by Jim Lundy
This blog was last updated on August 8th, 2019.
On January 16th, 2019, it was reported via Reuters that Salesforce is in talks to buy Israeli and Boston-based ClickSoftware for U.S. $1.5 billion. This blog analyzes the reasons behind this move—at first glance, it may not be the reason you think.
Salesforce bolsters its field service with its acquisition of ClickSoftware. (Photo: Salesforce West – 50 Fremont, via Salesforce)
Salesforce Is White Labeling ClickSoftware
Yes, it is true. Salesforce is white labeling ClickSoftware for its Service Cloud offering. So, when you OEM a product and your offering is doing very well—Service Cloud is growing fast—you need to make sure you don’t face any bumps in the road. For the alleged price of $1.5 billion, Salesforce wouldn’t be paying too much of a premium, so this deal—assuming it closes—is a no brainer.
ClickSoftware Offers Predictive Field Service
Given delays in Einstein, owning the Click technology bolsters Salesforce’s position in AI. Click had strengthened its rules and algorithms to offer some of the most accurate field service predictive capabilities on the market. This, combined with its pure focus on service, solidifies Salesforce’s move.
SAP and ClickSoftware: Teasing Salesforce?
One of the reasons that Salesforce may have acted sooner rather than later is that Click was being friendly with SAP. If SAP was to acquire Click, this could have hurt Salesforce—so again, this was a timely and shrewd move by Salesforce.
Salesforce’s Approach to Innovation: Buying vs. Building
This does raise the question of innovation at Salesforce. The core Sales Cloud engine continues to chug away, but most of the new things coming from Salesforce had their start outside of the company. This includes Einstein. That said, as companies grow, buying is often far cheaper than organic development. We will be watching this deal closely—our take is that it will happen.
Update
On August 7th, 2019, Salesforce made the acquisition official, announcing it had purchased ClickSoftware for $1.35 billion according to a report. This move comes a week after Salesforce announced it was acquiring Tableau for $15.7 billion, which is the largest deal in Salesforce’s history.
The ClickSoftware acquisition is an effort to “beef up the company’s field service offering” which has seen steady and continued growth. Salesforce is expecting the deal to be finalized by Fall.