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As part of his ongoing series of roundtable interviews, Brent Leary talks to leading experts from the world of CRM and social CRM about topical issues. This month his panel explores the implications of Salesforce.com's acquisition of Radian6.
This roundtable session's panel consists of...
- Brent Leary: Brent Leary is a crm industry analyst, advisor, author, speaker and award winning blogger. He is co-founder and Partner of CRM Essentials LLC, an Atlanta based CRM advisory firm covering tools and strategies for improving business relationships. In 2009 he co-authored Barack 2.0: Social Media Lessons for Small Business. Recognised by InsideCRM as one of the 25 most influential industry leaders, Leary also is a past recipient of CRM Magazine's Most Influential Leader Award. He serves on the national board of the CRM Association, on the advisory board of the University of Toronto's CRM Center of Excellence, and on the editorial advisory board for The Atlanta Tribune. Leary writes a regular online column for Inc. magazine, and blogs at BrentLeary.com. He can be found on Twitter at http://twitter.com/BrentLeary.
- Denis Pombriant: Denis Pombriant is a well-known analyst at Beagle Research Group and thought leader in the CRM space and writer for CRM Magazine. He conducts research in emerging areas of front office technology and business and he consults regularly to many of the leading companies in CRM. His latest book is “Hello, Ladies! Dispatches from the Social CRM Frontier.” He is a frequent speaker on CRM topics and gave the keynote address at the 2010 CRM Evolution conference.
- Paul Greenberg: Paul Greenberg is author of CRM at the Speed of Light and president of The 56 Group. He is also managing partner/CCO of BPT Partners, executive vice president of the National CRM Association and co-chair of the Rutgers CRM Research Center.
- Michael Fauscette: Michael Fauscette leads IDC’s Software Business Solutions Group which encompasses research and consulting in enterprise software applications including ERP, SCM, CRM, PLM, collaboration and social applications and cloud computing. He also provides thought leadership in the area of social applications and the transition to the social business. Prior to joining IDC, Michael held senior consulting and services roles with seven software vendors including Autodesk, Inc., PeopleSoft, Inc. and MRO, Inc.
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Brent Leary: Hello this is Brent Leary and this is our second MyCustomer.com Social CRM Roundtable conversation. The first one was really great and this one is going to be just as great because we have three outstanding analyst experts in the industry and before I tell you what we are going to talk about, let me tell you a little bit about them. Let me introduce them.
Mike Fauscette runs IDC Enterprise Research and specializes in emerging trends in the internet enterprise, focused on social business. Mike, thanks for joining me today.
Mike Fauscette: Thanks Brent.
Brent Leary: Denis Pombriant is the managing principle of Beagle Research and Denis is also a big Boston Red Sox fan. I just thought I would throw that in there. Denis, thanks for joining me today.
Denis Pombriant: Go Sox.
Brent Leary: {chuckles} Of course, last but certainly not least, probably Yankee Fan # 1, but also author of the bestselling book CRM At The Speed Of Light and President of the 56Group, Paul Greenberg joins me. Paul, thanks for joining me today.
Paul Greenberg: Yeah, okay.
Brent Leary: Like you don't join me every day. I totally get that. I am just glad that we are able to do this roundtable conversation after a Yankees opening day victory, let's just put it like that.
Paul Greenberg: Good idea.
Brent Leary: The topic, the conversation of the week around social CRM has been the announcement that Salesforce.com bought Radian6. Of course, Salesforce is one of the leaders in the space. Radian6 is one of the leaders when it comes to social media monitoring. The deal was reported to be around $326M for the acquisition. Lots of chatter, no pun intended, around this whole deal. So let me start things off with Mike and we will wrap around to Denis and then Paul. When you first heard the deal went down, what was your first impression? Mike?
Mike Fauscette: Well, actually we internally had been taken bets on this deal for probably four weeks, since Radian6 announced their deeper integration with Salesforce's Service Cloud and their Chatter integration and I had heard some rumors about it for a bit, so I thought based on what Salesforce had done over the last year or so that they were working on trying to do this. I thought; "Oh, good, it's about time."
Brent Leary: Okay Denis, what was the first thing that jumped in your mind when you heard it?
Denis Pombriant: Well, I thought it was good for both companies. I thought it filled a hole that Salesforce had in its product line and I think it fits in well with the ServiceCloud and the SalesCloud and Chatter - all of which leverage cloud wisdom in one way or another to improve business function and business performance.
It fills a hole that Salesforce had in its product line and I think it fits in well with the ServiceCloud and the SalesCloud and Chatter.
Brent Leary: Paul?
Paul Greenberg: Well, I am going to tell you the second thing that jumped into my mind because I can't repeat the first one…
But, I am pretty much in the same ball park as Denis. First of all, from the standpoint of Salesforce, let's put it this way, it fills a hole that they did have. It wasn't like “oh my gosh” if they didn't have this they wouldn't survive or move on, but it adds to their capabilities and they got the industry leader.
For Radian6, I think some of the value is that they are a young company, they are culturally young. I was at their headquarters in January and I swear I saw maybe half of their employees, which is about a hundred, and I am twenty years older to the one closest to me. This will help them, let's say, mature better. It will give them to access to markets that they didn't have. It will enhance the capabilities and given their game plans, I think there is a lot that they will bring to Salesforce's table that will get, let's say, researched and done quicker because Salesforce can back it up better.
Brent Leary: How will Salesforce be able to bring Radian6 into the fold?
Paul Greenberg: The cultural integration or the technical one?
Brent Leary: Let's do them both. Where do you see this thing? How do you see them bringing this all together, both ways?
Paul Greenberg: The technical one, they are already doing. That is already announced for that matter. I can't speak to how good or bad it is, because I haven't seen it in action yet, but I am sure that it is competent. They have a very good R & D team, product development team at Radian6, run by Ryan Strynatka but culturally it is going to be kind of tricky.
Both companies have a reputation for being cool, but their coolness, so to speak, do not a cultural integration make. Also, they are very different companies in terms of cultural. Again, Radian6 is extremely young culturally. Salesforce is a corporate cultural, despite all of the public coolness that they have. They are a mature corporate culture, too. Radian6 isn't used to that. So, their way of operating and Salesforce way of operating are entirely different. That said, they are maintaining their independence, so that will help them I suspect, but I am really not sure that it's going to be a simple path to cultural integration, I think that is going to take some time and effort. I think it will be accomplished, but it is not going to be without some pain along the way.
Brent Leary: Denis, what are the challenges that you think are going to be most critical for them to overcome to get this right?
Denis Pombriant: I hope they launch a services initiative that focuses on improving business processes through listening to customers. That is very different from a services arm that implements technology only.
With the community orientation that Radian6 brings, Salesforce can legitimately claim leadership in all phases of social networking applied to CRM. We have seen it with Chatter and the Service Cloud and the Sales Cloud. It should use this to disseminate its thought leadership and I think if they go in this route, it will be something that very few, if any of their competitors are offering right now.
I hope they launch a services initiative that focuses on improving business processes through listening to customers.
Brent Leary: Mike, what do you think?
Mike Fauscette: Well, I think, first of all, socialytics, or the use of social data in the enterprise is really hot and certainly I think it is going to be one of the biggest benefits that companies are going to see when they start to use some of these social tools - the idea that I can take socially generated data and match that up with enterprise data. You kind of have both sides of this start to come together. You have Radian6 at a good collection point and a good analytics platform from a socialytics side and then certainly Salesforce has a lot of that transaction data. There could be some really interesting synergy there. They have already done the integration with the ServiceCloud and Chatter. I think that is an advantage, they start already from a position of some strength, although as Paul said, I haven't seen it, I think it's probably good but I don't know that personally.
They certainly have to spend some time doing some integration in the Sales Cloud and that's going to take a bit because there is a lot of opportunity there to try to take some of this social data and build that into a social sales intelligence tool. I think that is a good thing.
I think there are a couple of opportunities that we haven't mentioned yet - the idea that they can take Radian6 and insert that into the Force.com platform and make socialytics available to their partners downstream in other types of applications. I think that could be really interesting from a partner and a customer perspective. The idea that Chatter is already integrated into the Radian6 engagement console is going to be a big help on both sides from that stand point, although, frankly I think that Chatter has some limitations since it is still a firewall constrained application. It doesn't reach out to partners or suppliers and it's not a tool that you can use to build a whole ecosystem, to build inside the enterprise today.
Overall, I think that the products, it makes a lot of sense to me, but as Paul and Denis both mentioned, I think the culture is going to be a challenge. Both of the companies have a bit of edge and I think that is a good thing. It certainly, if you are the best, you can act like the best and that is not a bad thing. But sometimes when two of the best companies come together the culture doesn't necessarily turn into the best. I think they definitely have to spend some time around how do we integrate this and how do we make things work better between the groups. Now, they have already done some partnership work together, so maybe that cultural differences will turn into real opportunity and synergy for them, but I guess we will have to see.
I think the culture is going to be a challenge. Both of the companies have a bit of edge and I think that is a good thing.
Brent Leary: Yeah, a lot of interesting points there, a lot of things to consider. I am sure people are doing just that, considering the possibilities. Denis, I want you to go first here and give me who you think are the biggest winners and losers. It could be Salesforce, it could be Radian6, it could be customers, it could be a competitor, but who do you think stands to gain the most and who do you think stands to really be challenged by this move?
Denis Pombriant: Well, it's a great question. I don't know if there are really any losers in a situation like this. I think it is important to remember that this is all in front of us, it's all potential. In other words, it’s Salesforce's deal to mess this up. If all goes well, it should be beneficial to many parties. The customers should be the primary or biggest beneficiaries. You don't do something like this without focusing on the customer because any benefit to the companies start with providing benefits to the customer.
Customers should benefit from having a well thought out and new approach to a dynamic marketplace and it really is a dynamic marketplace that is crying out for new approaches to dealing with customers. I think early adopters will benefit most, obviously.
As far as the competition is concerned, if this doesn't work out they will benefit in a relative way, but I think they will also benefit as fast followers, those that want to be fast followers… if Salesforce shows a clear path to a new revenue producing opportunity. It would not be the first time that's happened.
Finally, I think there should be nothing stopping a company, for example Microsoft, from integrating with Radian6, if its customers want that. The last time that I spoke with Brad Wilson (GM of Microsoft CRM), on a slightly different subject of Chatter; he said that they would work with Chatter if that's what their customers wanted, as long as Chatter offered an industry standard API. I think I expect that's the kind of reaction that the rest of the industry will afford to Radian6. I think it is what they more or less afforded to Radian6 already and I don't see that changing just because Salesforce owns them.
Brent Leary: Paul, your winners and losers here?
Paul Greenberg: I agree with Denis from the stand point of winners said, meaning the customers win if they are early adopters in this case and of course at the actual corporate merger so to speak, the integration works well. That is obviously going to be important.
What has fascinated me about this whole thing was, I have never seen so many vendors send out statements analyzing this thing in my life and I am sure that all four of us got those statements. We saw them from, Eloqua, Marketo, and dozens of companies all in all. Interestingly enough, I don't remember if Microsoft, SAP or Oracle. I know that Oracle didn't respond, but I don't remember if Microsoft or SAP did, I don't think so. But, what was fascinating to me was that the industry itself, even though they are being challenged really to some degree here because the reality is Salesforce, once again bought the market maker when it came to social media monitoring, they bought the market maker.
When push comes to shove, Radian6 has the most mature platform. Without going into details that you will see at their conference, it will indicate that this is even bigger then that - bigger then what we already know. The potential in this thing is huge. The other vendors are going to be forced to respond in some way because none of them have anywhere near the capability, that the combination of these two provide. The challenges to the industry at the same time, the industry itself seems to be seeing this or at least trying to spin it as validation for the industry. I think the challenge really is to the other vendors to try to keep up with what Salesforce did and customers always benefits in those situations.
The potential in this thing is huge. The other vendors are going to be forced to respond in some way because none of them have anywhere near the capability, that the combination of these two provide
Brent Leary: Mike, what do you think?
Mike Fauscette: Well, I think clearly Salesforce comes out very well in this. They need the socialytics platform. This gives them great capability out of the box immediately and it gives them real opportunity in the future to integrate these into other places into their portfolio. I think they win. Frankly, $326M, that the Radian6 folks won here too.
I think from a customer perspective that the Salesforce customers get the broader package that offers them some opportunity to start to get into some of the more socialytics and social CRM side of this. It is integrated in and includes Chatter, that's a good thing. The Radian6 customers get some stability, not that Radian6 was unstable, but certainly a smaller company verses larger deeper pockets and a public company at that. That is good for the customers overall.
Frankly, I think the bigger winner in some ways may actually be the partner community because once you get the Radian6 platform really embedded into Force.com, they can make that available out in all of these other applications. There are probably going to be a lot of things that we haven't even thought about that could come out of this that could really utilize that. From that, I think it's good.
From the competition stand point. I think there are some other good socialytics platforms coming around and looking at different parts of what can be done. As Paul said, the Radian6 is the best from a monitor and analysis side. So it’s going to provide some challenge to those players. They are going to have to look at this and figure out, do we build something or do we try to take something and step up. Intensity is a good player here, but otherwise, I think it is going to provide some competition and some challenge that is going to make some of those guys wake up and realize that they are going to have to do something.
Frankly, I think the bigger winner in some ways may actually be the partner community because once you get the Radian6 platform really embedded into Force.com, they can make that available out in all of these other applications.
Brent Leary: Okay, this is going to be the last question, this has been great, awesome information, but the last thing that I want to ask each of you and we will start with Mike and go to Denis and finish up with Paul. What does this do for the adoption of social CRM? Does this have any impact? If it does, what kind of impact do you see it having on the adoption of social CRM strategies and technologies?
Mike Fauscette: Well, I think part of the struggle when we talk about social CRM, when we talk about anything CRM our mind immediately goes to a magic bullet. We can buy the social CRM product and it does all of these social things and we are all good. That is not really the way it works. Social is more about the way you do business, then it is the technology, although technology certainly helps to enable all of this. I think the more completeness that we see in solutions, the more integration the better. Today, you are looking at a bunch of different pieces. Maybe I want to do social marketing, so I will need social marketing automation solution, oh and I need some analytics to do that or some socialytics to do that. I need sales intelligence so I am going to go out and do some social sales intelligence products and I am going to put that in my SFA. It’s messy, right? The more it's put together in a coherent story, the better that makes the technology part of the story and the better enabler that is for all of the other change that needs to accompany this from a company perspective. It doesn't solve the problem, but it surely makes it easier when you can go to one place to solve two or three parts of the technology piece and then focus on that business/cultural change thing that really has to happen.
I think its goodness and I think as I wrote on my blog post, consolidation continues. I think we are going to see that in the business world for the next few years. We have all of these great point solutions and we are going to see them all come together. That started last year really with things like Lithium buying Scout Labs and Attensity buying Biz360, etc., etc. That is what I think is going to happen over the next year or two. We are going to see better integrated platforms start to come together to provide more of this technology and frankly, backend to the standard traditional CRM that you have to do business as well.
Brent Leary: Denis.
Denis Pombriant: Well, I think as Paul said earlier, it validates or legitimizes certain aspects of social ideas for business. It also shows how social morphs from a personal tool for managing relationships to a business tool, and that transition has not been a straight line.
I think this might also, in retrospect, be seen as the beginning of the end of social CRM as a discreet entity. By that I mean, social ideas are becoming mainstream. We might sooner or later drop the social designation. I don't know, it's just my idea. Going back to plain CRM, though it will be a solution that is vastly different from what we had, say ten years ago. So social is becoming mainstream, its losing its emergent status, much like cloud computing has become mainstream and ceased being the risky thing it was ten years ago. I think finally it points out that social is not an option anymore, it's how we do business in the 21st century, which is part of what I think Mike was just saying.
Brent Leary: Mr. Greenberg.
Paul Greenberg: Alright, I agree with all of them… I do, but there are a couple of things. I think two things that there is a context for it to be put in and sort of taken into account with this is, and it kind of goes to what both Denis and Mike were saying, which is we are actually seeing now, the continued validation of social CRM from the stand point of its eventual elimination of something niche or special. We are seeing it move mainstream and the mainstream move is important because if you put in the context of things like IBM as a company moving 100% to social business, or if you put in the context of all of a sudden you are seeing RightNow integrate social media monitoring and I don't know if they built it, I don't know how they got it, but one way or another they announced in the last couple of days also, which kind of got squashed by this announcement.
You start to see that happening and you will also start to see a lot of real interest in large consulting and SI's to invest in or look at, smaller companies that fill out holes. What we are actually seeing is large entities creating full blown ecosystems around them. Mike identified it from the standpoint of platforms on the technology side and for the services side to being a very similar thing. All in all, we are seeing these major companies beginning to produce ecosystems that one way or another are built around the idea of social business.
That idea that Denis just expressed is absolutely dead on, in a few years, we will see social business as the way we do business and this is another step in that. Do I think it's a dramatic step in it? Only in the sense that it got a lot of media. Frankly, I don't think it’s as dramatic as IBM converting their entire company into a social business, which I think is one of the things I have ever heard of, because it's a $100B company and if you strip it from being just a vendor and think of it as a company, that is a phenomenal transformation.
It's another major significant step in the creation of social business or the mainstream-ization of social business as business.
Brent Leary: I really appreciate all three of your time, once again we have been joined by Mike Faucette, of IDC, Denis Pombriant from Beagle Research and Paul Greenberg from the Yankees… no 56 Group. One last question, particularly Denis and Paul - who wins the American League east this year?
Paul Greenberg: I refuse to answer on the grounds that it might incriminate me.
Denis Pombriant: I think it's going to be Tampa Bay or Baltimore, because when all of the New York papers pick the Red Sox, you know something's going to blow up.
Paul Greenberg: They are hoping by picking the Red Sox it will jinx them.
Brent Leary: Mike, do you have a horse in this race?
Mike Fauscette: I am going to stay out of that, I am a west coast guy, don't know anything about what they are talking about. I am going to ignore it.
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