With its industrial clouds growing much faster than its business clouds, Salesforce is making “huge” investments in its solutions vertical market as it seeks to put even more distance between itself at the top of the Top 10 and # 2 in the Oracle Cloud Industry and #3 Google Cloud.
Saying that Salesforce customers are “increasingly focused on time to value and reducing their implementation costs,” co-CEO Bret Taylor said Salesforce’s 12 industrial clouds meet both of these requirements. customers and was “another bright spot” in the quarter ended July 31.
“The out-of-the-box industrial processes we’ve integrated into our industrial clouds are a compelling value proposition in this more measured environment and I’m excited about the new processes we’ve brought to market in the first half of the year. year, including Trade Promotion Management for Consumer Goods, and our Virtual Assistant for our Financial Services Cloud.
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These new solutions give an indication of the deep and specific functionality provided in this hot part of the market, and Taylor said Salesforce will continue to invest aggressively to meet growing customer demand for these purpose-built industry applications and solutions.
“You might think that our Industry Cloud basically takes Customer 360 clouds – Sales, Service, Marketing, E-commerce, Tableau, MuleSoft, Slack – and creates industry-specific processes and workflows that work right out of the box. out of the box,” Taylor said on Salesforce’s second-quarter earnings conference call late last month.
“There is a lot of value for our customers. First, they don’t need to pay us or a professional services firm to implement the table stakes for their digital transformation – it just works out of the box, meaning they can focus their investment resources in areas of their business that are differentiated,” Taylor said.
“That means they get time to value faster and those processes are stickier, which is why our industrial clouds have lower churn rates than our business clouds. »
Lower attrition rates — very interesting. Given Salesforce’s continued success in a wickedly competitive market, I suspect its trade attrition rates are pretty low, to begin with — and Taylor says industry clouds have been even more successful among customers.
With all these arrows pointing up, Salesforce is increasing its investment in this dynamic new area, which I believe will be, over the next 2 years, the hottest category in the fastest growing market the world has. never known.
Industrial clouds have been “a huge area of growth for us,” Taylor said on the earnings conference call, pointing to Salesforce’s acquisition of Vlocity a few years ago. Continuing the “huge” theme, Taylor said industry clouds are “a huge area of investment for us.”
Taylor also tapped Salesforce chief product officer David Schmaier, who founded Vlocity and whose rapid rise to head product development indicates just how strategic Salesforce believes industry clouds are.
“It’s a big part of our strategy going forward,” Taylor said before asking a hypothetical question that powerfully underscores the company’s confidence in this dynamic new category: “If you have an option to buy one of our industrial clouds, why wouldn’t you? They work right out of the box, and you’ll get a faster time to value. »
He also touched on what business customers tell me are their biggest concerns about industrial clouds: that the big cloud providers need to make it absolutely transparent for customers to work on these purpose-built industrial applications and the traditional horizontal applications that these providers have been offering for years.
“I think the thing we do in a really unique way – and Marc [Benioff] alluded to earlier – is that really all in one integrated platform. If you purchase our Financial Services Cloud, you get all the capabilities of our Salesforce Cloud, Service Cloud, or Customer Data Platform in a single, integrated technology platform. »
This seamless integration and the benefits it offers businesses in these tough economic times makes industry clouds even more attractive, Taylor said.
“It’s very unique in the industry and I think in this more measured buying environment it will become even more important, although in fact it was important before that as well,” he said, again referencing the new “Salesforce focus on delivering faster time to value to our customers”.
Later today, as Oracle releases its fiscal Q1 results, we’ll likely hear more about its aggressive industry strategies, and no doubt the intense rivalry Oracle and Salesforce have had over the decade or more will only intensify.
As always in Cloud Wars, the big winners will be you, the customers.
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