Salesforce to acquire ClickSoftware for $1.35bn - Service Cloud momentum continues

Profile picture for user ddpreez By Derek du Preez August 8, 2019
Summary:
ClickSoftware is a leader in the field service management space and has been partnering with Salesforce on its Field Service Lightning product in recent years.

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Salesforce has entered into a definitive agreement to acquire field service management vendor ClickSoftware for $1.35 billion. The deal should be viewed through the lens of both Salesforce continuing to push the momentum behind its growing Service Cloud business, but also the market clocking onto the fact that field service management is an obvious use case for digital change (read: more sales). 

ClickSoftware has been working with Salesforce since 2016, following the launch of the cloud giant’s Field Service Lightning product, which aims to provide “proactive, intelligent field service” .  ClickSoftware is a specialist in intelligent field service scheduling and optimisation. 

Field service management has caught investor attention in recent years, largely because digital tools can introduce a lot of efficiency into field service operations. And a lot of businesses still run a very ‘old school’ operation. Where a technician previously would work off a list of clients to service on any given day, not knowing what tools or equipment they’d necessarily need to carry out a fix, digital field service tools can make that experience much better for the technician and the customer. 

For example, traffic? The technician could be rerouted to a different customer. The customer could also input details or add photos into a system that could then be analysed by a technician in advance, so that they know what they’re walking into. Sensor data could also be used to proactively attend to potential problems. 

Some companies, such as ServiceMax, which has also attracted significant interest in recent years, have even moved into areas such as predictive maintenance of products and asset service management. 

In other words, companies with this sort of operation want to move away from the traditional break-fix scenario. 

The deal

Salesforce said that the combined capabilities of ClickSoftware and Field Service Lightning will allow it to “lead the way to the future of field service”. 

Bill Patterson, EVP and GM of Salesforce Service Cloud, pointed to customers continuing to invest in mobility. He said: 

Delivering exceptional field service is an increasingly important priority for companies across industries with more than 70 percent of customer service leaders making significant investments to transform their mobile workforce. 

Our acquisition of ClickSoftware will not only accelerate the growth of Service Cloud, but drive further innovation with Field Service Lightning to better meet the needs of our customers. We are thrilled to welcome the ClickSoftware team to Salesforce.”

CEO of ClickSoftware, Mark Cattini, added: 

Our mission has been clear since the beginning—to be the global leader in field service management and deliver significant value to our customers. Joining Salesforce provides a tremendous opportunity to accelerate this vision.

As a part of Salesforce, we will be able to innovate faster, enabling our joint customers to deliver even better experiences to their customers. This is an exciting milestone, and I look forward to what we’ll deliver to our respective customers as one company after close.

The benefit of the Salesforce platform also means that any updates by technicians or field service agents in Field Service Lightning can also be then updated across other areas such as customer service and sales. 

However, as noted above, this story isn’t just about the product. Salesforce’s Service Cloud has seen huge momentum in recent years and the company recently reported that the business unit grew 20% year-on-year, bringing in $1.02 billion. 

My colleague Phil Wainewright has highlighted how market trends bode will for Service Cloud and that it could soon overtake Salesforce’s Sales Cloud, which has been the cornerstone of its business since inception. 

The acquisition is expected to close during Salesforce’s fiscal quarter ending October 31, 2019.