Long-term observers of Salesforce will recall a period in the not-so-distant past when any public appearance by CEO Marc Benioff included a triumphant brandishing of a smart-toothbrush as evidence of the emergence of the Internet of Things (IoT).
With that in mind, today’s announcement of an IoT Cloud takes on a degree of inevitability, although in the pre-briefing yesterday Salesforce execs were more focused on thermostats than toothbrushes.
The IoT Cloud is based on three planks:
- Providing the ability to listen to wealth of data generated by the IoT or any other data source by capturing billions of events that occur daily.
- Triggering actions based on real-time rules using simple and intuitive tools.
- Enabling proactive one-to-one engagement through Salesforce allowing actions to be taken via any of the other clouds in the portfolio.
The use case scenario presented had a smart thermostat company using the Salesforce IoT Cloud to pull in data from millions of homes around the world, including from mobile apps, weather forecasts, power grids and the thermostat themselves. That data would then be analyzed and would be able to flag up potential problems, ranging from the relatively mundane low battery through to altering about bad weather conditions.
Tod Nielsen, executive vice president for App Cloud at Salesforce, says that there’s a genuine business need here for this sort of cloud to be added to the Salesforce portfolio, simply because organizations aren’t making the most of the data at their disposal. He cites a McKinsey study into the oil industry that finds that only 1% of data gathered is ever acted upon.
About 20 years ago in the industry, if you wanted to find out what was going on in your systems, you had to buy a product like Tivoli to be able to figure out what was happening. It’s possible now to generate a 1GB log file in one second, with all of the data and information. For companies, to find what they’re looking for is the challenge. To find the proverbial needle in the haystack. The IoT Cloud is the system that will enable and transform the way companies access and engage with their customers and process all this data
Nielsen also pitches a ‘this is IoT for the rest of us’ line, arguing that while IBM used to advertize for data scientists to tackle immense complexity, the Salesforce offering intends to “democratize the IoT”. He says:
The IoT Cloud is actually usable by mere mortals, by those closest to the business and customers. Instead of constraining the ability to access this data to a limited set of resources and elite people, we said it’s really important that we democratise the IoT and enable the masses to be able to process and get this information.
But it’s not quite that simple in practice. Nielsen acknowledges that users are going to need some third party assistance around integration between the IoT Cloud and the rest of the Salesforce platform – and that’s going to mean some coding is required:
I expect there’ll be an ecosystem of providers that will provide data connections to the IoT Cloud. So a customer will be able to say: ‘I want to be able to connect to this and this’ and then get the integration they’re looking for.
At this stage ARM, Informatica and Xively LogMeln have been lined-up as initial members of this putative ecosystem.
The other interesting aspect of the IoT Cloud is the strap-line ‘Powered by Thunder’. From a marketing point-of-view, this is a mirroring of the Lightning branding for the new Salesforce UI, but from a technology-perspective it’s a a massively scalable, real-time event processing engine that’s part of App Cloud platform services. Neilson explains:
It enables connectivity at IoT scale.
The IoT Cloud goes into pilot phase in early 2016, with general release anticipated for later in the year. Pricing to be confirmed.
We haven’t seen the last of the toothbrush, I’ll stake my life on that.
Flippancy aside, this is a logical move for Salesforce. Nielson pitches it as a “natural extension”. That’s entirely possible and all part of a good marketing pitch.
But more importantly it’s potentially a major new revenue stream. Salesforce cites a June 2015 report from the McKinsey Global Institute that reckons IoT applications could have a potential economic impact of as much as $11.1 trillion per year by 2025.
I reckon we’ll be hearing that prediction trotted out as regularly as we have had the Gartner ‘CMO as IT decision-maker’ mantra aired around the Marketing Cloud. (Hopefully the IoT prediction is a bid more accurate…)
Whatever the ‘think of a number’ projected revenue total turns out to be, two things are certain. Firstly, there’s a lot of money to be made here. Secondly. Salesforce isn’t going to leave that on the table for Oracle and SAP et al to mop up.
Disclosure – at time of writing, Oracle, Salesforce and SAP are premier partners of diginomica.