How Salesforce built a SaaS empire in Silicon Valley

Richard Fang

A case study on how Salesforce built a product user loved.

In 2000, a protest was happening outside Siebel System’s user conference. These ‘protestors’ carried large signs with ‘anti-software messages as they marched outside the venue.

But these weren’t real protestors. They were hired people.

When Salesforce first launched in February 2000, it needed to be noticed by people.

It was competing with the tech giant behemoths at the time, Siebel Systems and Oracle. With their PR agency Outcast Communications, they decided to theme the whole launch “The End of Software”.

The campaigns began at DEMO 2000 (a launch venue for new tech products) and then moved towards an “End of Software” launch party. Partygoers who came needed to bring pieces of old software to donate to software trash bins. This attention fueled the momentum for the next few months in media campaigns focused on this theme.

Bringing Software to The Cloud by Alex Machado on Unsplash

Salesforce’s vision was to bring software to the cloud.

As we know today, this has been one of the most successful tech movements within decades of innovation. Cloud is one of the biggest tech industries, but at the time, it was very ‘up in the air’.

Big companies still wanted to sell you bulky solutions with complicated features and offerings. This meant they still needed a centralized system for all their sales and customer data.

This gave birth to the idea for the first CRM on the cloud.

Co-founder Marc Benioff was actually a VP at Oracle before he decided to take the leap with his co-founders. He knew that he wanted to build a better CRM, especially one that was a SaaS.

The company was founded on the premise that software should be available anywhere, anytime over a global cloud computing infrastructure.

This idea was looked down upon as software elitists mocked the notion that software could be commissioned on the cloud to thousands of companies across the world.

Fast forward to present times, companies like SAP and Oracle are now scrambling to get their cloud software up to scratch with the likes of Salesforce and other big cloud players dominating the market.

Focusing on user first

It was clear that Salesforce wanted to avoid the whole process of buying software and then installing it manually from CDs.

By focusing on a user-friendly model on the cloud, Salesforce was able to offer much more than its competitors in terms of ease of use. Not only were they willing to offer one year free subscriptions to users but also removed the pain of needing to install the software manually. Salesforce essentially invented the whole ‘free trial’ to ‘buying’ process.

“Online sales force automation that makes software obsolete. As easy to use as your favorite Web site, lets companies of any size securely access, manage, and share sales information. No software to buy, install or upgrade. Sign-up online and your first five users are FREE for one year! “ — 2000 Salesforce product messaging

Growth, however, was still slow in the beginning until their first annual event, Dreamforce.

Salesforce Growth And Key Buyer Demographic

Held at the Westin Hotel in San Francisco in 2003, Dreamforce attracted thousands of convention-goers. Known now as Salesforce’s annual event, it was the first big brand push since its launch. This gave it not only exposure but also access to investors as well.

By June 2004, Salesforce announced its IPO and raised $110 million in the offering. This continued growth was fueled by one thing, a product that everyone loved.

This love was especially shared by salespeople across many companies.

Arguably, you could say sales is the revenue generator for most businesses, and this meant Salesforce could easily market through to them, mainly because companies were willing to invest in new tech for their sales team.

This was because they were the first CRM in the cloud and the only one doing it in a SaaS way. In general, SaaS was getting more attention in the market due to its much higher CAGR vs. traditional software models.

Salesforce — Rise of Customization and Shared Apps

One of the earliest concepts that Salesforce focused on was enabling users to create their apps and customize their own Salesforce. This was done on a variety of new implementations on top of their platform.

AppExchange: This was introduced in 2005, where third-party developers could create their apps for other Salesforce users to use. These could be from anything like survey integrations to other software connections. Not only could users make some cash making applications, but Salesforce benefited by having more applications on their platform without needing to develop their own.

Apex: Apex was an on-demand programming language that allowed third parties to write and run code on Salesforce’s architecture by accessing the back-end database and client-server interfaces.

Visualforce: Following Apex, Visualforce was introduced to allow users to create user interfaces they want. This could be including links or embedding content onto their Salesforce (once again focusing on developing good user experience capabilities).

Force: In 2008, Salesforce once again allowed for companies to bring more customization to their software. This time, it allowed companies to build custom applications on top of the platform (which is what Salesforce sits on top). This effectively made a PaaS and allowed developers to deploy apps onto of Salesforce’s own architecture.

This meant companies could go beyond a standard CRM system and develop different data models and application functionalities for other functions.

All of these extra additions added layers of additional customization that customers could use, creating the most robust CRM tool in the world.

Salesforce Marketing Cloud and Beyond

With Salesforce already taking over the CRM industry, they were ready to grow into a new market. It had already hit the $1 billion annual revenue mark in 2009 and, in only two years, increased its customer count by double.

With acquisitions like Radian 6 (social listening tool), Buddy Media (publishing and analyzing social media content), and ExactTarget (email service provider), Salesforce was ready to expand its solution set with these companies under its belt.

This formed their new ‘Marketing Cloud’ product, a crucial platform on providing marketing automation tools on top of their CRM tool. This has led to the Salesforce we know today, growing out with new acquisitions like Mulesoft in 2018 ($6.5 Billion) and Tableau in 2019 ($15.7 Billion).

Even with a 20-year tenure, Salesforce has still grown tremendously. With a recent annual increase of revenue of 28.73% YOY growth at $17.098 Billion, there seems no slowing down for this tech giant.

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Editor at CornerTech and Marketing @richardfliu on Twitter


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