The vertical strategy announced by Salesforce in April of this year is a key aspect of Salesforce’s strategy to get to their indicated 20 billion $ target (at Dreamforce). The vertical strategy is critical to help focus and make deep roads into the “Enterprise” segment of the market. By 2018 the addressable market for Salesforce is expected to go up to 82 Billion$, with enterprises being about 70% of that (57 Billion$) and SMB’s constituting the rest.
The break up of the 2018 TAM by the chosen vertical’s is as follows (Approx):
TAM - 2018 ($ Billion)
|Health Care/Life Sciences||
This is supported by the expanding foot print of products / solutiions the latest of which is Wave / Analytics cloud which takes that addressable market up to 48 Billion at this time, as against the 35 Billion it previously had.
Was checking out the slide deck of the analyst presentation made by Salesforce as part of Dreamforce, There is a lot interesting insights / data out there. But there were three slides on the land and expand strategy in 3 verticals - Financial Services, Media & Manufacturing.
Overall the numbers seem pretty impressive, But some observations:
- The Manufacturing customers starting deal size was approximately 1/3rd that of the other two verticals, but from a total spend (revenue for SF) point of view 5 years it was higher than the other two verticals
- The Manufacturing customer didn’t start with sales cloud, but instead started with Service.
- The Manufacturing customer never adopter chatter
- Even later the Manufacturing company adopted Marketing cloud and not sales cloud. Looks like the manufacturing company is selling through and agent or dealership
- In all the 3 vertical’s platform or force.com was one of the first 2 solutions to be adopted after the land.