Salesforce decided to round out its suite of CRM applications by acquiring an eCommerce platform. Sound familiar? Well, it should. In fact, it was less than two years ago that Salesforce acquired Burlington, Massachusetts-based Demandware. For those of you following at home, you might find yourself asking the very appropriate question of “why would Salesforce buy another eCommerce platform?” Let’s explore that question, and why buying Chicago-based CloudCraze was a very good move.
Why CloudCraze? Why Now?
For years, Salesforce has been pushing the boundaries of what CRM is. From its inception, the vendor has been about sales force automation; since then, it has expanded into customer service, marketing, analytics, and even eCommerce. But even with all of the organic and inorganic growth, there were still holes in this larger CRM canvas, namely B2B eCommerce. You’ll notice I added the caveat of B2B in front of eCommerce. That’s because this space is fundamentally different than the B2C space, which Commerce Cloud (formerly Demandware) occupies; just to start, there are customer-specific catalogs and pricing, there are a wide array of relationships on both the buy and sell sides, and you’re operating across a multitude of complicated and sometimes conflicting channels.
But An Acquisition?
Many in the market saw the Demandware acquisition (worth an estimated $2.8 billion) as being the definitive sign that Salesforce was done making acquisitions in the eCommerce space. After all, it had Sales Cloud, Community Cloud, Salesforce CPQ, and Commerce Cloud — in essence, the pieces required to build B2B eCommerce. But it’s a little more complicated than that. For starters, those products are on different platforms and don’t benefit from the Salesforce platform the way CloudCraze does. Secondly, CloudCraze already has notable customers like Coca-Cola and Adidas on its books. This means Salesforce can turn around and sell CloudCraze to its B2B clients as soon as this deal closes.
What It Means
For Salesforce: Salesforce put forth a vision for the future of CRM; it’s expansive but still revolves around the customer and the many touchpoints — both physical and digital — that the customer has. This is Salesforce definitely putting its money where its mouth is and making a statement that B2B is as important to the business as it was in 1999.
For Salesforce customers: Salesforce customers, especially those bought into the platform vision, no longer need to worry about what to do for B2B eCommerce. There will no longer be any confusion around partnerships or multiple deals written on different paper. It means there’s no risk in selecting CloudCraze for your B2B eCommerce platform. It also means that you’ll be able to activate insights across your commerce, marketing, sales, and service channels much more easily.
My PoV: This is a great acquisition for Salesforce. Salesforce will recoup what it paid for CloudCraze (presumably a lot less than Demandware) in no time. For comparison, its CPQ presence exploded when it acquired SteelBrick for $360 million. Given the underlying architecture and data models, I expect Salesforce to monetize this investment immediately and to begin to tell a very compelling omnichannel story for B2B. And expect CloudCraze to reap all of the benefits of being inside Salesforce, including increased investments, access to more development resources, and inclusion in the Einstein road map.