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Market Analysis

by Dominique Raviart

published on Dec 05, 2018

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Report Overview:

NelsonHall's market analysis of the Salesforce services consists of 62 pages. It provides an in-depth understanding of the dynamics at play in the Salesforce services market. 

Who is this Report for:

NelsonHall’s “Salesforce Services” report is a comprehensive market assessment report designed for:

  • Sourcing managers investigating sourcing developments within IT services
  • Vendor marketing, sales and business managers developing strategies to target Salesforce service opportunities
  • Financial analysts and investors specializing in the IT services.

Scope of this Report:

The report analyzes the worldwide services market for Salesforce services. It addresses the following questions:

  • What is the current and future market for Salesforce services?
  • What are the client segments for Salesforce services, and their characteristics? What are the drivers, benefits, and inhibitors for each segment?
  • What is the size and growth of the Salesforce services markets by client segment, geography, service line, activity, and sector?
  • How did spending grow in 2017 and how will it increase in 2018 and onwards, until 2022?
  • How is the market organized? Who are the main vendors? How can they be assessed and compared? What are vendors’ challenges and critical success factors by market segment?
  • What are the offerings in the market?
  • How are Salesforce services shaping?

Key Findings & Highlights:

The Salesforce services market is a dynamic market. Current spending is limited, to ~$5.6bn. But growth potential is very high (2017-2022 CAGR of 17%).

There are two main drivers for the growth of the Salesforce services. At the core is the success of Salesforce, which has emerged from a niche (sales force automation) and has become the leader in front-office software (including CRM, e-commerce, contact center, and marketing applications) and also a platform on which clients are creating their software. Also, Salesforce is a high-growth story with its service ecosystem growing as fast.

North America is the largest geography for Salesforce services. By far, with spending in 2022 reaching $8.3bn, three times as much as in EMEA.

Systems integration is the largest area of spending.

Sales Cloud (the former CRM product) currently is the largest service market, with $2.0bn in spending in 2017. Service Cloud (contact center software) is the second largest, with $1.7bn in related service spending.

Salesforce has indicated that it would focus its vertical efforts on six large industries: financial services, manufacturing, communication & media, healthcare, and life science, retail, and public sector. These six industries represent 80% of the subscription revenues of Salesforce and its largest service opportunity.

Accenture, Salesforce, and Deloitte lead the market and challenged by IBM - Bluewolf, Capgemini, and Cognizant.

Table of contents:

Table of contents:

  • Changing Shape of the Salesforce Services Market
  • The Salesforce services market is enjoying high growth and will continue to do, fueled by Salesforce’s growth ambitions
  • The service mix will move from Sales and Service Clouds to Customer Success Platforms and new products
  • Delivery is more onsite-centric than SAP/ERP projects. It will become more offshore-centric in the coming years
  • Customer Requirements: Salesforce Services
  • Salesforce clients look to refresh and digitally enable their applications …
  • … and will benefit from further functionality brought by Salesforce, or by Salesforce’s ISV ecosystem
  • The majority of organizations aspire to be more digitally-enabled thanks to Salesforce
  • Digitally-driven organizations want to modernize their CRM and contact center
  • Market Size and Growth
  • Foreword: all forecasts are based on Salesforce’s objectives to reach revenues of $20bn-$22bn by FY22
  • The Salesforce services market opportunity will more than double during the 2017-2022 period
  • North America is and will remain by far the largest Salesforce services market
  • Customer Success Platform & new products will overtake Sales and Service Clouds by 2022
  • Service growth by vertical will depend on Salesforce’s product investments. In all likelihood, financial services and U.S. healthcare are its priority
  • Systems integration will remain the largest area of spending in all Salesforce services, fueled by new software product launches
  • Vendor Market Shares
  • Accenture, followed by Salesforce, Deloitte, IBM, and Capgemini lead the global Salesforce services market
  • In North America, Accenture leads, along with Salesforce, Deloitte, and IBM
  • In EMEA, Accenture leads along with Deloitte, Capgemini, Salesforce, and Cognizant
  • Vendor Delivery Capabilities and Trends
  • Salesforce projects require core skills that are similar to those needed for SAP and ERP projects, but in an agile context
  • Currently, delivery is more onsite-centric than for SAP projects. This will change in the coming years once the clients’ confidence levels increase
  • Indian vendors have plans to expand nearshore selectively. Onshore vendors look for nearshore or offshore locations to lower their costs
  • Skills: Salesforce is currently fueling demand all over the place, around mature products, new products, minor products, and ISV partners
  • Accelerators: Most vendors have developed consulting methodologies and project management tools….
  • … in the coming years, they will develop technology accelerators to shorten implementation times and invest in Salesforce’s next-gen offerings
  • M&As: Accenture most acquisitive. The largest Salesforce specialists are now gone
  • M&As: target firms have become less common and are smaller in size
  • Vendor Offerings and Targeting
  • Service portfolio: Vendors are playing catch-up with Salesforce, with AI in mind
  • Service portfolio: vendors have structured their consulting portfolio…
  • … and are developing specialized offerings
  • Industry Solutions: most vendors are creating vertical IP …
  • … targeting their industries of strength….
  • … focusing on solutions rather than software products….
  • Industry Solutions: vendors will continue to develop industry solutions but remain cautious about products
  • BPaaS: Vendors are starting to provide contact management BPaaS on Salesforce, and are expanding to claims processing and marketing services
  • Vendor Challenges and Success Factors
  • DDOs look for Salesforce expertise and industry knowledge
  • SCS look for vendors with Salesforce expertise that can handle complex projects
  • ITFOs needs vendors that can fund new functionality through cost savings
  • NMs look for an outsourcing partner that will execute on its promises
  • Appendix I – Vendors Researched for Analysis
  • The following vendors were interviewed for this report:
  • Appendix 2 – List of Salesforce Acquisitions since 2015

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