred by most of its rivals, but at its core the company still largely makes money by selling software to large organisations through their CIOs and CFOs.

Then too, has a strong history in enterprise IT. The company was founded in the mid-1990’s, after all, by former high-flying Oracle executive Marc Benioff, and still maintains links to Oracle, especially through the ongoing friendly rivalry between Benioff and his mentor, Oracle founder Larry Ellison.

However, if you examine’s current positioning in the Australian market, you’ll likely find yourself questioning the characterisation of the company as an enterprise IT vendor. Right now, is all about what it describes as the “social enterprise”. By this, it means the social networking software which it acquired with the March 2011 buyout of Radian6, and the Chatter feature which it has increasingly added to its existing customer relationship management suite — and elsewhere through its other products.

Between Chatter and Radian6, Salesforce now has probably the most complete package of corporate-grade social networking solutions in existence right now; and it’s pimping that technology for all it’s worth. At the company’s Cloudforce confab in Sydney last week, the “social enterprise” was front and centre. CommBank’s chief marketing officer Andy Lark was trotted out at the event’s keynote to discuss the bank’s use of Chatter and Radian6, and similar stories were heard from the likes of Vodafone, Spotify, and others.

Breakout sessions featured food giant Nestle and the marketing & public relations firm Ogilvy talking in detail about “social media listening and engagement” with Radian6, while CGU Insurance detailed its Chatter deployment. Later on, it was the turn of Rio Tinto, SAI Global and Lend Lease to talk about how they’d deployed the “social enterprise”, and Australian winery Yalumba discussed Salesforce’s platform, and how it allowed organisations to build “social websites”.

Unfortunately I wasn’t able to attend Cloudforce due to time constraints, but as I watched some of the videos from the event, quizzed about the agenda and caught up with the coverage, I couldn’t help but feel as though some innocuous comments made in a post promoting a Cloudforce social media session on the company’s local blog last week were actually quite prescient. “Social social social. Everyone’s always on about social,” the blog post states. “What’s the big deal?”

Since when, I thought to myself, had started targeting chief marketing officers with its products rather than chief information or financial officers? Since when had the company become focused on customer “buzz” and on monitoring “social media” rather than on deployments of its SaaS-based CRM software? Why, I wondered, was Cloudforce all about the “social enterprise” and not about the whole spectrum of’s products — not only its CRM offering, but also its customer service offerings, its help desk software, its cloud computing platform, its cloud database software, its Heroku development platform?

To me, it feels like what is doing right now is dumbing down its quite comprehensive enterprise IT software offerings into a rather limited message. The company’s Radian6 and Chatter product lines appear to be soaking up all of its corporate energy, and all of its marketing messages appear to be getting squeezed through this one tight aperture. This is quite a dangerous approach for the company.

Most commentators agree that Radian6’s technology is amongst the best available in the corporate social media monitoring space, giving marketers a good oversight of what their customers are talking about on social networking platforms such as Facebook and Twitter, for example.

However, if you look at the company’s financials, you wouldn’t be so enthusiastic about its prospects. When it acquired Radian6, revealed that the buyout was expected to increase its revenues by only $45 million to $50 million in the financial year ending on 31 January 2012. This is a miniscule amount in the context of’s overall revenues, which in 2012 were in the range of US$2.3 billion.

What this indicates is that while large organisations such as the Commonwealth Bank and Vodafone do consider this kind of “social enterprise” technology to be very important, that doesn’t mean they’ll spend a lot of money with to get access to it. Unlike’s core CRM solution, Radian6 isn’t the kind of tool which organisations pay hundreds of dollars per month per user to access.

In fact, Radian6’s absolute top package appears to cost just US$10,000 per month in total. In comparison,’s most popular CRM package costs US$125 per user per month. When you consider that any major organisation to deploy’s CRM package would likely be licensing several hundred seats at least per month, you start to see how the company’s CRM offering scales up into great global revenue; while more limited tools like Radian6 don’t.

You can see why bought Radian6, and why it has developed Chatter. Both tools are great additions to the company’s core CRM offering, and is on the right track with its belief that using these tools will give organisations additional insight into their customers and their own offerings.

But let’s not beat around the bush; both Radian6 and Chatter are not stand-alone products in their own right, but features. If Microsoft, Oracle or SAP had bought such tools, they would already be rapidly integrating them into their existing products rather than focusing their whole organisation around selling the new and shiny toys to customers. Chief marketing officers may be great case studies for, but their budgets do not extend to enterprise IT software rollouts worth millions. They simply do not control that spending.

There is also the fact that at the same time as is pushing “the social enterprise” so hard, customers appear to be going elsewhere.

The company’s continuing reluctance to establish an Australian datacentre (Asia-Pacific customers were recently migrated onto Japanese infrastructure) has effectively locked out of Australia’s public sector, which represents much of the nation’s IT spend, and I suspect it’s a similar case with Australia’s financial services sector, although of course does have some core clients in this area, as detailed above.

Ironically, a research study partially funded by itself recently found that one of the major barriers stopping Australian organisations from migrating to cloud computing platforms is the lack of cloud infrastructure based in Australia.

Meanwhile, Oracle and Microsoft, both of which have on-shore options in Australia, are making hay while the CRM sun shines, both announcing a slew of major CRM wins locally over the past six months, including several where the prospective customer explicitly examined’s offering but chose to go elsewhere. Many of these wins have been SaaS-style deployments; right in the core market which helped create over the past decade, but is not capitalising strongly on right now in Australia.

Now, I should admit that in general I’m a big fan of I have a great deal of admiration for the way the company has shaken up the global enterprise software market with its software as a service offerings, and I love the continuing degree of innovation, fresh thinking and transparency we have seen from the company over the past fifteen years. I’m normally right on board with the message and I love seeing Benioff stick it to the enterprise IT bigwigs — with a vengeance.

In markets dominated by powerful software giants such as Oracle, Microsoft and SAP, often appears as a breath of fresh air.

But to my nose, just now that air is smelling a bit stale. Right now, needs to get its head out of its “social enterprise” behind and start competing much more strongly in Australia in its core product areas. Innovation is great, but when a company named “Salesforce” starts to suffer execution problems in selling its products to the Australian market, you know something is wrong.

Image credit: Paul Houle, Creative Commons


  1. Hi Renai. Interesting article and definitely something for Salesforce to consider in an attempt to balance between it’s new push into social and it’s traditional position in CRM. One point of clarification is that Yalumba and Lend Lease have both developed and released their websites and portals on OrchestraCMS by Stantive, which is built natively on top of Sites, rather than As a disclaimer, I’m the CEO of the company and never want to miss an opportunity to be lost to make sure we’re highlighted, but only where deserved! :) Thanks!

  2. I think the push of Radian6 is really about how it integrates into the existing crm solution – radian6 being a sexy social focused feature of the main CRM suite, so to speak.

    • I agree; but I think at a time when Salesforce is struggling to make the case for its CRM product on core grounds, the availability of these kind of additional features is not going to necessarily help it. I don’t see organisations crying out for this kind of ‘social enterprise’ integration right now — I think they’re still struggling to make the case for a switch to a low-capex style SaaS-style CRM, rather than looking for additional ‘social’ features.

  3. I went to the sales force site recently to evaluate their CRM – I left not knowing a single thing about what the heck their business does any more.. except that it’s Social and Cloud.

  4. Not everyone in an org needs or has access to the core CRM system. Getting hooks in via alternate products which have a wider net to throw in terms of licenses (Chatter = everyone with an email essentially) sounds like a decent plan to me. Especially at the top end of town where moves to a Salesforce like SaaS CRM platform is unlikely (Think the big banks and Telcos) anytime soon.

    All of those large companies are doing some form of social monitoring and engagement at the moment, tying it up in to a one vendor neat package is an attractive proposition, both for a CIO and a CMO.

    • You make a very interesting point — and I completely agree. I think where I find the Salesforce approach a bit frustrating at the moment is that they don’t seem to be providing info for all sides. There should be aspects of their proposition aimed at the techies and aspects aimed at the marketers; similar to the way that Microsoft has different tracks for infrastructure guys and different tracks for the guys doing unified communications solutions.

      Right now, for Salesforce, everything is about ‘social’, and I feel like it’s a more complex company than that. Heroku, for example, has very little to do with ‘social.

      • Some great points from everyone but I would suggest Heroku does has lots to do with social as its a great and popular platform for developing Facebook apps.. But as you are saying its lots more than that as well!

  5. Its an interesting commentary, it’s a shame you couldn’t attend the keynote to see the products being discussed as a whole and how all the parts fit together to provide compelling solutions for customers.

    You suggest they aren’t providing info for all sides, nothing could be further from the truth, we’re working with all areas in different organizations in a huge range of industries, core CRM is still a significant proportion of the focus, support, material and resource is freely available from salesforce to support that.

    The new tools are great but they aren’t detracting from the core, they are complementary to them.

    I’m not sure the basis for the struggle to make a case you’re referring to, the rate we’re winning services work to implement salesforce is remarkable, we miss out on a tiny proportion of the competitive bids we enter against other vendors, customers get social and the impact it is having across their organizations, and they need tools and processes to take advantage of a rapidly changing market.

    I highly recommend you attend Dreamforce this year to really see what it’s all about, seeing the whole picture up close will fill in some of your knowledge gaps.

    • Andy,

      I refer you to Delimiter’s comments policy:

      Your suggestion that I have general “knowledge gaps” about breaches the requirement that comments be polite. In addition, I note you have not disclosed that you work for ProQuest Consulting, which is a partner. Please bear in mind the appropriateness of any future comments you may make with respect to these issues.

      I respect your comments, however I will note that you have not provided any evidence for them. You say that you’re winning a lot of new work to implement, and that CRM is core; do you have any examples of new implementations, particularly in the CRM area, in Australia, to share? I note that I have provided examples for my argument.

      In addition, can you highlight examples where is providing focus and support around CRM?

      Kind regards,


  6. Interesting article. I broadly agree but would add more thoughts. We signed up as a Salesforce client after helping a client select a CRM – and they chose Salesforce. We signed up mainly for Chatter (not for us an add on, but the main game initially). We’re now transitioning our Outlook and MS Access CRM on to it because it is more accessible to our small team and has some nice features, thou the cloud is slower and less flexible than a bespoke solution. The issue for us is that moving from 5 to 6 users means a big hike in price. This is not how to boil a frog. The functionality is really good for a small, virtual business as well as the big end of town that you describe. We’re a small blip on their fixed cost recovery model. Methinks they should have a smarter, or at least more flexible, costing and/or pricing model. Sales effort was 10 out of 10, as was the one occasion we needed support. We are philosophically vendor neutral, by the way, so have no axe to grind with the product.

  7. I disagree – the social aspect is a critical element that SF need to get right if only because some customers will start with social media (Radian6, BuddyMedia) and move towards SF’s CRM later. Also, when looking at the pricing you need to add up the complete stack – e.g. a large company using Radian6, BuddyMedia & Service Cloud. However, trying to sell this to IT makes no sense as they typically aren’t the buyers. I think SF’s approach will make more sense when we look back in 12 months time. Disclaimer: I’m a consultant, but we don’t have any formal relationship with SF :-)

  8. Woah this blog is great i like reading your posts. Stay up the great paintings! You already know, a lot of people are looking around for this info, you could aid them greatly.

  9. Interesting observations Renai. Salesforce has always been ahead of the game with its service positioning … maybe five years ahead when you look back on how advanced their thinking was on the whole notion of enterprise-grade SaaS and PaaS. I think their Social Enterprise strategy will also be regarded as ‘obvious’ when we look back on it in a few years time … even though there are currently few Australian enterprise that get it and its seems a bit ‘out there’.

    The Department of Business and Innovation in Victoria is a good example of a government agency that is making good and well considered use of Salesforce for mission critical applications in the areas of CRM and grants administration … so it can be done. Of course an on-shore data centre would make everyone more comfortable, but the data sovereignty issues are actually not show stoppers for executives that are more focused on business outcomes than procurement process.

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