Vlocity and its Role in Helping Salesforce’s $20B Target
Backed by Salesforce and focused on vertical industry markets, Vlocity has established itself as an important cloud player.
Anyone who has been around the industry for awhile will remember a time before the cloud. It seems only yesterday that arguably the two players most involved in creating the “cloud” industry, Amazon Web Services and Salesforce, didn’t exist. Fast forward to today and both of these companies, in their own way, are redefining our industry.
What I call 'industry cloud' offers the highest growth potential… we deliver industry-specific cloud and mobile applications. We are also helping the largest companies in the industries with the lowest customer service ratings.
– David Schmaier, CEO & Founder, Vlocity
For its part, AWS is the generally agreed biggest player in cloud infrastructure. The organization which was famously started because Amazon CEO Jeff Bezos realized that their huge computing resource could be rented out to all comers, is now the biggest public cloud vendor and innovating at a frankly startling rate. While Microsoft and its Azure cloud platform are working hard to catch up, few people would be so bold as to suggest that they’re going to catch up anytime soon.
And in the software world, Salesforce, the creation of Oracle alumnus Marc Benioff, turned the way enterprise software is sold and delivered on its head. The move to software delivered over the Internet, and the move away from perpetual licensing and horrendous service agreements, was revolutionary in its day, but is now the status quo for most forward-looking companies.
Escape velocity gained, now to achieve warp-speed
There is no question, AWS and Salesforce are massive enterprise vendors. But their respective CEO’s (and, for the record, AWS is now big enough to have its own head honcho, long time Amazon staffer Andy Jassy) are particularly ambitious characters and, having achieved escape velocity, they’re now looking for ways to fuel increasing growth and a trajectory that takes them beyond our own solar system into worlds uncharted’'.
In its recent earnings call, Salesforce was ebullient about reaching the $10 billion revenue mark, but was unprepared to rest on its laurels. Indeed, Benioff is quoted as saying he is now looking, along with the entire company, ahead to the $20 billion revenue target. And reaching that target is going to require a deep commitment to new approaches.
Arise the verticals.
The reality is that there is only so much growth that a vendor can gain out of a horizontal platform play. Eventually it takes deep vertical strategies to attain the next level of revenue, and one of the key strategies that Salesforce is going to rely upon is creating highly targeted solutions in key vertical industries. To this end it is worth looking at a relatively unknown, but increasingly important company in Salesforce’s ecosystem, Vlocity. Vlocity is in fact the fastest-growing company on the Salesforce AppExchange (out of 3,700 companies) and is the largest non-M&A portfolio investment ever made by Salesforce Ventures.
Vlocity is built completely on Salesforce’s platform and is focused purely on creating industry-specific functionality and processes for particular sectors. In particular, Vlocity is focused on five distinct verticals: communication and media, insurance, health insurance, public sector and energy.
Veeva cut the path. Vlocity aims to follow
Readers may have heard of Veeva Systems, a company focused on life sciences and pharmaceuticals. The fascinating thing about Veeva when it IPO’d back in 2013 was that it was itself built entirely upon Salesforce’s platform. It was previously unheard of for a company to successfully IPO when it was built entirely on someone else’s platform. But IPO they did, and the company has proven that, at least in the cloud world, leveraging someone’s platform can be a smart strategy.
Vlocity has something of a storied history and one in which verticals play a big part. It is an apparent who’s who of former staffers at Siebel, another CRM player (now owned, and largely forgotten, by Oracle). Siebel was a company that had extensive success building vertical-specific offerings, and the Vlocity founders decided to replicate this on a cloud platform. Craig Ramsey, the founder of Vlocity, was ex-Siebel and actually spent 12 years on the board of Salesforce. This is a company that has deep ties with Salesforce and a deep history in vertical enterprise solutions.
How will Vlocity help Salesforce grow to $20 billion?
In conversation with David Schmaier, Vlocity CEO, the company seems pretty clear on where the opportunities lie as they relate to vertical offerings. Says Schmaier:
"…what I call 'industry cloud' offers the highest growth potential… we deliver industry-specific cloud and mobile applications. We are also helping the largest companies in the industries with the lowest customer service ratings." Vlocity is essentially doing what Veeva did with pharmaceuticals, but for industries significantly larger, and with an even greater potential for improvement