Techaisle Blog

As part of SMB Compass Series, Techaisle has just released a free and detailed report on Salesforce for SMBs – Advantages, Limitations & Competitor comparisons. The report is focused on Salesforce solution portfolio for SMBs and acts as guidance for SMBs deciding to use CRM solutions and planning to use Salesforce solutions as well as competitor solutions. The report has been compiled based on deep discussions with SMBs using Salesforce, partners providing Salesforce implementation for SMBs and Techaisle global cloud surveys. The report covers Salesforce Cloud, SalesforceIQ, Salesforce Analytics Cloud, Salesfroce Pardot and Salesforce Marketing Cloud.

Salesforce has been leading the charge in cloud CRM and has been adding product offerings to its portfolio to provide end-to-end solution attracting, managing & retaining customers. Survey data also shows that within the US, Salesforce appears within top 10 cloud vendors as mentioned by SMBs. 

Click on the report cover image to download the report

Table of Contents is given below

Techaisle’s worldwide SMB & Midmarket cloud adoption surveys show that 38% of small businesses and 48% of midmarket firms are planning to use cloud CRM in the next 12 months. Data also shows that there is a very strong correlation between top business issues for 2017 and use of CRM. Within midmarket firms, improving effectiveness of sales & marketing is the second top business issue and fourth from the top for overall SMBs. In addition, attracting & retaining new customers /improving customer satisfaction is the 2nd most important business issue for SMBs.

Until a few years ago a set of scary questions used to be debated in many business board rooms. “Fire the CEO, CFO or SAP?” Nobody dared to fire SAP. Fast forward today, are we reaching the same set of questions with a difference - replacing SAP with Salesforce.com? Recent Dreamforce 2014, Salesforce.com’s annual gala event firmly established the company’s foothold in the industry and its increasing grip on the enterprise and businesses of all sizes. This year, there was also an increased focus on SMBs, a “back-to-the-roots” story, the backbone on which Salesforce.com launched its “no software” business but somewhere along the way lost sight of SMBs. But then Salesforce.com is no longer a software company, it is a platform company. Is the “no software” logo still valid? Is the company still suitable for SMBs?

The Best

Over the last three years, Salesforce.com has successfully added solutions to its portfolio and has checked off an important spoke in the SMB Wheel of CRM Productivity with business intelligence, one of key elements in the overall CRM productivity suite. Many of the other issues are addressed by the rich Salesforce.com partner ecosystem that connects via Force.com. Combined, these applications provide a 360 degree view of the sales and marketing process. Experience shows that as a software category matures, suite providers eventually win out against point product players. And Salesforce.com is winning.

 As Salesforce began its foray into the enterprise world, it seemed that it neglected its SMB market, which grew almost in spite of Salesforce’s lack of attention. However, from 2015 onwards, SFDC promises change as it is committing to doubling its investments in SMB education and driving growth. In fact, this year’s Dreamforce had nearly twice as many sessions for SMBs as in 2013.

Techaisle’s SMB segmentation, based on cloud and mobility adoption, finds that there are six major SMB segments:

1. Smart Investors
3. Growth Aspirers
4.  
5. Dynamic IT
6.  
7. Productivity-centric,
8.  
9. Innovation-Driven, and
10.  
11. Passive Followers

Of these, Dynamic SMBs, followed by Smart Investor SMBs, are most likely to benefit from CRM suites. 

The Good

The new Wave analytics platform, announced and demoed with fanfare at Dreamforce 2014, is one of the most important products to have been introduced by Salesforce.com recently. It gives some credence to Salesforce’s newly christened Analytical Cloud. But is it really that impressive beyond the flashy demo at Dreamforce 2014? Is it really analytics or a series of reports cleverly put together?

Let us set the context first. Business analytics is fast becoming an integral technology investment for an SMB organization, directly contributing to its revenue growth and reduction in operating costs by enabling informed decision making. Techaisle’s survey of SMBs across numerous countries shows that number of SMBs using one or more type of business intelligence is nearly doubling each year. Business Intelligence tools have matured and become more widely available through cloud-based services.  As a result, enterprise-grade ETL, analytics, reporting, collaboration, dashboards and other functionalities are now within affordable reach of SMBs.

We are also in a transformative time for mobility and thereby mobile business Intelligence. The move to mobile BI has largely up until now been accomplished by migrating existing functionality to a mobile environment by using new technologies on top of the old.  Companies such as Oracle, IBM and SAP are doing this through acquisition of smaller companies and integrating them into existing products. On the other hand, in a classic build vs. buy fashion, smaller companies, not hampered by existing architectural constraints are offering SaaS BI services and building new offers from scratch. Smaller BI vendors in many cases have gained a timing advantage, using native technology to bring existing mobile functionality to BI. Instead of simply providing mobile links to server data, these new products offer the rich, interactive capabilities, with the ability to use rich interactive screen manipulation, i.e., pinch and squeeze or geo-location awareness, as part of the data exploration and visualization experience. True mobile business intelligence includes ability to interact with data objects on the screen, such as filters, check-boxes, search, drill-down and drill-through to the record level and other interactive functions. Of course, being able to then use built-in device communications capabilities is also of importance once the information has been identified – SMS, email and Internet forms for dissemination of the information, as well as secure access to collaborative destinations.

Techaisle survey data also shows that the right information for SMBs centers on intelligence that helps them make sound financial decisions. This is reflected in the top three analytics areas reported by SMB respondents:

1. Financial analysis (47% of SMBs)
2. Sales tracking (44% of SMBs)
4. Business activity monitoring (43% of SMBs)

These findings show that SMBs are looking to analyze data that helps to manage DSO (Days Sales Outstanding, the core accounts receivable issue), maximize inventory turns, determine the return on marketing investment for a new route to market, and/or examine the potential lifetime value of a customer through various distribution channels. SMB business intelligence/analytics tools need to deliver across this set of expectations.

What Wave Analytics is not

Wave analytics is mobile business intelligence and not analytics. It can answer one question at a time, but can’t analyze a set of questions based on multi-dimensional data and queries allowing a small business executive to make informed decisions across multiple business factors. Wave analytics cloud offers some but not all of the above functionalities. And Wave’s capabilities are tied to Salesforce.com data unless an SMB is willing to invest in the customization needed to extend analysis across other data sets, thereby increasing TCO. And that is where the bad begins. As one SMB told Techaisle, “Business intelligence and analytics is big need for an SMB, but the platform must provide easy to build reports and dashboards capabilities. If you need to hire a developer for everything, we are back to square one”.

The Bad

To quote Marc Benioff’s tweet, “What skills do you need to find a job today? #5 Salesforce”, quoting an article in Infoworld. Is it SAP redux - was there not a complete industry that had popped up and thrived for SAP developers? In many cases, the level of complexity and cost of deploying Wave solutions, beyond parametric reporting, may be out of reach for many SMBs and may instead be more attractive in the enterprise segment.

Dashboards with ad hoc exploration and structured reports are becoming the ‘new normal’, empowering the SMBs to look at information within the right context depending upon the demands of the business. Right context is not just about driving new user experience, something that Salesforce.com has focused on; it is about driving new business models as well by increasing the value of business intelligence tool to the point where it informs and supports the creation of new SMB revenue models. There are some excellent examples of embedded analysis capabilities that allow very flexible use of KPIs by SMBs across all areas of their business, including creating and analyzing the impact of new KPIs on the fly. Out-of-the-box Wave analytics cloud falls short and does not adequately address SMB BI/analytics needs.

At the outset, the Wave analytics cloud looks like it is targeted towards dashboard-saturated executives who have not been exposed to new technologies. It looks great because it is on Salesforce.com platform and it is mobile. For a CEO, running a company means determining what he/she must track and what he/she can safely de-emphasize. For this, a CEO typically requires multiple dashboards delivering “what-if” analysis capabilities; these CEOs need the ability to generate KPIs quickly and easily, measure them and refine them with time. Keeping true to “no software” rule, there should be either no or very little customization required. It’s clear that Wave needs more IT involvement – and the Wave platform partners announced at Dreamforce were all ‘big names’ such as Accenture and Deloitte, which are not the typical developers for SMBs. The expectation that an SMB has programmers sitting around eager to extract, integrate, and develop dashboards to provide one view of the business is clearly mistaken – and it certainly stretches the limits of “no software” rule.

The Ugly – Have we seen this movie before?

Mark Twain said history does not repeat itself but it does rhyme. The evolution of Salesforce.com represents a remake of a movie and we are not sure it ends well for SMBs. SFDC, which was the SMB champion ten years ago, is starting to look like Napoleon from Orwell’s Animal Farm novel.

Marc Benioff’s Dreamforce keynotes always showcase large enterprise customers, and no SMBs. However, on the 2^nd day, in an SMB keynote by Tony Rodoni and Brian Millham there were three case studies of SMBs. However, all three were “born in the cloud” SMBs, not representative of over 90 percent of small businesses. Even Tony Rodoni, SVP of Small Business, Salesforce.com referred to high-growth, scalable small businesses (read startups) in Silicon Valley – again not representative of most of the world. Where have the real-world examples gone? One VP of information technology for an SMB aptly observed that, “SMB for them (SFDC) is always the next Facebook”.

In a Techaisle survey of 2155 SMBs (US, Canada, Germany) to understand cloud adoption, 42 percent mentioned that they are afraid of losing control of their data and another 31 percent said that they are fearful of vendor lock-in. These businesses worry about vendor control of data as they have neither the technical expertise nor the purchasing power to extricate themselves from supplier relationships if they experience difficulties. This concern extends to Salesforce: as the CIO of a financial services SMB said, “SFDC does not play nice when you have to import data from non-cloud solutions, and it is a challenge even with cloud applications.”

With Salesforce.com an SMB could experience both the fear factors – lock-in, loss of control on data - the concerns that are common to enterprise software suites. When software becomes a platform it develops a tendency to move over to the ‘dark side’: It unconsciously forces a lock-in, reduces the pace of innovation, limits price protection and restricts future proofing. SFDC SMB customers are already experiencing this; as one said, “They (SFDC) list per-month prices, but the contracts are executed in years’ terms”. Taken as a whole it flies in the face of everything that is cloud. Is it time for SMBs to find a new champion? And can they, or is the Salesforce grip already too tight? As a platform, Salesforce.com is like a runaway train, very difficult to stop by numerous point solution players. 

Linoleum vs. Deep Carpet Selling

There is an old story about a consultant who was advising a client about changes in his market, and what they would mean to sales strategy. The consultant went through a series of tables demonstrating that, due to increased interconnectivity with other corporate systems, products in the client’s segment were increasingly purchased by senior managers rather than shop floor managers. The consultant stressed the importance of developing new marketing material and directing the sales force to call on the senior managers instead of the shop floor, to which the client replied, “You are talking about deep carpet selling. We don’t do deep carpet selling. We do linoleum selling here.”

Most IT vendors engage in a variation of “linoleum selling”, focused on engaging IT professionals in discussions that focus on the technical attributes of their products. However, BDMs (Business Decision Makers) – who tend to inhabit the “carpeted” realms of their businesses – are more likely to be engaged by discussions about business benefits and objectives than by “feeds and speeds”. In categories where the BDM is central to the needs identification and budget process, sales reps will need to develop “deep carpet” language and skills.

The data from Techaisle’s SMB and Midmarket IT Decision Making Authority survey demonstrates that we have already reached that point in cloud applications and software in both the small and midmarket segments.

Need vs. Enhancements

Survey data shows that in both micro/very small businesses (1-19 employees) and the smaller midmarket businesses (100-499 employees), BDMs are the primary drivers for determining the need for new cloud business applications.

These findings are broadly consistent with the results from the survey question on determining the need for enhancements to existing cloud solutions. While in most cases, IT has more influence in determining the need for enhancements than it does in determining the need for new solutions, BDMs are still generally the most important voice in the discussion. ITDM’s (IT Decision Maker) influence is directly attributable to the extent that enhancements are driven by technological rather than functional requirements.

Conclusively, survey data shows that business requirements are the prime mover for identifying the need for both new solutions and significant enhancements/upgrades in micro and very small businesses, and that technology concerns play a meaningful role in instigating discussions about enhancements to existing solutions in businesses with 20-499 employees.

Interestingly, within the 500-999 segments, there is more BDM influence over identifying the need for meaningful enhancements than for new applications. Following the logic applied to the other segments, this suggests that enhancements within these near-enterprise accounts result primarily from process optimization requirements, rather than from a need to upgrade the underlying technology.

Cloud Software budget authority

“Determining the need for” a new business application or a “meaningful enhancement” to an existing application is not, of course, identical to signing off on the purchase of a new solution. When Techaisle extended its questioning to include “budgetary control and authority,” it resulted in two interesting findings:

• The proportion of SMBs where budgetary control and purchasing authority for new applications rests entirely with BDMs increases in all employee size segments, relative to the statistics for determining need in these segments. This means that BDM control over the final purchase decision is even higher than the “determining the need for” statistics suggest.

• The proportion of respondents reporting that responsibility resides entirely with either IT or business – but is not shared between them – increases in five out of seven employee size segments (missing only the 10-19 and 20-49 employees groups). This suggests that needs identification may be more collaborative than final purchase decisions.

Both findings point to the same conclusion: that BDMs are extremely important to suppliers of cloud software. Chart below provides a graphical representation of the determining need vs. final purchase decision authority balance by employee size.

Techaisle’s SMB & Midmarket Collaboration adoption research found that apart from traditional collaboration solutions of file sharing and communication, SMBs need SaaS business applications to have collaborative properties. 34 percent of SMBs and 44 percent of midmarket businesses say that SaaS applications should have built-in collaboration properties out-of-the-box. They say that the success of a cloud business application is its ability to provide /support collaboration, including email and/or hosted telephony.

Techaisle survey data shows that there is a strong connection between SaaS applications and collaboration. In some ways, these connections are intuitive: SaaS is a resource that can be accessed simultaneously by multiple individuals located anyplace where there is a network connection and cloud is inherently supportive of collaboration, and many applications are either explicitly focused on collaborative activities (ranging from SharePoint to CRM) or embed these capabilities (as with productivity applications like Office 365 or Google Apps).

Techaisle’s SMB research found quantitative support for these perceptions. When SMB respondents were asked, “what are the key attributes of a successful cloud solution?” As would be expected, security, scalability, and data management (including disaster recovery) were prominent in these responses. However, the most common answer was “the ability to support mobility,” which speaks to the requirement to enable mobile collaboration. And the fifth-most common response was “the ability to provide or support collaboration.” As the figure below shows, this is an important issue across size categories: it was cited as an important cloud success attribute by nearly half of near-enterprise (500-999 employees) firms, and also by companies with just 10-19 employees.

Further analysis of current and planned SaaS workloads underscores the importance of collaborative capabilities within SaaS applications. Techaisle asked small business and midmarket respondents who are currently using or planning to use cloud to identify the top SaaS workloads in use today, and those that are in current adoption plans. The results, that collaboration plays a role in most SaaS applications:

Workloads explicitly focused on collaboration

• Hosted VoIP (used today by 52 percent of midmarket businesses, with 35 percent planning adoption)

• Content publishing (used today by 53 percent of midmarket businesses; 56 percent of SaaS using small businesses are planning deployment)

• CRM (in use or planned by 93 percent of midmarket businesses and 71 percent of SaaS using small businesses)

Workloads where collaboration is a key differentiator, attribute or outcome

• Office suites (both Google Apps and Office 365 emphasize intrinsic collaboration capabilities. Office suites are the most commonly used SaaS application type within small business, and the third most commonly used application type within midmarket business)

• Project management (most commonly used SaaS application type within midmarket business, and the third most commonly used SaaS application type within small business)

• Business Intelligence (53 percent of midmarket businesses and 44 percent of small business are planning adoption)

Workloads where better collaboration or reporting within/across departments/functions and/or with external stakeholders is a key outcome

• Accounting/financial management and ERP (accounting/financial management is the second most widely used SaaS application type within small businesses)

• HR management (deployed by more than half of midmarket business SaaS users)

• Marketing automation (highest rate of planned adoption within midmarket business SaaS users)

These findings underscore trends that are apparent in the SMB SaaS and collaboration markets: that increasingly collaboration is important to SMBs (as a means of boosting productivity), and that cloud-based systems – including file sharing systems, and extending to SaaS applications as well – are expected to provide support for many forms of collaborative activities.

Deployment scope further impacts SMB buyer requirements

As Techaisle observes the evolution of collaborative solution capabilities within SaaS, it is important to also consider the scope across which these applications and solutions are expected to operate. Solutions that connect workers within a group or department benefit from a common understanding of context and source applications; those that connect users across groups/departments exist within a single company, and can focus on supporting IT-approved devices with reference to IT-defined security policies. Solutions that extend beyond the organization’s own staff may well offer more business impact than internal-only systems by speeding communications to customers, prospects and/or suppliers – but they come with increased issues in terms of support for seamless connectivity across multiple platforms, and potentially, may raise security concerts as well.

In the research, Techaisle asked respondents to specify the scope of their collaboration solutions. The results help clarify the strong demand for collaboration within microbusinesses, and provide insight into why businesses view collaboration as an essential solution investment area. More than 40 percent of microbusinesses, and 39 percent of all SMBs, extend their collaboration infrastructure to support for customers. Midmarket businesses are more likely to focus on internal collaboration, but they join smaller peers in having a roughly 20 percent incidence of supporting supply chain relationships (suppliers/vendors) through their collaboration systems.

Looking at the above chart, one sees that there is the potential for missed connections within the emerging panoply of collaboration-enabling systems. Social media, mobility, BI and cloud all have important collaboration extensions. But how can businesses ensure that these technologies will connect internally once they are in place? Techaisle believes that collaboration is evolving in response to this market condition. IT vendors have traditionally tried to position collaboration solutions as a platform on which businesses can create new capabilities and integrated processes. However, data shows that businesses are instead acquiring collaborative capacities as part of other applications: social media, mobility, cloud and BI all provide discrete and important – but potentially disconnected – collaboration capabilities. Moving forward, Techaisle expects that collaborative technology solutions will increasingly be positioned as a framework that integrates and extends the value of these discrete system capabilities, rather than as a “first step” platform.

Related Blogs:

SMB and Midmarket File Sharing & Collaboration Adoption to Grow by 52 percent

SMB Content Management & Collaboration Solutions Adoption: Seven Key Trends

Report details:

360 on SMB & Midmarket File Sharing & Collaboration Solutions Adoption Trends