New Services, No Silos A salesforce.com Vision for the Next 15 Years

Peter Coffee

VP for Strategic Research

salesforce.com inc.

Good Morning

Let’s review exactly what you were promised

• The cloud is now the mainstream. Congratulations. That means it’s no

longer special to be cloudy.

• What’s needed now is a re-thinking of what IT does.

– Let legacy IT incumbents relocate past century’s silos to past decade’s server farms.

– The salesforce.com community is already re-inventing business processes…

…around the informed and elevated expectations of cloud-native collaborative

customers and their connected things.

The present facts, the near-term implications, and the opportunities

and challenges of continued leadership above the cloud

•The cloud is now the mainstream...

Ten Years After the salesforce.com IPO

“The cloud is no

longer a niche –

it’s how

companies do

business.”

Remember Those Things Called “Personal Computers”?

Negative slope

This Revolution Will Be Tabletized

What Does It Mean…When People Prefer the 2009 Release?

They’re Not Asking for a “Portable Desktop”…

What did we get from

a “desktop metaphor”?

• Direct manipulation

• WYSIWYG authoring

•Work on computers

“the way we work in

real life”…?

They’re Asking For Today’s Way of Work in Their Hand

In 2014, we don’t shuffle

“documents” on “desktops”

• What you’re doing

• Who else is doing it

• What’s valued by the team

• What’s already been done

• What’s new to share

• What’s new to show

• What’s now to decide

• What should happen next?

•The cloud is now the mainstream.

Congratulations*

* After you win the revolution…you have to govern

“The Cloud” Was About IT: “Connection” Is About Customers

Connection Creates New Communities…and New Behaviors

“The game, called EteRNA, allows players

to remotely carry out real experiments to

verify their predictions of how RNA

molecules fold. The first big result: a study

published this week in the Proceedings of

the National Academy of Sciences,

bearing the names of more than 37,000

authors – only 10 of them professional

scientists.”

• Old Customers:

– Prospects get content from Marketing

– Buyers negotiate terms with Sales

– Customers raise issues with Support

• Connected Customers:

– Prospects seek insights from customers

– Buyers collaborate on competitor research

– Customers tell the world when they’re not happy

• Companies need new organizations & processes

– Every employee/contractor/partner is a spokesperson/avatar

– Power to address issues must be pushed to edge of organization

– Collaborative response must be available on demand

Connected Customers Rewrite the Rules

• Old Customers:

– Limited knowledge of realities of risk

– Coarse pooling of risk based on gross and inaccurate data

– Limited opportunities for risk diversification

• Connected Customers:

– Enormously greater visibility of comparable customers

– Real-time information available to all

– Superior data trumps economy of scale

• Financial Services differentiate with:

– Exceptional domain-specific expertise

– Superior ability to analyze (and price) risks

– Proven advantage in first-call responsiveness

For Example: Financial Services in Era of Customer Control

• Old Customers:

– The brand controls the messaging and defines the offering

– Only the most informed customers bargain from knowledge

– Profit margins opaque to customers

• Connected Customers:

– The customer community becomes “the brand”

– Customers can engage in real-time research in-store

– Generics/“off brands” compete with name brands

• Retailers and brand names differentiate with:

– Aspirational image and associations (e.g., Burberry World)

– Effective shift of conversation from price to value

– Positioning as superior solution: customers Google the problem, not the product

Retail and CPG: Assume The Customer Knows Everything

• Old Customers:

– Current research and cost information accessible only to professionals

– Geographic monopolies of care providers and payment services

– Employer-paid group plans with coarse pooling of risk groups

• Connected Customers:

– Freedom to explore alternative therapies and providers

– Ever more individualized knowledge of health record and risk

– Given perfect knowledge, what is “insurance”?

• Health Services differentiate with:

– Superior preventive and lifestyle counseling and assistance

– Pricing options reflecting broad range of customer preference

– Leading-edge adoption of informatics technologies reducing non-value-adding costs

Health Care: Graying Societies in ACA (“Obamacare”) Era

In an announcement on Thursday, Salesforce and Philips,

the Dutch electronics maker, are jointly announcing what

they call an “open cloud-based, health care platform.”

The foray into health care is a significant step by

Salesforce into a specific industry, as opposed to

supplying offerings that span industries, like customer

relationship management software as a service…

There have been other high-profile cloud entries in health

care, notably Google Health, a personal health records

initiative, which opened in 2008 and was shut in 2011. But

Salesforce is an enterprise cloud company and it is

taking a very different approach. Its initial move, with

Philips, is to focus on a specific target in health care —

using technology to manage chronic ailments.”

Breaking News

•What’s needed now is a re-thinking of

What IT Does

What is an “application” anyway?

• Old “applications”: – Data captured as by-product of business activity

– Function driven by familiar business tasks

– User experience an afterthought

– Built by programmers; judged on cost & efficiency

• New “apps”: – Data captured through algorithms of discovery

– Function driven by customer delight

– User experience a top priority

– Apps built by front-line business units; judged on ROI

What Should Be in Your App?

• White Pages world

– Prospect looks up your company

• Yellow Pages world

– Prospect reads the ads in your category

• Connected Customers world:

– Prospect Googles for help with the problem

• If you don’t come up on first page, you don’t exist

• If network doesn’t validate you, you don’t get called

– Prospect searches the App Store

• Your app needs to solve problems…

…not just sell products

• Don’t let them forget you between transactions

“A study commissioned by salesforce.com

suggests that 60% of British employees now

use apps on mobile devices for work-related

activity and nearly a quarter (21%) use

dedicated department-specific business

apps… Enterprise apps boost worker

productivity by more than 34%.”

Apps Aren’t Just for Customers

•Let legacy IT incumbents relocate the

past century’s silos to the past decade’s

server farms. The salesforce.com community is

already re-inventing business processes…

• Legacy Platform (wherever it sits):

– Application development suite defined by a legacy IT vendor

– Specific languages, libraries, operating systems and software stacks

– Chosen by technologists; consumed by developers and sysadmins

• Connection Platform (intrinsically cloud):

– Marketplace of services, interacting via non-proprietary protocols

– Mandate to add value to in-place investments while enabling innovation

– Adopted by business units as side effect of getting stuff done

– Consumed by “power users” and line-of-business experts

• Opportunities for Action

– Look for a spreadsheet/database/document with email wrapped around it:

that’s a Force.com application begging you to write it

– Ask how many representations you have for each customer: why not get that down to one?

Redefining “Platform”: Customers Will Decide

Why Settle for Migrating Yesterday’s Disappointments? Multiple Independent Studies Agree: Force.com is a 5× Faster Path from Idea to App

Idea Build App with

modern frameworks

Idea

buy &

setup

hardware

install

complex

software

define user

access

build & test

security

make it

mobile &

social

setup

reporting &

analytics

build

app

Legacy Platforms (wherever they are)

App

6-12 Months?

Connected

Mobile Apps

Latest IDC Study: Build Apps 70% Faster with Salesforce1 Platform February 2014

Platform

75%

Lower infrastructure

costs

80% More apps launched

per year

Faster time to market

70%

ROI

520%

7 Customers analyzed across 5 different industries

31 custom apps built (average)

2,700 internal employee users representing 89% of employee base (average)

100K external customer & partner users (average)

IDC White Paper, sponsored by Salesforce.com, Salesforce1 Platform: Accelerate App Dev with Huge ROI, Doc #246505, Feb 2014.

Details Intentionally Redacted (Besides, They’re in French)

• With over 30 countries to consider, the team knew that speed, repeatability and

flexibility would be key to their success. As a large customer of AWS, the company

also know that IaaS alone wouldn’t solve their problems: it simply takes too

long to set up all the AWS “plumbing” required for such an expansive project.

• What the customer needed was a platform that would enable them to build highly

customized, highly immersive sites, leveraging the technologies they know and would

need to use in order for the sites to launch successfully. The first is already live.

• This is just the beginning; the company has already started development for the

remaining 29 sites…slated to go live on Heroku next year, along with several

additional countries in the pipeline.

Salesforce1 Platform: The Leverage of Openness

We’ve always enabled options

• Run local code and integrate

• Run Java or LAMP on AWS

• Treat us as an adjunct tool for

» Integration of multi-vendor IT

» Access to handheld devices

• We come as liberators

Openness is a commitment

• Agile deployment for Ruby, Python, PHP, Java,

Node.js, Clojure, Scala and Play

• Get up & running in minutes; deploy instantly with git

• Never again think about servers, instances, VMs…

…because PaaS leverage is essential

Not Another Turn of the Crank. Readiness to Scale.

“The city’s investment can go

further than just merely paying for

a new system. It’ll be able to take

advantage of other apps that work

on the Salesforce platform.”

Trusted. Results. Today.

Legacy IT approach “was overloading the

project with software, overcomplicating the

site with CPU and memory taxing

applications. Servers were constantly

needing to be restarted… Any replacement

for the current software will need to be

vastly more simple.”

"Salesforce has been an incredible tool for

us... We purchased on June 1st, and within

8 hours we actually had published an iPad

application... In about a month, we have

something we can use as a platform that

can evolve with us... rapidly deployable,

works on different devices, highly

configurable..."

Less Stagnation. More Innovation.

Eurostar has rolled out Salesforce CRM to improve customer service for

passengers, replacing a number of applications…The high speed rail service

previously relied on up to 13 applications for call centre staff to deal with customer

complaints, during and after a call.

One of the main drivers…was the upgrade cycle for the software, which

could have resulted in customised features of the software being lost.

“There were no guarantees that the customisations would live through the

upgrade.”

Another is the ability to make changes to the system once it is live. “With

Salesforce, from the idea until it was done, took less than two days. There is

no way you can do that with other systems, because they are not designed to

do that – Salesforce is a cloud system and it is able to be extended.”

By Matthew Finnegan | Computerworld UK |

Published 10:29, 27 May 14

• Let legacy IT incumbents relocate the past century’s silos to the

past decade’s server farms. The salesforce.com community is

already re-inventing business processes around the

informed and elevated expectations of

cloud-native collaborative customers and

their connected things.

Who will take the lead on an

Internet of Customers?

• Companies who connect to

machines?

• Or teams and communities who

relate to people?

• The winners will be those who see the stories in the data

looks at salesforce.com – and sees more than CRM “We asked whether a company had made strides in the past year that will define its field.”

“While many other companies on this list

are building ways for connected devices to

impact industrial and commercial

operations, salesforce.com says that the

IoT presents a new opportunity for

marketers to glean deeper insights into

their prospects and customers.

Connected devices allow chief marketing

officers (CMOs) to learn how their products

are being evaluated and used, what stage

of the process the prospects are in and

potentially what factors influence buying

behaviour. Salesforce.com says IoT is not

just about connected machines; it’s

about connected products and

marketing, too.”

SAN FRANCISCO – June 10, 2014

Salesforce.com (NYSE: CRM), the world’s #1 CRM platform, today launched Salesforce Wear, the

industry's first initiative for wearable computing in the

enterprise. The company also launched the new Salesforce Wear Developer Pack, empowering

developers to kick-start their ability to connect

companies with their customers through apps for

wearables in entirely new ways. In addition, ARM,

Fitbit, Google Glass, Pebble, Philips, Samsung

and others have joined the Salesforce Wear initiative

to accelerate adoption of wearables in the enterprise.

A Month Ago, This Was News

hubaisms.com/2013/08/08/data-scientist-big-data/

Value from Mobile Apps and Wearable Devices Poses Challenges of Science – Wrapped in Compliance

hubaisms.com/2013/08/08/data-scientist-big-data/

• “People making calls or sending text messages originating at the

Kericho tower were making 16 times more trips away from the area

than the regional average. What’s more, they were three times more

likely to visit a region northeast of Lake Victoria that records from the

health ministry identified as a malaria hot spot. The tower’s signal

radius thus covered a significant waypoint for transmission.”

• “This is the future of epidemiology. If we are to eradicate malaria,

this is how we will do it.”

– Caroline Buckee

Value from Mobile Apps and Wearable Devices Poses Challenges of Science – Wrapped in Compliance

hubaisms.com/2013/08/08/data-scientist-big-data/

Value from Mobile Apps and Wearable Devices Poses Challenges of Science – Wrapped in Compliance

Connection’s Concerns are Real

• “A lot of the web services allow

unauthenticated or unencrypted

communication between the devices, so

we’re able to alter the info that gets fed into

the medical record … so you would get

misdiagnosis or get prescriptions wrong.”

• “The physician is taught to rely on the

information in the medical records … [but]

we could alter the data that was feeding

from these systems, due to the

vulnerabilities we found.”

Trust: Without Which Nothing Else Matters

If you think people are touchy

about their money, wait ’til you

know where they were parked

and who else was in the car,

with what kind of music playing

on the radio.

It’s essential to reduce

complexity and to narrow the

scope of privileges – rather

than compounding complexity

and enabling more superusers.

• Password security policies

• Rich Sharing Rules

• User Profiles

• SSO/2-factor solutions

Bottom-Up Design to be “Shared and Secure”

Login… Authenticate…Apply Data Security Rules… View Filtered Content

• …the opportunities and challenges of leadership above the cloud.

• Shared spreadsheets and documents

– Problem to be solved is already acknowledged

– Business logic is already written

– Force.com app replaces an email thread with a real workflow

– Plus mobile capability

– Plus structured collaboration

– Plus superior governance, auditability and integration

• Desktop databases

– Data dictionary is already established

– Force.com app adds improved user experience, mobile access and automatic backup

• Line-of-business users have wish lists

– Problems they’ve had so long, they’ve gotten numb to the pain

– “Hero points” for IT: empower the citizen developer, start solving new things every week

Where Do You Find the Force.com “Apps in Waiting”?

We Need to Create New Value

• In 2010 • 58% of surveyed U.S. consumers said

they’d pay a higher price if they had a

strong expectation of superior service.

• On average, 9% premium would be OK.

• In 2012, 66% willing to pay +13%...

…and 75% said they’d already

spent more with a company in response to

superior service, up from 57% in 2010.

•Connected products can elevate service, from damage control

to proactive customer care

Do Not Think of ‘Clouds’ as Products

• Sales Cloud, Service Cloud and Marketing Cloud are not merely cloud-

based replacements for on-premise products

• Each of them is a “serving suggestion” of a portfolio of services; whatever

you want to change, add, or integrate is at your option

• Virtualization of old technology extends the time that you think in terms of

that technology: virtual servers keep you thinking in terms of servers

• We are discovering sound:

→You can study vibrating molecules for years

→You won’t anticipate what happens when they bump into each other

→You totally won’t imagine music

Do Not Design for Incremental Improvement

• Scott McNealy: “I don’t want to carry a battery, keyboard, display,

storage device, and radio transmitter when I just want to check my mail.”

• Where we’re going: all we actually carry is proof of our identity…

…and the environment knows what we’ll want to know – and do

• Architect your solutions for… Universal, high-speed connectivity

Ubiquitous processing power

Unlimited, intelligently indexed storage

…then adjust to limits of present technology

• The zeros and infinities will never be reached…but you won’t need to rip

up your design and start from scratch every three years

• What got us to where we are…

• …won’t take us where we’re going

“What will be the scarcest, and hence the

most valuable, resource in ‘the second

machine age’? It will be neither ordinary

labor nor ordinary capital but people who

can create new ideas and innovations.”

www.foreignaffairs.com/articles/141531/erik-brynjolfsson-

andrew-mcafee-and-michael-spence/new-world-order

The Challenge Isn’t News. The Answers Are.

• “No U.S. pick-and-shovel laborer can compete with the

work of a steam shovel. The modern industrial revolution is

similarly bound to devalue the brain, in its simpler and more routine decisions.”

• “Taking the second revolution as accomplished, the average human being of mediocre

attainments or less has nothing to sell…worth anyone's money to buy.”

– Norbert Wiener, 1948

• We live and work longer; knowledge lifetime is shorter

• Communication costs less; ignorance costs more

• Jobs need more knowledge; employability takes more time

• Our shared mission: to enable tomorrow’s attainments

Peter Coffee

VP for Strategic Research

salesforce.com inc. pcoffee@salesforce.com

@petercoffee

in/petercoffee

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