Taking out the upstart early shows why Marc Benioff is no Tom Siebel

Profile picture for user slauchlan By Stuart Lauchlan July 13, 2014
Summary:
Tom Siebel didn't take Salesforce.com and SaaS seriously enough 15 years ago and the rest is history. Marc Benioff isn't about to make the same mistake and just bought out a potential future threat.

steveloughlinrelateiq*304xx177-265-0-0
Steve Loughlin

Market leader takes out enfant terrible looking for a fight before it gets big enough to land a serious punch! It’s a sound strategy if you learn the lesson of the past, especially when you were part of that lesson in the first place.

When Marc Benioff was pitching Salesforce.com as the future of CRM 15 years ago, the dominant player in the sector at the time, Siebel Systems, took the lead from its CEO Tom Siebel, looked askance and carried on with business as usual (having screwed up the chance to bankroll the SaaS upstart in the first instance!). The rest, as they say, is history.

Flash forward to 2014 and Salesforce.com is ‘the establishment’ and a new upstart is running around threatening revolution and touting itself to be the future of CRM.

This time around the dominant player in the cloud CRM space is taking no chances, which is why Salesforce.com on Friday laid out $350 million to take RelateIQ out its competitive line of sight before things went too far.

RelateIQ pitches what it calls a "relationship intelligence platform" that can gather and analyzes data from a salesperson’s interactions with contacts, be they email, calendars and smartphone calls, and then takes that data to generate insights that improve the chances of a deal going through.

Co-founder Steve Loughlin wasn’t hiding light under any bushel when he declared on the corporate blog:

Salesforce.com pioneered the shift to enterprise cloud computing, redefining modern CRM as we know it. As you know, RelateIQ is pioneering the next generation of intelligent computing through data science and machine learning. Looking ahead, salesforce.com’s acquisition of RelateIQ will extend the value of salesforce.com’s #1 CRM apps and platform with a new level of intelligence across sales, service, and marketing.

Screen Shot 2014-07-14 at 10.23.34
Everyone was an enfant terrible once

RelateIQ had raised around $69 million in venture funding from backers including Redpoint Ventures, Kleiner Perkins Caufield & Byers, Felicis Ventures, News Corp., AITV, Battery Ventures, Formation 8, Accel Partners, Morgenthaler Ventures, SV Angel and Stage One Capital.

The firm will be positioned as an independent subsidiary of Salesforce.com with Loughlin having a direct line of report to Benioff. According to Venturebeat, it will act as an R&D arm, probably called Salesforce X, and with a data science/Big Data bent.

My take

Marc Benioff is no Tom Siebel.

Of course Salesforce.com is not about to buy up any little firm  with big ambitions and a loud voice.  If it did, a lot of not very imaginative marketing directors might be in for a big bonus, judging by the number of 'the next Salesforce.com' press releases that pass my eyes en route for the trash can.

So, there’s something about RelateIQ that goes beyond the sales pitch and the marketing hype that Salesforce.com can see potential value in.

Analytics Cloud anyone? At last year’s Dreamforce conference, Benioff said that Salesforce.com didn’t plan to move into what he termed the

traditional, horizontal analytics market.

The key word here could be traditional. Salesforce.com has no interest in the traditional HCM space, for example, but its Rypple acquisition gave it a non-traditional HCM sector play.

Some interesting questions to consider in the run up to this year’s Dreamforce perhaps.

 

Disclosure: at time of writing, Salesforce.com is a premium partner of diginomica. 

Related articles