Salesforce Buys Sendia, Shows It’s Serious about Wireless

Posted: April 17, 2006 in CRM

Salesforce.com announced its purchase of Sendia last Tuesday in a well publicized affair that included a luncheon/press conference complete with presentation, demo and panel discussion. Some of the buzz around the announcement was a mild debate about the importance of the whole affair. After all, it was said, companies buy other companies every day, but few hold an event to highlight it. That’s fair, and the natural question then is, what makes this different?

Well, there might be quite a bit. First of all, Salesforce.com has never bought another company, and its platform strategy more or less makes it possible for the company to never need to. The platform in question, AppExchange, already makes it possible for customers to pull together composite applications by selecting from hundreds of available solutions that are built to work together. Furthermore, Salesforce.com’s hosting model enables the company to profit from that integration as soon as the first seat goes live, so there is no financial reason to make acquisitions.

Completing the Platform

Absent some of the usual drivers, you need to look at synergy and infrastructure to find the reason. Sendia is a natural fit for Salesforce.com, because it provides the wireless infrastructure that completes — for now — the vision of a platform that can support users anywhere. Sendia brings assets that Salesforce.com apparently decided it didn’t want to invest in building from the ground up. This single new bit of infrastructure makes all Salesforce.com applications available on virtually all handheld devices, pending certification by Salesforce.com.

Parse that last sentence, and you come up with a compelling reason to make a big deal of the announcement. The union of all applications built in the AppExchange and virtually all handheld devices is a pretty big data set.

The idea of wireless computing has been more promise than reality for the last several years for many reasons. There were too many handheld devices with different operating systems and screen sizes for small, innovative companies to make headway in the space. Betting on the wrong hardware device was a sure route to financial ruin. Then too, there were speed and capacity issues for devices and networks that — for the time being at least — may be settled.

The Rebirth of Wireless

Immediately, Sendia’s technology makes it possible for users to develop once and deploy on many disparate devices; with that problem settled, and with bandwidth and overall device capacities improving, the stage is set for the rebirth of wireless. Make no mistake about it, this announcement will likely be seen as a rebirth. Just as network computing took close to ten years to really get off the ground, wireless has taken some time to develop too — and a lot of vendors have explored a lot of roads to nowhere. This announcement has the earmarks of the real deal.

Another way to look at this is to consider what it means for Salesforce.com. As noted previously, the company had never, to this point, bought another company. This act will no doubt be seen by many as the opening salvo in an acquisitions frenzy, but caution is in order. If this deal is to be considered the definitive case, hopeful acquisition targets should carefully analyze what Salesforce.com has done. Salesforce.com has shown it is willing to buy infrastructure, but the idea of buying applications will probably still be a non-starter.

The other thing worth mentioning is that acquiring Sendia takes Salesforce.com another step down the road to being a platform company that competes with the likes of Oracle and Microsoft.
Salesforce.com continues to say that CRM is its business and that it is focused like the proverbial laser, but you cannot ignore the fact that the platform is becoming huge potential business. I think CRM will continue to be highly important to Salesforce.com, but since this industry is not evolving at the rate it was five or ten years ago, it has plenty of spare cycles for trying other things. If you are building a 21st century application company, you simply must have not only wireless capability, but good wireless capability.

What’s Next

The looming questions now have a lot to do with where a company like Salesforce.com might want to go next. I think the smart money heavily discounts the idea of going head to head with SAP (NYSE: SAP) in the ERP (enterprise resource planning) space or of competing with any established conventional software house for that matter. There are numerous application areas that have not been penetrated or perhaps even thought of. The simple reason is that if your model of the world is a flat map, you don’t even think about going around the back.
In ten years, that’s most likely what we will say was the importance of this week’s announcement — if we say anything at all.

So, what did you think?

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s