The recent announcement of the BlueWolf acquisition by IBM surprised many people in the technology industry, in the same way the announcement of the Cloud Sherpas acquisition by Accenture shocked people back in September 2015.
Personally, I don’t think these acquisitions should catch anyone in our industry off guard. Global technology giants are trying to have a greater appeal to their customer bases. These customers are demanding skilled consulting firms who can provide value by implementing widely adopted cloud based applications such as Workday and Salesforce in a matter of months. Large scale implementations have, at times, taken years and this is no longer acceptable with the rapidly changing technology space.
The explosive growth experienced by Salesforce over the last few years, along with its projections to continue this growth, in addition to the shift from onsite CRM software to cloud-based CRM software are influencing the Salesforce ecosystem.
I find it hard to remember 10 years ago when I first joined the Salesforce ecosystem. At that time, the concept of cloud computing was still in its infancy. I remember trying to explain the advantages of the “cloud” and being faced with a great deal of hostility from IT departments who were concerned about their company’s data security, governance policies and, equally as important, their jobs.
Contrary to those fears, the game is changing.
The last decade has proven that cloud technology has an enormous positive impact on organizations, as well as the overall economy. Today, cloud computing is an important paradigm in IT, driving new ways to use technology and creating additional sources of competitive advantage.
While the “cloud” still represents a small part of the overall IT budget, it is growing at a much faster pace than IT as a whole and organizations who spend money on cloud computing subscriptions also spend on ancillary products and services, such as data migration, integration and training.
IDC indicates that the Salesforce partner ecosystem generates 2.8 times the revenue of Salesforce itself, and is expected to grow to 3.7 times as large as Salesforce in the coming years. That is an amazing amount of growth leading to numerous opportunities.
It begs the question, however, why are we surprised to see the big players like IBM, Accenture and PwC joining the ecosystem? Why do we question their “draft picks,” as they merge or buy out some of the smaller firms? This provides them with a competitive advantage — obtaining talent that has made an impact already within the Salesforce ecosystem.
We often find ourselves loyal to a particular team or player, so when A-Rod was drafted, we continued to pull for him on a different team. This same logic can be applied to technology giants absorbing some of the well-known players on the Salesforce field. They are hopeful that the customer base and the reputation of these smaller companies (along with their methodology) will remain loyal and embrace the change in their lineup.
I think the surprise is not a result of the recent acquisitions, but about the expected (or unexpected, depending on your current view) culture shock. The Salesforce ecosystem is agile and entrepreneurial. Both its customers and employees crave innovation.
Can global implementation firms be successful in aligning the differing cultures successfully? While mergers and acquisitions are an easy solution to meet demand, will this solution sustain them in the long run? If the bigger players are successful, what does it mean for the customers and the other players within the ecosystem?
The larger firms (and customers) are recognizing that IT services are changing. The world of billable hours and multi-year deployments is being replaced by rapid deployments, increased value, openness and flexibility.
There is a definite shift on the playing field and the number and organization of players on the Salesforce field is changing. We are expected to see more global firms joining the ecosystem.
The question is not when this will happen, the question is who will be stepping up to bat next?