Salesforce.com executives — up to and including CEO Marc Benioff — are known for big ambitions and big talk. Keith Block, who came aboard ten months as president and vice chairman is no different. He thinks Salesforce.com can displace rival SAP as the largest applications company in the universe and also become the third largest enterprise software company overall.
“That’s our goal, we have our sights fixed on that,” Block told reporters and analysts at a Salesforce.com event in Boston on Wednesday. Some caveats: He gave no timeframe and he’s a sales guy, so what else could you expect him to say?
But face it, Salesforce.com has a long way to go. New Gartner numbers, show Salesforce.com broke into the top ten software companies for the first time in 2013 with $3.8 billion in revenue while SAP weighed in at number 4 with $18.5 billion in revenue. Those numbers reflect overall software sales, not just enterprise stuff, but you get the picture — Salesforce.com has a ton of growing to do to back up its words. And I’m guessing SAP would disagree with Block’s prediction.
What was interesting about Block’s talk was that he referred again and again to SAP, the world leader in enterprise-resource planning applications, maintaining that SAP — with its on-premises software roots — has a challenge not only in transitioning its technology but its culture and business model. But he never uttered a word about Oracle, the other gigantic enterprise software power, with strong legacy computing roots. Block spent 26 years at Oracle, where he was most recently executive vice president for North America.
Attacking industry verticals
For now the Salesforce.com master plan is to cultivate opportunities in six key vertical industries: financial services, healthcare, retail, communication/media, public sector and automotive/manufacturing. It will do that by building the customized software itself, partnering with third-party software makers or systems integrators to do it or by acquiring such companies, something Salesforce.com hass proven itself very adept at over the past few years.
And the company has hired key specialists in those fields naming Andy Baer, former CIO of Comcast Cable to head communications/media; Shelley Bransten former VP at The Gap for retail; Patrick Pelata, former COO of Renault, for automotive; and Todd Pierce, former CIO of Genentech for healthcare.
Not to be nitpicky, but this vertical industry formula echoes what other large companies including Oracle have done over the years: build up their software expertise in especially profitable niches. The usual mantra is that the vendor doesn’t want to sell products, but in market-speak, custom “solutions” for those niches.
As mentioned, Block joined Oracle in 1986 and was widely seen as one of the best enterprise sales guys around — both by folks at Oracle and by its competitors. He remained there until running afoul of Oracle co-president Mark Hurd in messages that depicted Oracle’s hardware business as “dead.” Salesforce.com CEO Benioff has said that getting rid of Block was Hurd’s biggest mistake, and one Benioff was only too happy to capitalize on.