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Friday, August 23, 2019

SalesForce.com & Success

Salesforce.com foresaw a world where customers would “rent” software from the connected internet, also known as cloud computing.  Today, we cannot imagine a world without cloud computing, which powers almost everything we do, from entertainment, to work, to collaboration, to basic human contact.  But, in the times before Salesforce.com was created in the late 1990s, consumers would manage and interact with almost all computer software at a local network level.  Discs would be provided once you purchased software, which would allow you to download the current iteration of that product.  This product would then sit locally on your computer, and only your computer.  You would pay a large, one-time fee at the initial purchase and then each time you wanted to update a product.  Update cycles were often annual affairs.  Even if a cloud-like service could exist at the time, (slow) internet speeds would make it a very frustrating product.  

Founder Marc Benioff was able to visualize a future of where lightning-fast internet speeds would be the norm, and then leverage that knowledge to see that consumers in the future would welcome software subscriptions from a centralized platform.  This virtuous cycle would then make the product even better because software/platform updates could be distributed and pulled down in much faster increments.  

The company was also extremely customer-focused, building beautiful interfaces, welcoming and acting on customer feedback, and continually innovating and iterating the product.   And while its core product was excellent, Salesforce.com was not shy about acquiring new companies to bolster its offerings, including 19 companies alone between 2010-12.  

Salesforce.com does not rest on its laurels, either.  It is always working to improve its products, pivot towards new ones, and relentlessly seek new customers.  According to a case study about the company, it “spends 7 percent of revenues on research and development and an astonishing 53 percent on marketing to help generate leads and new customers.”  

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