They come in threes, don’t they? In the last week, I have read three pieces which have my hype antenna buzzing about Salesforce
- IDC in an annual study commissioned by Salesforce says the ecosystem of customers and partners will drive the creation of 3.3 million new jobs and more than $859 billion in new business revenues worldwide by 2022. In addition, by 2022 the Salesforce partner ecosystem will gain $5.18 for every dollar Salesforce earns. To generate revenue you need a product, you need a business model, and you need a customer channel. You need more like a strong brand but let’s stay with those three. Salesforce does not help companies build products or services. Foxconn, Flex, IDEO and many Tier 1 and 2 suppliers do. It does not help you with your business model or order entry or billing. It does help you with your channel, but far less than you may think. It helps with direct sales force automation, much less with resellers, franchisees, store or ecommerce sales. It helps with digital marketing but the world still spends way more on trade promotions and analog advertising on TV, billboards and other media. So taking credit for generating customer revenues seems to be a stretch. As for the ecosystem, 5X for every dollar spent on Salesforce is actually not something to be proud of. Because that does not include internal staffing costs customers need to factor on top. Pretty soon you are looking at SAP Nation type numbers. For a very small part of the enterprise coverage SAP gives its customers. I am not sure why Salesforce brags about that and keeps showing larger numbers every year.
- John Sumser is his recent report on “intelligent HR software” comments “We were unable to find actual Al, but that doesn’t mean that the work is not important—it means that calling it Al distracts from the value that these companies are creating.”. Bluewolf, now part of IBM, has issued its sixth State of Salesforce report and should have heeded John’s advice. The report is intensely focused on the term AI. I would have liked to see actual, real life use cases. It is light on such examples but does cite how AI from Salesforce and IBM helped in creation of the report itself
“….we asked Einstein to analyze specific data sets to discover patterns based on demographic information, including region, role, company size, and industry, and to quickly capture trends among Sales, Service, Marketing, and IT respondents. Simultaneously, IBM Watson Discovery scanned news sources, attaching a sentiment rating to the top trends we identified by using Einstein Data Discovery. These analytics enabled us to validate insights from the data.”
Isn’t that good use of analytics, not AI? Frankly, I would like to see how IBM/Bluewolf are using AI to streamline their own consulting labor and to reduce the 5X cost IDC describes above.
Now on to the hype. To make sure you realize AI is hot, the report uses the term AI over 75 times in its 66 pages. As an innovation author, I was excited to write about advances in AI in my book on automation, Silicon Collar. But I also pointed out we just make incremental progress every few years.
“(1950) is when Alan Turing defined his famous test to measure a machine’s ability to exhibit intelligent behavior equivalent to that of a human. In 1959, we got excited when Allen Newell and his colleagues coded the General Problem Solver. In 1968, Stanley Kubrick sent our minds into overdrive with HAL in his movie, 2001: A Space Odyssey. We applauded when IBM’s Deep Blue supercomputer beat Grandmaster Garry Kasparov at chess in 1997. We were impressed in 2011 when IBM’s Watson beat human champions at Jeopardy! and again in 2016 when Google’s AlphaGo showed it had mastered Go, the ancient board game. Currently, we are so excited about Amazon’s Echo digital assistant/home automation hub and its ability to recognize the human voice, that we are saying a machine has finally passed the Turing Test. Almost.” There are plenty of other reality checks in the book.
- While the two above were commissioned by Salesforce or a partner, they likely only provided fodder for the third one, an article from Business Insider on preparing for Dreamforce next week. 1,000+ words later you will not have a clue about product direction or announcements, but you get invaluable advice like “Plan to party hard” and “ Pack a portable charger – or two”. Whatever, but the hype comes in the disclosure that the event will offer 2,700 sessions and attract 170,000 attendees. Oracle OpenWorld had 2,500 sessions and 60,000 attendees and they offer a much wider range of IaaS, PaaS and on=premise products. And navigating 60,000 attendees was exhausting enough. 3X that? Who exactly do they think they are impressing? Especially when the article warns you to be prepared to pay $ 900 per hotel night.
I will try and catch some live-streamed Dreamforce sessions and hear what my fellow analyst colleagues have to say. Some day soon, I hope I can get briefed by Salesforce in a much smaller setting. And hopefully without all the hype.
(Cross-posted @ Deal Architect)