Arguably the leader in cloud-based software, Salesforce has come quite a long way since its inception in 1999. The company was founded by Marc Benioff, a sales executive at Oracle, and was based on the idea that software should be available 24/7 via an external cloud. The concept was revolutionary at the time, and the innovation led Salesforce to become the #1 CRM system for several years in a row.
Yet, it seems inevitable that all the momentum would eventually slow, and recent signs indicate that Salesforce’s success has indeed plateaued. Sales have been down through the fall of 2021, and while the company remains optimistic about its outlook, emerging threats suggest they have entered a cool-down phase that could last. Here are some of the signs that indicate Salesforce has hit a wall, and what it means for the rest of the software industry.
Salesforce Faces Increasing Competition
In the e-commerce sphere, Salesforce is facing increasing competition as peers like Shopify and Adobe cut their prices. And, for businesses already leveraging a different system, the idea of re-platforming doesn’t seem particularly attractive. Many marketers don’t see the ROI, and the task can be too daunting in terms of both time and manpower.
Furthermore, there’s another, more powerful solution that has emerged. New, true headless solutions are taking the mind-share and market share of the e-commerce world, because they:
- Are faster and easier to use
- Require no coding or backend
- Offer a better user experience
- Lead to higher conversion rates
- Are quicker to deploy, including initial launch and updating features
Even if Salesforce were to develop their own API-first headless solutions, they would already be behind the proverbial eight ball. Startups such as Swell, Spryker, and Fabric already have the advanced e-commerce features clients are seeking — without all the Salesforce baggage.
For instance, Swell’s toolkit offers messaging, reviews, surveys, payments, and scheduling — all features that can be personalized, analyzed, and fit into existing workflows. Spryker, recognized in the Gartner Magic Quadrant, is another modular, headless commerce platform to consider, while Fabric has raised $100 million in its most recent round of funding for a total value of $850 million.
Salesforce’s Response to the Threats
It does seem that Salesforce has recognized the looming presence of headless e-commerce. Their counter has been to offer their own solution devoid of a user interface with their MuleSoft Anypoint Platform™, an integration platform for APIs. Yet, it’s still encumbered by their clunky, cumbersome back-end, including merchandising, inventory, operations, and maintenance that lack the user-friendly features so desperately needed in e-commerce. To this day, the platform continues to have issues with scaling to serve super tier-one IRC 500 sites.
Meanwhile, Salesforce’s acquisition of Cloudcraze’s B2B solution has been totally abandoned due to dysfunctionality. Its replacement is still in beta (despite the acquisition having taken place in 2018) and is a combined platform built on Salesforce that does not feature nor take advantage of microservice architecture; nor does it have an API-first design to facilitate adoption. Unfortunately, Salesforce solutions feature as much of their legacy solution catalog as possible bolted on, which in turn weighs down performance and drives up price, service, maintenance costs, and TCO.
Thus, it is indeed a wall that Salesforce has hit. While they’ll likely break through it, the offering that emerges on the other side will be starting from square one, and will be at best at parity with its rivals in the marketplace.