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As Salesforce digests CloudCraze, prepare for B2B commerce disruption

Phil Wainewright Profile picture for user pwainewright May 21, 2018
Acquiring CloudCraze allows Salesforce to bring digital disruption to B2B commerce, connecting into CPQ and Service Cloud as well as its B2C commerce engine

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One of the recurring themes that CRM giant Salesforce promotes is the transformation of the retail industry brought on by digital commerce. It's a story that everyone can relate to because each of us are consumers in our individual lives, and we have all witnessed enormous change in how we shop over the past few years. But that emphasis may be shifting soon. Despite the undoubted power of the consumer, a much larger proportion of global economic activity consists of commerce between businesses. In most industries, the same transformative impact of B2B digital commerce has yet to be felt — but change is coming.

Digital commerce in the business-to-consumer (B2C) sphere is already making extensive use of technology to take advantage of advanced tools such as analytics, targeted personalization, and machine learning. In contrast, business-to-business (B2B) commerce has remained a technology backwater. It's only now embarking on the path to digital, says Ray Grady, SVP & General Manager of B2B Commerce at Salesforce:

B2B is not remotely close. It's still the early innings. A lot of our customers haven't done it. Maybe they don't want to [upset] their distributors, or they have a green-screen system. That's changing now.

Grady was previously President and Chief Customer Officer at CloudCraze, the B2B commerce specialist acquired this year by Salesforce in a transaction that closed just last month. It comes two years after Salesforce first entered the digital commerce arena with its $2.8 billion acquisition of B2C e-commerce platform Demandware, since rebranded as Commerce Cloud.

Work will now begin on integrating the two commerce engines into a single platform, but that may not be an easy task. Even though CloudCraze has built its technology on the Salesforce platform, the needs it addresses have very little overlap with the areas where Demandware's technology has excelled.

What CloudCraze brings to Salesforce

CloudCraze caters for businesses with complex price books and discount structures, from industrial manufacturing to chemicals distribution, Grady explains. How these businesses split their inventory, the volume of orders they handle, the way they price specific customer contracts, or their support for subscription payments or different payments types — all of this is beyond the scope of a retail commerce platform. Similary, CloudCraze wasn't engineered for the highly promotional, highly merchandized product sets that Demandware excels at.

Bringing those consumer-world approaches into B2B selling will help companies reduce their costs, find new customers, or bring new products to market, says Grady:

It's early innings, but these B2B companies are deploying B2C tactics where it makes sense and seeing big returns.

Equally important is integration to the rest of the Salesforce portfolio, he adds. Digital commerce can extend the self-service functionality of Service Cloud for example. There's also a natural fit with the configure-price-quote (CPQ) capabilities of the Salesforce Quote-to-Cash product, which CloudCraze started working with even before its acquisition by Salesforce in late 2015. This will continue to be a big focus now that CloudCraze is part of Salesforce, Grady confirms:

If you look at the broader product conversations happening in Salesforce today, we're probably spending as much time talking about CPQ and commerce B2B, as about B2B and B2C commerce together.

Many ways to integrate B2B commerce

Closer integration across the different functions involved in the B2B customer relationship will make for a more seamless experience, says Grady. For example, a sales rep might configure a quotation for the customer and then email back and forth refining the details, before adding the finalized proposition to the ecommerce platform. The customer can then find it in the cart ready for final approval and check out.

You can see real-world scenarios where sales, service and commerce are stitched together.

All of this requires some imagination from customers and Grady says that many need to think carefully how to implement the B2B commerce platform and ensure the sales team understands how to make use of it.

There's a huge education on what you need to do.

Some of these guys see this as an IT project. That's the wrong way to look at it. This is a business application, you need to resource it like any other business application.

It isn't just implement the technology, there's more to it than that in commerce.

My take

The impact of digital commerce in the B2B landscape has been less than in B2C primarily because there's much less repeatability across each company's customer base in a B2B environment. Therefore B2C has been the low-hanging fruit where digital commerce could have the most impact.

The most obvious area of attack as Salesforce now begins to address the B2B end of the market is to find volume opportunities to deliver similar economies of scale. This suggests that an early B2B market that Salesforce will want to expore is the wholesale distribution landscape that sits behind the retail industry. Similarly, any business that offers a catalog of products to a volume business market, from office supplies to utility wear.

But the much bigger opportunity is across all of those industries where businesses sell complex products, often mixed with services and ancillary supplies, under carefully negotiated contracts. This is where CloudCraze's expertise lies, but requirements are complex and often involve replacing and/or connecting into longstanding legacy systems. There are also significant competitors here, for example Apttus, which has just launched a new version of what it calls its middle office platform, combining CPQ, B2B commerce and contract lifecycle management (CLM).

Enterprise technology buyers should expect these and other vendors to come knocking on their doors soon. B2B commerce may have been a neglected backwater, but it's about to get a whole lot more attention. Existing solutions are ripe for replacement and these new platforms can offer a much more joined-up solution that's in tune with the cross-functional working and joined-up customer experience of the digital age. Change is on its way.

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Disclosure - Salesforce is a diginomica premier partner at time of writing.

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