Oracle and Salesforce Strengthen Their Commitment to Industries
The message is the same. During back-to-back weeks in late March / Early April 2014, Oracle and Salesforce (SF) each came to Boston to host events for analysts, the press, and customers. I attended each event and found it interesting that both of these large, global technology firms had the same message: the critical importance of supporting industries. In the jargon of those of us who are technology analysts, both of the horizontal-focused technology firms have seen the light (obviously I’m biased) to generate revenue – and profit – from going vertical. (I almost titled this post “Dive, dive, dive !”)
Similar Go-to-Market industry approach
Both have similar industry organizational structures
At Oracle’s Industry Connect event in Boston in late March, attendees were told that Oracle has created a separate Industry Group for each of the industries the company will support. The next week in early April, Salesforce told attendees at their Salesforce1 World Tour event in Boston that they have created an Industry Business Group.
Both are targeting the same industries (almost)
Oracle and Salesforce are both targeting: Communications, Retail, Health Care, Financial Services, and Asset Intensive Industries (e.g. Construction, Manufacturing). In addition, only Oracle is targeting the Oil & Gas / Utilities industry. And only Salesforce is targeting the Public Sector industry.
Both are motivated to create industry solutions
Oracle wants to enable industries
Mark Hurd, president of Oracle, told attendees that the company is committed to enabling industries (successfully compete in the customer-driven, mobile, digital marketplace). He said that Oracle is working with leading enterprises in each industry to create IT intellectual property (IP). Oracle then leverages that IT IP for use in the industry.
Mr. Hurd also said that Oracle :
- is motivated to solve the largest and most complex problems which industries have to solve
- wants to build once and sell many (e.g. create and sell standardized solutions to each industry)
- has deep specific industry domain expertise
- has best-of-breed technology which is core to each (industry) business
- will leverage all of Oracles technology to bring solutions to each industry.
Salesforce wants to create transformational solutions
Keith Block, president and vice-chairman of Salesforce, told attendees that they want to create transformational solutions which address major challenges for enterprises across each target industry.” They realize that Salesforce must be credible with industries. Their strategy to help SF build and maintain the credibility is to create an ecosystem of partners, make acquisitions, and build solutions internally.
Moreover, each of Salesforce’s industry groups will: .
- sell a solution rather than a product
- have a point-of-view specific to the industry
- have extensive industry experience
- create unique solutions for the industry
- create transformational solutions.
Same song, different orchestration
Each technology firm perceives the critical importance of supporting industries. However, each of the two technologies differ in their:
- DNA: By DNA, I mean the competency or true strength which the firm is known for by insurers. I consider Oracle to have two strong DNA strands – information management (to include storage, governance, analysis, and reporting) and enterprise applications (to include enterprise resource management and human capital management). I consider Salesforce to have one strong DNA strand which is customer-focused marketing and service systems. However because I believe that the insurance industry’s DNA is centered within systems of record (e.g. policy administration, billing, claims) I think Oracle and Salesforce have their work cut out for them.
- Vision: Oracle’s vision is to solve large complex industry problems while Salesforce’s vision is to transform insurers into customer-connected companies. There is no doubt that insurers have large complex problems and also are in dire need of transformation. However, I think that only time will tell whether insurers will look to either Oracle or Salesforce for their respective solutions. I wonder how much time either Oracle or Salesforce have baked into their revenue forecasts from industry solutions.
If you want a deeper discussion, I have published a more detailed – and free – report titled “Oracle and Salesforce Strengthen Their Commitment to Industries” on the Market Insight Group web site (www.marketinsightgroup.com). You’ll find it in the QuickNote area of the site. Just go to the “Report” drop-down, click on QuickNote reports, and you should find it. Let me know (firstname.lastname@example.org ) if you have any problems downloading it and need me to email it to you.
What do you think?
Whether based on this blog post or after you read my QuickNote report, let me know what do you think? Will Oracle or Salesforce succeed in their goal to generate revenue from providing solutions to their target industries, specifically their solution set to the insurance industry? Why or why not? What do they have going for them? What challenges do they face?