Looking at the Bigger Implications of a Little Deal
I had the privilege of attending a pre-announcement briefing last night during which Salesforce.com’s Chairman/CEO, Mark Benioff, discussed the company’s acquisition of Kieden Corporation and the launch of a new offering called Salesforce for Google AdWords.
Unless you are a faithful Salesforce.com user or follower of the company’s AppExchange, you probably have never heard of Kieden. The fact is that the company is less than nine months old, only has four employees and boasts just 45 customers. Yet, the company’s decision to acquire Kieden was seen as important enough for it to orchestrate a multi-city briefing tour led by Benioff. The kickoff of the tour was in Boston where it attracted a mix of analysts, press and major Salesforce.com customers.
What makes acquiring a little company such a big deal?
- Search engine marketing is a huge and rapidly growing advertising mechanism which still holds many risks when it comes to demonstrating a ROI.
- Kieden has leveraged Salesforce’s AppExchange development platform in conjunction with APIs from Google to enable marketers to measure the effectiveness of their online search engine advertising campaigns.
- It took Kieden just two weeks to create its “mashup” of the AppExchange and Google functionalities that addresses an age-old business challenge…quantifying the value of marketing investments.
- Kieden’s solution and Salesforce’s acquisition undercut the potential impact of new search engine advertising algorithms promised by Yahoo and MSN.
- The rapid deployment and simple elegance of Kieden’s solution demonstrates the power of Salesforce.com’s AppExchange as a development platform.
- The acquisition of Kieden by Salesforce.com proves that the AppExchange is more than a platform or “ecosystem”. The AppExchange is also becoming a powerful incubator of new companies, with Salesforce.com in an advantageous position to get the first view of them.
Cynics and skeptics of the Software-as-a-Service (SaaS) movement may still discount the significance of this announcement by suggesting the deal that merely enhances Salesforce.com’s core services aimed at small- and mid-size businesses (SMBs).
The sampling of Salesforce.com customers at last night’s briefing should dispel the myths about the target audience for SaaS solutions and their perceived value. Among the company’s local customers attending the event were representatives from Analog Devices, Fidelity Investments, TD Banknorth and Northeastern University. All the customers I spoke to clearly understood the potential benefits of the Kieden acquisition and sold on the fundamental business value of SaaS.
In sum, Salesforce.com’s little announcement has big implications.
