Tquila - Extracting value from the Salesforce economy

Damian Noonan - Co-founder and Director A/NZ, Tquila

When Salesforce released its first product in 2000, the notion of cloud was almost non-existent.

In truth, the notion of Salesforce was equally alien, such was the vendor’s minuscule market share.

Yet the start of the millennium triggered the early beginnings of a new technology era, an era that would eventually lead to cloud computing, applications and digitalisation.

And now, Salesforce is truly hitting its stride.

Operating as a vendor forever in growth mode, profits are hard to come by for CEO, Marc Benioff, as innovation investments overtake revenue targets.

Yet Salesforce is currently considered as one of the most highly valued American cloud computing companies, with a market capitalisation more than US$55 billion.

It’s a beast of a technology organisation, an organisation that is now turning its sights firmly on the channel.

“Partners help us to broadly extend our resources at scale and augment our team with their specialised expertise,” Salesforce senior vice president of partner programs and enablement Neeracha Taychakhoonavudh said.

“In a world of cloud services, partners are even more critical to ensuring long-term customer success.”

In truth, the channel has been on the Salesforce radar for some time, with the tech giant convincing its partner ecosystem to trade off traditional reselling in favour of specialisation, application building and consultancy services.

The result is a vast army of partners driving Salesforce solutions across the enterprise, spanning independent software vendors (ISVs), digital marketing agencies, consultancy houses, start-ups and global system integrators (GSIs).

“In the high-growth Asia Pacific market, we see partners as having a crucial role in sharing their market knowledge, relationships and advice to accelerate our growth there,” Taychakhoonavudh added.

“We are seeing partners grow their Salesforce practices by more than 50 per cent.”

Today, every single one of the top five system integrators in the world run their business on Salesforce, with Deloitte recently delivering a digital experience for the City of Melbourne.

“To keep up with demand from customers, we will need 10 times the consulting capacity in the next five years,” Taychakhoonavudh added.

“It’s vital that our partners are equipped with the skills, through our partner program, to deliver success for our customers that are increasingly involved in multi-cloud implementations and complex business transformation projects.”

In Australia, Salesforce’s local partner base includes Deloitte, Accenture, Tquila, Bluewolf, Appirio and FinancialForce amongst others.

Partner ecosystem

“The partnership is a natural fit,” Tquila co-founder and director A/ NZ Damian Noonan said. “I’ve been working with Salesforce for more than 10 years and as a business, we understand the technology intimately and how best to utilise this for our customers.”

With teams in Sydney, Melbourne and Brisbane, Tquila consultants are all specialists within this field of technology, with over 100 Salesforce certifications in-house.

“Our partnership is based around three core areas,” Noonan explained. “Driving licensing revenue together by building on our market differentiator, providing relevant certifications and support skills and increasing engagement with our go- to-market strategy.”

From a customer perspective, Tquila specialises in Salesforce implementations and integration with complex back-end and legacy systems, leveraging marketing automation to provide quick data insights to end-users.

With a varied portfolio of clients, the agency predominantly operates in aged care and health, alongside manufacturing, retail distribution, state government and financial services.

Across Australia, Freedom Aged Care, Tyrrells Property Inspections and NEXTDC are considered customers.

“We’re a customer-first business,” Noonan added. “We want to be the trusted advisor and thought leader for our customers. We constantly revise how we can bring different aspects of the Salesforce platform together to get the best outcomes for the customer, it’s customer first and technology second.”

In providing strategy, design, technology and enablement services, Tquila also specialises in digital marketing and mobile solutions, reflecting the evolutionary nature of the channel in Australia.

“We were technology focused but now we’re becoming a digital agency that specialises in native mobile applications, marketing strategies and customer experience,” Noonan explained.

“Initially we also didn’t have an industry focus but we’re changing the way we engage to bring together the best practices from industries to our Centre of Excellence, rather than start from scratch, and then take that to customers across various verticals.”

As Australian businesses grapple with the influx of new technologies in the market, mobile continues to be the tail that wags the dog of the digital business transformation.

Through a desire to differentiate, Tquila has built out a mobile and customer experience practice, which is outside the remit of a conventional Salesforce partner.

“It’s not just about having the right certifications and bodies to do things, it’s about delivering outcomes,” Noonan said. “Because of that, we take a partner, not supplier approach.”

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When assessing its partnership with Salesforce in a channel sense, between vendor and partner, ensuring that alignment is created across all aspects of the value supply chain.

Specifically, partner feedback is always welcome and regularly sought after, with updates going into the product cycles on a quarterly basis.

“Salesforce’s differentiator comes from the innovation cycle compared to other vendors,” Noonan explained.

“You will see a tight loop in the cycle and our secret sauce comes from providing that in-depth technical expertise, coupled with business acumen targeted towards the customer.

“What lies in the DNA of Salesforce and our ecosystem is to start simple and build on success. There aren’t many big bang approaches anymore.

“We have customers that want to do so many things but we reel them back in if they aren’t ready and educate them on where they can start first, in a simple manner, then evolve and scale upwards at a later stage.”

Salesforce economy

From a partner perspective, the vendor recently launched the Salesforce AppExchange Partner Program, designed to accelerate the ability of any developer, start-up or ISV to build, market and sell intelligent applications.

“The convergence of AI, IoT and massive datasets has created incredible new opportunities for developers to move beyond the app— and build components, intelligent bots, data streams and more,” Salesforce executive vice president of AppExchange Leyla Seka added.

“The new AppExchange Partner Program empowers the next generation of Salesforce ISVs with a single destination for everything they need to succeed—the training to create solutions on cutting- edge Salesforce technology and the programs to turn them into businesses with global reach.”

The Salesforce AppExchange, the world’s largest and longest-running enterprise app marketplace, is home to more than 3,000 solutions for sales, service, marketing and more that have been installed more than four million times.

Nearly 90 per cent of the Fortune 100 have already installed apps from the AppExchange.

The result of such mass adoption is an applications economy bursting at the seams, driven by cloud and customer demands.

According to IDC research, Salesforce and its global ecosystem of partners will enable the creation of 1.9 million jobs within the Salesforce customer base from the use of cloud computing between 2015 and 2020.

During this same time frame, the Salesforce Economy — as it is known — will enable the creation of more than 2.8 million indirect jobs, or those jobs created in the supply and distribution chains serving Salesforce customers, as well as from new company employees spending money in the general economy.

In short, it’s a market set to accrue new business revenue of US$389 billion, through realising the potential of cloud.

“The Salesforce ecosystem revenue is three to four times bigger than Salesforce itself,” IDC senior vice president John F. Gantz said.

“Because organisations that spend on cloud computing subscriptions also spend on ancillary products and services, from additional cloud subscription and professional services to additional software applications, hardware, and managed services.”

Gantz said that for the most part, every cloud subscription sold is accompanied by other products and services, including additional cloud- based subscriptions (such as storage or security), additional applications to increase productivity, (such as digital signature or administration), or even hardware or networking.

Consequently, by 2020, for every dollar Salesforce makes, the company’s ecosystem will achieve US$4.14.

“If Salesforce merely grows at the rate of the cloud computing adoption, that means that the ecosystem will pull in more than US$100 billion in new revenue from 2015 through 2020,” Gantz added.

As the ecosystem expands at a rapid rate, partners are in hot pursuit because in addition to the chance to double revenue over the next five years, Gantz said partners continue to report “significant returns” from working with Salesforce.

Specifically, using the Salesforce App Cloud development tools cut the Salesforce partners’ development time by 31 per cent compared with deploying traditional development methods.

Furthermore, using the Salesforce App Cloud allowed partners to cut the cost of quality assurance by 34 per cent and decreased time to market by 32 per cent, while leveraging the Salesforce AppExchange allowed the channel to improve sales closing rates by 15 per cent.

“Since joining the Salesforce partner program, the average partner respondent reported an annual revenue growth of 38 per cent, and for the next three years, they expected annual revenue growth of 45 per cent,” Gantz added.

It paints a lucrative picture for the channel, as cloud creates new revenue streams for partners across a range of industries and sectors.

“Cloud computing is now a strategic technology for companies of all sizes,” Taychakhoonavudh said. “You cannot find a CIO or even a CEO that not is thinking about how to be nimbler and leverage data to better serve their customers — and deploying in the cloud makes that an attainable goal.

“Salesforce’s growth rate reflects that trend, and we need partners more than ever.”