Salesforce Spring ’16: Lightning, Pricing, IoT, and John Hernandez
By Jim Lundy
Salesforce held a live event on February 2nd, 2016 to celebrate the launch of its spring 2016 release that is the full instantiation of its new user interface it calls Lightning.
Lightning was introduced with great fanfare last August (see my blog) but it wasn’t completely a finished release, due to Salesforce and partner apps not being “Lightning Ready.”
Sales Cloud: Lightning Experience and Mobile
That all changes with the Spring ’16 release. Lightning is here and it is a true mobile-first user experience. While Salesforce was touting the number of enterprises using Lightning (19,000), many were toggling it on and off due to compatibility issues. While that issue is moot with this release, the bigger news is the new packaging that is part of spring ’16 and the higher pricing.
Sales Cloud Lightning: Higher Pricing
Given the new packaging and the new features, higher pricing (see Figure 1) isn’t a surprise, but we wonder if some enterprises will start to evaluate the price-to-value relationship on Enterprise Edition.
The most popular Salesforce SKU, Professional Edition, had not seen a price hike in nearly ten years, so an extra $10 per user per month will not even be noticed by many. For Enterprise and Unlimited, which now will list for $150 and $300 per user per month, respectively, the jury is still out. Most large enterprises will be contract-protected for this year and will need to negotiate after that.
There are many lessons that can be taken away from how Salesforce does its pricing. We at Aragon are specialists in enterprise pricing and have helped many enterprises fine-tune their pricing and in some cases, help them go from a single SKU to multiple ones.
Service Cloud: Work Orders, IoT, and John Hernandez
The Service Cloud got two major boosts. First, Salesforce is adding Work Orders to their Service Cloud. If there was any hesitation about integrating Service Management into Salesforce, that just went away. The bigger deal about Work Orders is Predictive Analytics and the Internet of Things. We expect Salesforce to push the envelope on IoT (via Service Cloud and IoT Cloud), since we see emerging IoT Management Platforms leveraging CRM as a single source of truth.
The second boost is the naming of former Cisco Executive John Hernandez as SVP and COO of the Service Cloud. John built the Contact Center business at Cisco, in part because of his passion for great products and helping customers put them to work. John is one of the Silicon Valley executives who can build a future vision and then execute it. While Salesforce has many great executives, John has a track record that is hard to beat.
Salesforce All the Time: Powered by AppExchange
While Salesforce celebrates its 49th release of its Sales Cloud, it is their AppExchange that has helped power its growth as a CRM platform. The fact that they now have 3,000 partner applications in AppExchange is one of the reasons for their success.
When I was at Dreamforce in 2008, no one, not even Marc Benioff, could have predicted what AppExchange would become. Compare Salesforce and Siebel (see Figure 2) and our conclusion is that AppExchange was the key to the rapid rise of Salesforce. In 2016 and beyond, one thing is clear, ecosystems always win and Salesforce has a winning platform-based ecosystem.