Salesforce.com, What the F$#% are You Thinking?!?!?!

I remember there was a song that was pretty popular a few years ago called “If I had a Million Dollars,” by the Bare Naked Ladies. That song seems childish and silly compared to the spending spree that Salesforce.com has been on over the past several months.

The two main acquisitions by Salesforce that give me pause are its puzzling $250m+ acquisition of hobbyist Ruby platform Heroku that no one was actually paying to use in production. Now, Benioff and Co. are shelling out $276m or so to acquire Radian6, a social media monitoring and analytics company.

What the #$%& is going on here?

Salesforce.com has spent more than half a BILLION dollars on a) platform tools that no one really cares about and b) a “cool” set of tools that really doesn’t add anything major to its core offerings (where, I should point out – Salesforce.com makes all of its money).

I think Radian6 does some cool stuff, really I do. But this multiple is ridiculous – and dangerous for the industry. It was bad enough hearing everyone freak out about Color getting a trillion dollars in funding (OK, maybe I’m off by a hair or two here) – but this type of overspending makes those shouting “BUBBLE!” seem like wise sages right now.

Salesforce paid a ridiculous multiple for a company probably struggling to grow profitably in a space that has not matured into a “must have” portion of the app stack for small and mid-sized businesses and may not for several years. While it is great to get insightful data from social channels, what companies have proven to have the right actionable processes in place to leverage this data in any valuable way?

Agin, social media monitoring is a useful tool – BUT – Radian6 was already tightly integrated into Salesforce.com. AND – I imagine that only about 15% TOPS of Salesforce.com’s user base really gives a damn about the kind of social media intelligence that Radian6 provides. Remember, Salesforce’s bread and butter is still the SMB and midmarket – areas where “brand monitoring” are not as critical as in, say, the Global 2000 (where Salesforce.com pretends to be a big player).

So, to recap, Salesforce.com has spent upwards of $500m+ to bulk up a platform that does not serve its core user base, and for a social media monitoring tool that its core user base has no desire or need to use.

Wow.

Just imagine, if Salesforce.com spent that money making its core CRM product actually easier to use, contain a less “Siebel in a browser” look and more of a modern web app feel, more reliable and less vulnerable to universal outages, etc. Imagine if they kept their actual core user base happy and actually still built CRM tools?

I guess we’ll never know…

8 thoughts on “Salesforce.com, What the F$#% are You Thinking?!?!?!

  1. Thanks Ben – but while I think Marc’s vision is in a lot of ways correct, it shouldn’t take a third of a billion to make it a reality ;)

  2. Pingback: The Info-Tech Research Blog

  3. Pingback: Salesforce.com shines with new a social “Radian6-ce” | The Info-Tech Research Blog

  4. Full disclosure: I am being forced to use Sugar because my client currently uses it. Have used 4 different platforms, of which SFDC and Sugar are two most recent. 7+ years in sales, 2 years in sales coaching. Ex-(open source)-developer (LAMP stack). Sugar is the worst-thought-out SFA platform I’ve ever used.

    All that to say: the marketplace is the ultimate arbiter of whether Salesforce made a good buy. Why not concentrate on building a product/platform that sales teams enjoy using because it makes them better?

  5. I think you make a good point, and one that Sugar has been striving to address for years now (not sure which version you’re using).

    All too often, business technology is built by techy developers with no real understanding of the daily life, processes, and preferences of the business users that have to deal with the application every day.

    So, when Sugar 6 was in the works, Sugar brought in usability experts, involved our own sales teams and partners etc. to try to reduce the number of clicks needed to do most common tasks in the SFA modules.

    The result: tools like the Productivity bar on the top of every screen that helps users do things like create and send an associated email with one click, log or plan a call or meeting in a click, open a case or find a contact without disrupting your current tasks.

    In my mind it is the little things like usability and user productivity that make a CRM system valuable. It is NOT expensive and “nice to have” add-on tools and analytics that may or may not benefit the everyday user.

  6. Hey Martin,
    I am a social media analyst in London and I believe that the Radian6 move is a good one (probably a bit too expensive but still relevant):
    – After trying and pushing 5 different platforms, Radian6 is probably one of the most advanced tool with the best vision where the market is heading.
    – It’s not only about social media analytics. With their engagement platform, online customer service becomes so easy.
    – It won’t be difficult for Salesforce to sale Radian6 to its exisiting clients (really no need to worry).
    For sure only time will tell us if this was the right thing to do. However, I strongly believe that this will help them to become the leader in the online customer service market.

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