So the news is that Salesforce.com is raising five hundred million dollars so that it can go on a buying spree. Half a billion isn’t what it used to be but it can still buy a good weekend in Vegas or a nice stable of emerging technology companies. What would I do with that much money? Assuming Vegas is off the list, here are a few ideas.
First things first: Why borrow that kind of money when you have about nine hundred million bucks on your balance sheet? The question answers itself. You borrow when you can get money at attractive rates and the best time to be a borrower is when you can walk away from a middling deal. In my humble opinion, they’re borrowing the money because they can and because coming out of a recession is a nice time to pick up some bargains. A bargain here would be an emerging company with innovative IP and a weak balance sheet.
So what are they likely to do with the cash?
Let’s digress for a moment. Seems to me that CRM is in need of a makeover. The economic drivers that I think will be driving business in the next two decades include high and dynamic energy and transportation costs, mature markets and increasingly savvy customers who will not suffer fools. Companies that expect to be competitive in those conditions will need different and better business processes and the software to support them. As configured, CRM today gets C’s and D’s when examined against those economic drivers.
First, I would buy technologies that enable a company to substitute social awareness for transportation. As transportation becomes more expensive and business people travel less, the options are to not do business or to find other means. I am betting we’ll choose business by other means and that leads to awareness over transportation. CRM gets a D in awareness so far and that needs to change. There are enough emerging companies getting close to figuring out awareness in a business context and I’d be a buyer in that market.
Then I would look at the community side of social media. CRM has been chasing outbound social media with the ardor of a superannuated sophomore with mixed results. It’s been a one-way street so far and frankly, I am not sure if outbound social media companies know how to dance with CRM. Inbound or community oriented social media has been another story. Inbound companies have ignored CRM preferring to think that what they do is different. It ain’t. I’d look to buy an inbound community company and take the time to establish the business process support that will make one plus one equal fourteen.
Then there’s video, VoIP and audio. These technologies offer some great opportunities to CRM but they have to scale and come down a big learning curve pronto. CRM has to have a native facility for making three to five minute videos on the desktop — with or without people but with narration and other sounds. They used to be called commercials; we’ll find another name for this narrow cast cousin. I’d buy some companies in these areas more on speculation at this point but I would still buy for the experience value.
As part of the foray into video we should include a company or technology that supports Web based meetings. When jet fuel hits eight or ten bucks a gallon (Can you guarantee it won’t?) user groups, training sessions and annual meetings just to name a few meeting types, will migrate to the Web. It will be a good thing because it will save customers on the costs of travel and enable vendors to hold more rather than fewer big meetings.
Another thing to keep in mind is that Salesforce is not exclusively a CRM company any more. As a platform company, they need to constantly be mindful of the need to have a well-stocked platform containing all of the tools that business application developers of the near future will need. Given the economic drivers you can bet that transaction oriented CRM or CRM with a few social refinements will not be enough.
This is not a complete list but like Mark Twain said about a thousand lawyers chained together at the bottom of the ocean, it’s a good start.