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Tuesday, April 23, 2013

Salesforce Wants to Remake Marketing — and Itself

The head of Salesforce.com has what he hopes will be a major new product. What he really thinks it is about, though, is remaking his company for the age of social media.

“All of us have to become connected companies, changing fundamentally how we sell our products to customers,” said Marc Benioff, the founder and chief executive of Salesforce.com. Trends like social networking and mobility, he says, “are the future of computing.” He added, “Everyone has to move to being a connected, customer-oriented company.”

To that end, on Tuesday Salesforce announced the creation of a new product line, Social.com, which is software to automate the way a company’s potential customers are found, analyzed and sent personalized ads over social media like Facebook and Twitter. Over the longer term, Mr. Benioff said, he will change how Salesforce products look and work.

For the announcement of Social.com, Mr. Benioff prepared a 90-minute presentation on the forces he says are fundamentally reshaping how business must work.

He sees seven major trends: social media; mobile devices; large amounts of data analysis; self-organizing communities at work and in society; software apps from industrial organizations as well as consumer companies; cloud computing; and what Mr. Benioff called “the human factor, how we are connecting and how we build trust.”

In part, we are connecting by using big computers. Much of the social media marketing jobs of Social.com are now done with a lot of humans in the process, but that is insufficiently quick or far-reaching enough for a big company. Companies involved in the Social.com announcement include Ford and Omnicom, an advertising conglomerate that works with some of the world’s largest companies.

The announcement deepens as well what has been a significant transition in control of information technology assets at many companies, from IT departments, to customer-facing managers.

It also marks a closer integration into Salesforce, which sells software to manage things like sales leads, contacts and customer service follow-up, with some of its recent acquisitions.

In 2011 Salesforce paid $326 million in cash and stock for Radian6, which monitors and analyzes conversations on social media. Last June Salesforce bought Buddy Media, which helps marketers publish content and place ads in social media, for $689 million in cash and stock. Just before the deal, Buddy Media had bought Brighter Option, an ad purchasing and management company.

Last October, Salesforce laid off some of the Radian6 employees, and disclosed losses at Buddy Media before it was bought, leading many analysts to speculate on the role these companies could play in Salesforce’s core business.

For Mr. Benioff, the integration of the two outfits is not about absorbing their woes, but keeping Salesforce up with the times. Awareness of leads, selling in a way that is more personalized and better customer attention, he said, are all necessary in the new world.

“There isn’t a business customer I see who doesn’t have the same problem,” he said in an interview before the announcement of the new product. “How do you market, service and sell to customers?” Within Salesforce itself, he said, this means building enterprise software for mobile products, being capable of understanding in real time what customers are doing with the products they have purchased, and staying in constant, and appropriate, contact with customers.

“We’re rebuilding our software” to work in a world of mobile devices and social networks,” Mr. Benioff said, and increasing the transparency of communications within Salesforce itself by allowing common access to lots of corporate information. “By our Dreamforce conference in November we will have the whole thing done, I think.”

Mr. Benioff is one of the most relentless, and successful, promoters in tech, but that doesn’t mean we shouldn’t pay attention to what is going on here. He has also been an incisive technology entrepreneur, building Salesforce into the first multibillion-dollar online software business. Companies like SAP and Oracle at first ignored him, then dismissed him, then finally purchased cloud-based software companies of their own.

Now, he says, selling cloud-based software that works well on personal computers for conventional organizations is not enough. The changes he is talking about mean that companies must be aware of the way their own employees now get work done, and how powerful and aware customers have become.

And, if what he is doing creates a new challenge to SAP and Oracle, while Salesforce is again seen as cutting edge, that is probably fine with Mr. Benioff.