As you'd expect from its name, Salesforce is best known for its salesforce automation software. But its customer service offering has now become a much bigger growth engine for the company. So much so that Service Cloud, which added half a billion in revenue last financial year to reach $1.8 billion at 38% year-on-year growth, looks on track next year to overtake Sales Cloud, which grew 10% to $2.7 billion last year.
Mike Milburn, the man in charge of Service Cloud as senior vice president and general manager, is naturally proud of that performance. But when I met him this week in London, he wouldn't be drawn on revenue comparisons. It's clear he sees the two Clouds as complementary rather than in competition:
Service Cloud and Sales Cloud I consider them very close together and they both help solve a customer's problem, it's not an either/or situation. That's how, I think, our product team approaches it as well.
[When] I go into every [customer] meeting, I know all of the sales opportunities we have, I know what their installed base is, I also know what kind of cases and issues they've had over any period of time. That's just from my perspective as a GM and that's really the power of the platform, when you see sales folks that are operating and that know that 360-degree view of the customer.
So when Milburn talks about what's new in the platform, he not only cites the expansion of Service Cloud to add field service capabilities, but also Salesforce's introduction of Thunder for processing Internet of Things data and December's acquisition of Steelbrick to add quote-to-cash capabilities into Sales Cloud.
You take all three of those things together and the conversations that we're having now are conversations with companies that have goods, or products, or services, and they're connecting across the whole cycle.
It's much more than just quote-to-cash or how do you service? You can do all of that now, truly on a single platform. Or you can listen to devices that are talking and you can find the exception activity and you can automatically dispatch field service ...
We've added these components to our product portfolio that allow businesses to move at an entirely new speed, and more agile, and deeper in every aspect for that. That's what's really exciting about the last year.
Nevertheless, out of the three there's no question that field service is the ingredient with the most potential to fuel Service Cloud growth this year and next. Although it was a controversial move that encroaches on functional territory already occupied by Salesforce partners such as ServiceMax, Milburn says the arguments for bringing field service into the Salesforce data model were too commercially compelling to resist.
When you think about how customers buy, [they often] want to go Service Cloud and want to extend that to field service immediately. Some of it was the buying cycle, some of it was the technology and the architecture. We have the case object, we have [service] entitlements, we've got this incredible data model that supports B2B, B2C, public sector. It's grown this incredible business all around the world.
The way that we architected, that allows that kind of growth. We wanted that exact same kind of success for Field Service.
Connecting the data
Milburn hinted at further announcements later this year that will add machine intelligence into the mix to proactively analyze the data Salesforce collects and help streamline the customer experience.
Our vision isn't just to create this case, it's to solve this case through intelligence. I think that's the power of what we've put together ...
Service Cloud takes a tremendous amount of data. Think about the number of phone calls, and the number of CTI screen pops that we do, the number of knowledge base searches that we do, the number of queries that we do across our mobile apps. Now with field service, I think, we have the ability to look at a tremendous amount of data. I think you're going to see Service Cloud become much more intelligent in the upcoming releases, that's definitely one of our focuses.
Building on the underlying architecture to help people get things done faster has always been a feature of the Salesforce approach, says Milburn, citing the example of the Chatter social feed or the more recent introduction of an 'SOS' button that lets customers connect to live help from within a web or mobile application screen.
Chatter connects deeply with the [data] objects. We see people using Chatter for case management, where if somebody creates a ticket or a case then the company can swarm around that and all the experts can help solve that faster. It's that same relationship back to data that enables that to be popular.
It's the same thing with SOS. You're communicating around a Salesforce object, which is something that the business cares about. It's that relationship between those things that people are finding incredible value with.
Customer service evolves
All of these new ways of interacting with customers mark an evolution of customer service to emphasize real-time contact and rapid resolution which plays to Salesforce's strengths, as Milburn explains.
We've seen channels evolve. There was paper, there was mail, that evolved into a 1-800 number, that evolved into email, and fax and other forms. It evolved into omnichannel, and then we've just added SOS to that. Maybe there'll be a future one. Supporting across all channels, again, is something that Salesforce does natively.
This is creating new opportunities across a wider spectrum of industries. Early adopters of Service Cloud were in the high-tech and financial services industries, but now healthcare, retail, manufacturing and even government are joining in, says Milburn.
I think businesses have had such access to incredible technology but it's been siloed from the public sector ...
I'm one of the exec sponsors of the city of Denver and when you go visit their engagement center, you would think you're in one of the most advanced consumer goods companies. You wouldn't know you're in a public sector government when you look at their cases, you look at their tickets, you're talking about a citizen moved in and they have a problem with a permit or they have a problem with a school. They're just providing a high caliber service.
When you back away from it, you think, 'This is what you should expect the government to do.' Why should you expect to wait in line? Why should you expect to submit a form? You should just expect wonderful service from your government.
Some enterprises are also using the capabilities of Service Cloud to extend the philosophy of a better service experience to staff inside their own organizations, he says.
They're bringing those same tenets of customer service that you're going to solve their problem first the right time. You're not just going to triage it, push it on down the hall. You're not going to create that digital paper, or any kind of paper process, that you're going to resolve those issues.
That's the power of the connected platform, that's the power of having sales, and service, and collaboration, having chat, around the exact same platform ...
I like to think that employees are customers, citizens are customers. I think customer service is one of the more advanced forms of service and we're trying to give that same power, that same platform that we have to anybody inside of a company that wants to use it for service of any kind.
Even more than what the technology enables, it's this spread of the customer service ethos into all industries and functions that is driving the continuing uptake of Service Cloud. Milburn's content with the mission of satisfying that global demand.
We dove into some of the technology inside the industry, but what's going on out there is that each one of those businesses and leaders now has service that's very high on their priority list.
There's a lot of businesses that are asking for help for service. I'm just going to continue to focus on helping customers and building great products.
The omnichannel concept of every customer service agent and salesperson having a '360-degree view' of the customer is a familiar meme in business today. But what Salesforce is driving towards with its platform is much wider in scope.
Businesses have moved on from the classic industrial-era customer relationship, in which the prospect was sold a product by sales and then if anything went wrong, customer service dealt with it. Enterprises are reverting to relationships that endure throughout a customer lifecycle — one that may extend across multiple products and services and through decades or even generations of engagement. I say 'reverting' because actually this is not a new model of engagement, it's much the same as an 18th-century trader or shopkeeper would have had, but today's technology makes it feasible to maintain such relationships cost-effectively at scale.
Those relationships are nurtured through giving the customer 360-degree access to enterprise resources so that the outcome they need can be delivered rapidly and efficiently. Yes, when they need to make contact they'll expect that person (or automated process) to have all the information necessary to take action. Often, they'll expect to be able to initiate and complete the action directly themselves (or have it happen automatically, in the case of a connected, self-diagnosing product with a service contract).
Building that 360-degree connection is what makes the Service Cloud opportunity so much larger than the Sales Cloud, although the division is artificial as sales becomes one process within many that sustain the customer relationship. And the need to connect to every aspect of the relationship — encompassing field service, connected products, contracts and billing — is what's driving Salesforce's functional expansion of its platform into adjacent areas, including most recently e-commerce.
There's the added bonus of the service ethos infecting how functions within the enterprise relate to each other, so that IT, HR, finance and so on each need their own on-demand service management infrastructure, though of course there are many other vendors competing to offer those capabilities in each separate realm.
Overall though, there's a 360-degree opportunity for Service Cloud that looks set to continue propelling its growth for several more years to come. We should not be surprised then to discover when Salesforce becomes a $10 billion-a-year company that Service Cloud rather than Sales Cloud will have become its biggest revenue generator.