Salesforce Announces Einstein-Race for Predictive Software

On Monday September 19th, Salesforce announced Salesforce Einstein, a full Artificial Intelligence (AI) Platform that includes what appears to be both Machine and Deep Learning Capabilities. They also announced a new Research Unit focused on AI. This blog is about the Salesforce Einstein Announcement and the profound implications for enterprises and vendors alike.

Salesforce Einstein and Predictive CRM

The biggest thing about Einstein is that Salesforce is showing working prototypes. Salesforce provided a preview demonstration of Predictive Lead Scoring and it looked solid. We expect that most of the big news at Dreamforce will be about Einstein and how Salesforce is changing the enterprise software game again. Given this move, this will force many Predictive Lead Scoring Vendors to look for M&A opportunities.

Einstein across all Salesforce Clouds – Sales, Service and Force.com Platform

Salesforce isn’t standing still. They are embracing AI across all of their Clouds, which includes Sales, Marketing, Service, Commerce, Community, Application, Analytics and IOT.  They are also allowing enterprises to build new apps that leverage Einstein (similar to IBM Watson Analytics). Because Salesforce is both a Platform and a SaaS provider, they will be able to push AI capabilities on multiple fronts.

Enterprise Software Impact – Analog Software is Dead

Aragon feels that this will create a stampede towards smarter software. It puts all competitors on notice and it signals a world in which analog software (ie dumb software) will soon be a thing of the past.

AI and Digital Transformation

Enterprises will need to look at software differently based on this. The era of analog software is over. Smart Software that has built in AI capabilities is the new frontier and it is a race. Enterprises will be disrupted by competitors that deploy new applications that Uberize an industry. Vendors that don’t revamp their offerings to make them predictive and real-time will get left behind. Aragon feels that all vendors will to have some level of predictive capabilities.

Enterprise Software Maturity Model – The Race to Predictive and AI

Aragon published a Enterprise Software Maturity Model in 2014 and we just updated it this month (see Research Note). Figure 1 shows the progression of how we think software is evolving. Salesforce just jumped to Level 3, others will need to follow.

Salesforce has made a series of acquisitions that have led up to this announcement. The biggest we feel was the acquisition of Metamind, which Salesforce acquired in April of this year. To us, the Metamind Deep Learning Module – that they refer to as Dynamic Memory Network (DMN) is key. It allows the application to understand and answer questions. That puts it on a par with IBM Watson, which has had a Cognitive offering in the market longer than any other vendors.

Cloud Platform Providers and the Race to Predictive

While IBM has Watson and has a lead in Cognitive, all of the major Cloud Platform Providers offer Machine Learning Services today. With marketing focused on Business Leaders, Salesforce is pushing the envelope here and it will force all others to respond. This will also cause a major surge in Mergers and Acquisitions in Machine Learning, Deep Learning and Cognitive Computing.

Overall, Aragon expects Salesforce to move fast and to engage its customer and partners to build new predictive Apps. Salesforce has proven that it has the chops to allow non- programmers to build Mobile Apps. We expect that there will be considerable demand for Einstein, assuming that Salesforce delivers Einstein in a timely manner. The demos that were given looked like preview versions of Winter 17 (ie the next release of Salesforce). Stay tuned for more updates at Dreamforce 2016.

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