Intuit: Big Plans for Helping Small Business Work Smarter

Even though I have tracked Intuit for at least 15 years, I didn’t know that Intuit has about 100 patents pending before the U.S. Patent and Trademark Office related to artificial intelligence (AI) and machine learning, and more than 30 machine learning systems in production—until I attended Intuit’s Innovation Gallery Walk in New York last week. Intuit uses the Gallery walk to showcase new solutions that it has recently brought to market, as well as those that are still in development.

At this year’s event, Intuit unveiled some of the ways it is using artificial intelligence, machine learning and other new technologies to “power prosperity for small businesses and consumers.” With 26 product innovations demoed at the event, Intuit has clearly been busy! While I didn’t have time to see all of these demos, I did learn about some of the ways in which Intuit is putting these technologies to work to help make it easier for small business to manage their businesses more efficiently, intelligently and profitably.

Getting More Insight, More Easily with Natural Language

For most small business owners, time is the most precious commodity. Intuit has created an open, natural language application programming interface (API) to develop conversational user interfaces for its solutions. For instance:

  • Intuit is testing a new chatbot, which let users query their phones in a Siri-like fashion to get answers from and execute tasks in their QuickBooks account. For example, a user might ask, “What clients owe me money?” and then take tell the system to send reminders to clients to pay overdue invoices.
  • Intuit’s Smart Mirror experiment turns your mirror into a virtual assistant by blending the power of natural language queries with the Internet of Things (IoT). While you’re shaving or putting your makeup on, you can ask the mirror to tell you what’s going on with the weather or the stock market, or ask it to pull information about your business from your QuickBooks Online account. The mirror is a potential proxy for an almost unlimited array of objects, and Intuit’s goal to provide QuickBooks users with information when, where and how its most convenient—whether your mirror when you’re getting ready for work in the morning, your car en route to a client’s site, or your Amazon Echo when you’re making dinner in the kitchen.

    Figure 1: Intuit’s Chatbot and Smart Mirror Experiment

 

Helping Self-Employed Workers Save Time and Money with AI and Machine Learning 

Intuit estimates that the percentage of self-employed—aka “gig” workers—will grow from about 36% of the workforce today to 43% in 2020. Self-employed workers often use the same accounts and credit cards for business and personal expenses. Managing and untangling this information can be difficult and time-consuming, and lots of information often falls through the cracks at tax time. In some cases, it all falls through the cracks: Intuit found that 30% of its QuickBooks Self-Employed users claimed no business deductions in 2015—and as a result, likely paid more taxes than they owed.

To help gig workers get organized, keep more of the money they earn, and gain more visibility into their businesses, Intuit is infusing AI and machine learning into QuickBooks Self-Employed. For example:

  • Expense Finder helps uses to identify more taxable deductions. QuickBooks Self-Employed securely connects to a client’s bank account, automatically finds and imports business transactions from the past year, and sorts them into Schedule C categories, to reveal potentially deductible expenses.
  • Automatic mileage tracking tracks mileage every time you drive your car, whether the QuickBooks Self-Employed app is open or not. At your convenience, you simply swipe to the left or right to tag mileage for each trip as a business or personal expense.
  • You can snap photos of receipts, and the app automatically reads all the relevant info from the receipt into the system so you don’t have to spend time typing it in.

Figure 2: Growth of the Gig Economy and QuickBooks Self-Employed Mileage Tracker

 

Inuit is also creating a new offering that combines QuickBooks Self-Employed and TurboTax, called TurboTax Self-Employed. This solution will make it easier for self-employed workers to separate business and personal expenses and file taxes more accurately.

Reducing Friction With Partner Integrations

Over the past few years, Intuit has built out its partner platform to help extend the power of QuickBooks Online through third-party solutions. The platform has provided third-party developers with tools to build data integration with QuickBooks directly into their solutions, and Intuit’s app store has over 450 applications. Intuit continues to push ahead on this front, with new capabilities, such as:

  • A deeper collaboration with G Suite by Google Cloud, which gives QuickBooks users the streamline workflows. With the new integration, users can for instance, send invoices directly from Gmail to their clients.
  • Partner apps that are embedded in QuickBooks Online. T-Sheets and Bill.com have revamped their user interfaces with the QuickBooks Online look and feel, and embedded them in the QuickBooks online application to give users a fast, easy on-ramp to add new services. Via machine learning, QuickBooks Online flags when certain thresholds are met—such a number of employees or transaction volume—when a time sheet or bill paying solution would make sense. Users are offered a 30-day free trial, and if they decide to continue, pay the monthly charge from their QuickBooks account.

Intuit has also streamlined its online financing program. The vendor has simplified and shortened the application process to 5 minutes by using more of the data loan applicants already have in their QuickBooks Online system. With eight lender partners in the platform, Intuit is also providing loan applicants with easy to understand, comparative information on lending offers so they choose the offer that works best for their businesses.

Figure 3: Intuit Financing Application

 

Summary and Perspective

As Intuit CEO Brand Smith noted in his remarks at the event, Intuit’s mission is to “power prosperity around the world for consumers, small businesses and the self-employed through its ecosystem of innovative financial management solutions.” Founded in 1983, this now 34-old company has been able to thrive not by resting on its laurels, but by embracing change to stay ahead of the curve.

As evidenced at the Gallery Walk, Intuit is continuing this trajectory, investing to innovate with AI, machine learning, IoT and other technologies that will help its customers—and Intuit itself—with new and better ways to flourish well into the future.

Intuit: Helping Very Small Businesses Connect the Dots

There’s no question that cloud is the new normal for very small businesses (VSBs, with 1 to 19 employees).  Cloud computing has made it easy for VSBs to access, buy and deploy the business solutions that they need to automate operations, and to sustain and grow their businesses. SMB Group research shows that VSBs are increasingly opting for cloud solutions for flexibility, speed and cost benefits, and more (Figure 1).

Figure 1: Top Reasons to Use Cloud Solutions: Very Small Businessesslide1

 

Integration Lags Cloud Adoption

However, while the cloud has made it much easier for VSBs to access and use new applications, most still find it difficult to integrate them. In fact, 32% of VSBs have not integrated any of their applications. Among those who have done some integration, 71% rely on manual Excel file uploads or custom coding, instead of using more efficient integration solutions or pre-integrated solutions (Figure 2).

Figure 2: Level and Type of Application Integration: Very Small Businessesslide2

This isn’t surprising. While there are many solid integration solutions in the market, very small businesses lack the expertise, resources and money to use them (Figure 3). And while pre-integrated solution suites can be great, most small businesses adopt applications in an incremental way. They don’t want to pay for functionality they don’t use, and don’t have the bandwidth to get productive on more than a couple of things at the same time.

Figure 3: Annual Technology Spending and IT Resources: Very Small Businessesslide3

However, the cloud makes it easy for VSBs to add new applications as needed and as time permits. But over time, they realize  automation additional functions without integrating them only gets part of the job done. They need to integrate them to streamline workflows and to gain a unified view of what’s going on in the business.

Intuit: Evolving Messaging, Platform and Products to Help VSBs Connect the Dots

At it’s 2016 QuickBooks Connect conference last week, Intuit hammered home the event theme–that connected applications can help small businesses speed up workflows, save time, and gain a more complete view of their customers. The company showcased its open platform strategy and partnerships, and its goal to help its customers connect the dots between information and workflows in different applications.

In the developer track, Intuit emphasized its commitment to provide developers with the latest and greatest tools to help them easily integrate their apps with QuickBooks Online. For instance, the vendor touted Webhooks, which makes it easier for developers to synch data between QuickBooks Online and their solutions. Intuit also offered developers numerous sessions to help increase their understanding of how broader technology trends, such as machine learning/artificial intelligence, Internet of Things (IoT), mobile and security (to name a few!) are reshaping business applications, and fuel interest in applying them to create more valuable and innovative solutions.

Intuit also announced several new, specific integrations to help VSBs connect the solution dots, including:

  • Integration with Google G Suite (formerly Google Apps for Work). Customers can now buy QuickBooks Online in the G Suite Marketplace, and use single sign-on (SSO) to access QuickBooks from their Google accounts. New integration with Google Calendar also enables users to import time and billing data from Calendar directly into QuickBooks Online.
  • New payments integrations with Apple Pay and PayPal. These integrations enable users to invoice payments to their customers from QuickBooks Online, and then take payments from customers via Apple Pay and PayPal. Once a customer makes the payment from Apple Pay or PayPal, the integration automatically enters and categorizes it in QuickBooks Online. This saves customers from having to use a plug-in or manually reconcile transactions between QuickBooks Online and their payment systems.
  • Payroll integration with TSheets, an employee time-tracking and scheduling app. Users can now track, approve and pay employees from within their QuickBooks Online accounts.
  • Extended integration with Bill.com. QuickBooks Online users can now manage Bill.com functions, such as bill payment, tracking, transaction reconciliation and ACH authorizations within QuickBooks Online.
  • More integrated financing options. Intuit’s Financing platform has added new integrated loan programs for QuickBooks Online users. For instance, users can now apply for American Express Working Capital Terms for short-term loans via QuickBooks Online. Intuit has also incorporated BlueVine’s Flex Credit into its QuickBooks financing platform.

Summary and Perspective

Intuit is taking big steps to educate small businesses and accountants about the value of application integration, and is paving the way to make integration solutions easier to use and more affordable.

Intuit is also the top business solutions provider in the very small business market–one that many vendors find very difficult to crack in terms of broad-scale adoption. In addition, Intuit has the advantage of being the keeper of the crown jewels for many small businesses-their financial transactions.

From this vantage point, Intuit has distinct advantages to attract developers to its community and its mission, and to help VSBs finally start moving up the integration curve. At the same time, Intuit’s open platform, connected community strategy will also help power Intuit’s next level of growth in VSB market.

Note: Intuit is an SMB Group client, and paid my travel expenses to QuickBooks Connect.

Using Sales Management Solutions to Boost Sales Productivity and Customer Satisfaction

SMB Group research consistently shows SMBs view attracting new customers, growing revenues, maintaining profitability, improving cash flow and improving customer experience and retention as their top business goals (Figure 1).

Figure 1: Top SMB Business Goals

Slide1

With that in mind, I was interested in talking with Karen McCandless, market researcher at GetApp, a sales management software comparison and reviews site, on her latest study. The study shows that a majority of B2B sales professionals lack  confidence in their sales strategy. Karen, can you tell me a little about the study, and what you found?

Karen: For our study, we surveyed 250 B2B sales professionals in North America. We found that 67% think that their small business selling strategy needs improvement to help them generate leads. Digging deeper, it seems that they are more concerned about the quality of leads than the quantity of them.

Laurie: Yes, we hear the same thing. For lack of a better term, SMBs often take a shotgun approach that may bring in lots of leads, but fails to bring in quality leads that are a good fit for the business.

Karen: Exactly. In fact, we spoke with Salesforce’s Global Customer Growth and Innovation Evangelist, Tiffani Bova, for our study, and she explained that the biggest opportunity to improve lead performance was to, “incorporate personalization and intelligence into [the] sales process.” This missing element is backed up by our data as well: Just 10% of sales reps believe that their B2B customers are looking for any kind of personalized service when purchasing. These facts help paint a picture as to why that two-thirds of sales professionals think their sales strategy needs help.

If salespeople rarely think their customers want personalized service during the sales process, it leads to B2B customers focusing more on factors like ‘price’ when it comes to purchasing (which 64% of our customer sample cites as the most important purchase factor), forcing salespeople to fight over price.

Laurie: Sure, and the race to the bottom is one most SMBs can’t win against large companies. So, your survey also looked at how SMBs can use sales management software to help them to compete more effectively. What did you learn here?

Effect of sales software on revenue_GetApp 2016Karen: We found that 66% of SMB sales professionals currently use sales management software, while a third still doing things manually. Not surprisingly, among those using these solutions, 86% have seen an increase in revenue, and 93% reported a boost in productivity.

Laurie: We see very similar results in our studies. Technology is increasingly part of the business fabric, and SMBs that invest in technology to automate business processes can get a great return on their investment.

Karen: It can really help automate manual, time-consuming tasks, freeing reps up to focus more time on areas such as prospecting, nurturing and closing deals. These solutions also give sales reps more information about their leads and prospects so they can make better decisions. Together, this can help improve the sales process.

Laurie: Were there any other key findings from this study?

Karen: Yes. We heard very positive things on the value of sales training: 92% of respondents said that the additional training they have received has increased their selling abilities. We also found that sales people view one-to-one coaching, delivered on an ongoing basis, as the best type of sales training.

Subject matter is also important, such as equipping sales professionals with the right software training to help them to harness the soft skills they have developed. In addition, we found only 15% of salespeople use social media to generate leads and better engage potential B2B clients (compared to 27% for both phone and in person).

Laurie: Yes, this is a critical area that sales people need help with, because online reviews, ratings and social media increasingly shape buying decisions. But even though technology solutions offer great benefits, SMBs are often confused and challenged when it comes to deploying new tech solutions. In fact, in our 2015 SMB Group Routes to Market Study, respondents ranked “implementing new technology solutions” and “figuring out which technology solutions can best help my business” among their top three technology challenges. Your thoughts on this?

Karen: Well, if you’re a small business looking to implement a sales management or CRM for the first time, you need to take several considerations into account. This includes factors such as deployment speed, cost, training needs, features, integration with other software you are already using, can it grow with your business, and mobile capabilities. Cloud-based sales management software can help here, as having the software hosted generally means quicker setup (with less downtime), predictable cost with less to pay up front, the ability to add and remove users easily, simplified IT management, and more updates more often. Plus most cloud-based systems these days are intuitive and have mobile capabilities, which makes adoption easier.

Laurie: Yes, all of the above. In fact, we find ease of use often trumps price when SMBs are making software decisions, so its no wonder that cloud based CRM is becoming the norm. And while the PC isn’t dead, people are doing more work on mobile devices. In our 2016 SMB Collaboration, Communication & Mobility Study, 67% of SMBs said that mobile solutions are changing how they communicate and collaborate. Any final insights?

Effect of sales software on customer satisfaction_GetApp 2016Karen: In addition to the increases in revenues and productivity, we found 78% of salespeople have seen an increase in customer satisfaction after adopting CRM solutions, which I think underscores the fact that these solutions free up salespeople to focus on creating a selling process that caters to the customer, thus allowing small business to have a leg up and compete with the big fish.

Laurie: Absolutely agree with that, Karen, and thanks for sharing these findings and your perspectives with me.

Dealing From a New Deck: Oracle Buys NetSuite

Slide1Everything came full circle with NetSuite today, when Oracle announced that it plans to acquire NetSuite for $9.3 billion.

Flashback

In 1998, Evan Goldberg, founder of what was then NetLedger, visited our analyst team at Summit Strategies, where I started my analyst career at back in the day. At the time, traditional software companies were starting to dabble with the application-hosting model. In this model, application service providers (ASPs) hosted software designed for on-premises delivery and delivered it to clients over the Internet. But Goldberg’s NetLedger was the first (to my knowledge) to deliver software designed from the ground up to be delivered over the internet, as a service. It would take a few years for the term “cloud” to be coined, but the seed was planted.

At the time, NetSuite and a handful of other pioneers, most notably Salesforce, were the upstarts of the software industry. They rattled traditional software vendors’ comfortable development, licensing, delivery and service models with multi-tenant architectures, subscription licensing and 24/7 service designed to revolutionize the software industry. They pledged to “democratize” software, and make it easier and more affordable for small businesses to take advantage of solutions that previously had been out of reach.

However, even as NetSuite built its revolutionary persona, it relied on the old guard for money and technology. NetSuite was built on Oracle’s database, and Larry Ellison, Oracle’s founder, provided financial backing for the fledgling company from the start. In 2001, Oracle even briefly tried marketing the Oracle Small Business Suite, powered by NetLedger, as its solution for small businesses. Since Oracle didn’t have an effective small business sales or marketing organization, that offering was quickly scrapped, and in 2003, NetLedger became NetSuite.

Fast Forward

canstockphoto9457335Oracle’s acquisition of NetSuite was pre-ordained since 2008, when the “great recession” hit, and the OPEX cloud model became much more attractive to cash-strapped companies. People tried cloud computing because they had to—and surprise—they liked it. Not just because of the licensing and pricing advantages, but also because of the speed, ease, scalability, accountability and service advantages it provided. They never turned back, and today cloud computing is not only mainstream, but poised to overtake traditional on-premises computing in many solution areas: Gartner projects it will be a $204 billion market in 2016.

Meanwhile, despite the fact that Ellison notoriously derided cloud computing in the past, he continued to invest in NetSuite, and now owns about 40% of the company. Ellison has also changed his cloud rhetoric over the years. In 2015 he said that “We no longer pay any attention” to traditional competitors such as SAP and IBM, and that Oracle would be the “biggest company in the cloud.” Recently, he put a number on that, saying that he would beat Salesforce to become the first $10 billion cloud company.

In reality, however, cloud revenues are still a very small part of Oracle’s business. The company’s fiscal 2016 Q4 results state that Oracle’s total Q4 revenues were $10.6 billion, with cloud plus on-premise software revenues accounting for $8.4 billion of total revenues. While cloud software as a service (SaaS) and platform as a service (PaaS) revenues were up by 66%, they tally up to just $690 million for the quarter. And even as Oracle purports to be growing its cloud business at a brisk pace, a former Oracle finance manager has been accused the company of “cloud washing”—inflating its financial results by re-categorizing existing solutions as to fit in the cloud bucket.

Dealing From a New Deck

deck of cardsEllison has hedged his bets for a long time. He’s played his traditional hand at Oracle, while also holding a great cloud card with his NetSuite investments. He could use NetSuite to experiment with the cloud, and see how things unfolded, without unnecessarily disrupting business as usual at Oracle.

If nothing else, this deal signals that things have now unfolded. Along with buying market share, Oracle is buying Netsuite’s cloud culture and sensibility—which it needs.NetSuite has paved the way in the cloud, and will add to Oracle’s cloud credibility. Oracle gets a credible cloud offering in NetSuite—no cloud washing required—to compete against the likes of Salesforce, Workday, and a slew of other pure cloud companies. And, the Oracle sales and marketing machine should help push NetSuite into consideration in more and bigger deals.

But, while NetSuite’s growth has been strong, increasing at more than 30% for the last few quarters, the company announced that in Q2 2016, it hit Q2 revenues of $230.8 million. So, NetSuite alone is  not going to get Oracle to $10 billion in cloud revenue anytime soon.

Maybe more important, we live in an age where digital disruptors often hold the best cards, customers have more choices, and digital word of mouth supersedes corporate sales and marketing tactics. With this in mind, it will be interesting to see how Oracle will play its new hand out.

 

QuickBooks Self-Employed: Built for the Business of One  

According to the U.S. Government Accountability Office (GAO), over 40% of all U.S. workers are now contingent, which includes the self-employed as well as temp workers, contractors, on-call workers and part-time employees. That number is up 10% from the previous GAO survey in 2006.

This trend spans across industries, from construction to pet care, and from professional services to Uber and Lyft drivers–and shows no This trend shows no sign of abating, with the GAO predicting the percentage of self-employed workers to rise to 50% by 2020. Self-employed workers need tools to manage finances, build brands and grow their business—but they must do all this on a shoestring budget and little or no accounting expertise.

I recently had the chance to speak with Intuit’s Cassie Divine, Business Operations Leader for the Self-Employed Solutions business unit of Intuit’s Small Business Division about the “gig” economy and Intuit’s QuickBooks Self-Employed solution , developed specifically for people that are self-employed.            

Intuit built QuickBooks Self-Employed to fill the gap between personal finance solutions, which are easy to use, but don’t address accounting and tax needs, and small business accounting solutions, which can be too complicated and expensive because they include many things self-employed people don’t need.

Whether you think of yourself as a business of one, solopreneur, freelancer, or contractor, QuickBooks Self-Employed can help you track and organize business and personal expenses, maximize deductions, estimate tax payments, and manage cash flow more easily and efficiently.

QuickBooks Self-Employed may be just what you need to streamline these tasks, get better visibility into your finances, and make tax time a whole lot easier to deal with. Watch this video to learn more!

This post is sponsored by Intuit.

Justworks Goes the HR Distance for SMBs

justworks-primary-logo-white-blue (1)Many vendors provide human resources (HR) software solutions for SMBs. And increasingly, more of these solutions are delivered in the cloud–removing the IT burden from the backs of resource-constrained SMBs.

But as we all know, this only solves part of the problem. For many SMBs, HR resources are stretched just as thin as IT staff. Sure, HR software can automate and streamline HR functions, but it doesn’t address the problem of sourcing benefits in an increasingly complex marketplace.

Enter Justworks

Justworks, Inc. aims to provide a more complete solution, offering SMBs a one-stop shop for cloud-based integrated payroll and HR software and compliance solutions, as well as a direct link to benefits providers.

Isaac-Oates-CEO-Justworks-585079-editedI had the opportunity to chat with Isaac Oates, Justworks CEO, about the company, which in March added $33 million in Series C funding, bringing total venture investments in the company to $53 million. Oates started the company to “level the playing field” for all businesses with a single solution that not only provides the software to run HR functions more efficiently, but provide businesses with collective access to health insurance, 401K and other benefits providers.

Justworks partners with Aetna for healthcare, dental and vision plans; with MetLife for dental and vision; and with several providers for 401K plans. Just last week, the company announced that it has integrated One Medical primary care into its offering to help SMBs provide on-demand medical care to their employees. By serving as a collective across many SMBs, Oates says Justworks can provide better benefits at a lower cost than individual SMB could get on their own.

Formed in 2013, Oates and team spent the first 18 months building Justworks’ software foundation and obtaining licensing across the customers in the summer of 2014. The company has now grown to over 100 employees, and is focusing on growing its business by extending its offerings. For instance, Justworks plans to add new, differentiated benefits offerings, such as health advocacy, telemedicine and urgent care. Because health insurance options are very difficult to understand and navigate, Justworks will also devote considerable investment to providing guidance to help companies and their employees better understand their options.

Oates is also committed to continuing to deliver a “rock solid” solution to employers. In contrast to Zenefits, which raised $500 million at a $4.5 billion valuation, and ran into regulatory issues in pursuit of rapid growth, Oates’ strategy is to focus on business fundamentals and earning the trust of Justworks customers.

How Justworks Works

Screen Shot 2016-05-02 at 12.41.16 PMJustworks charges a flat per person per month fee, and employers can choose what they offer via the platform. Payroll and compliance are at the core of the solution, and employers can add health insurance, health savings accounts, and 401K plans as desired.

The vendor’s target market is 5-500 employee companies, but they have smaller and larger customers as well, and are seeing the most traction in 50-plus employee space. Today, Justworks sells entirely through a direct sales model, with enthusiastic customers helping to spread the word.

Perspective

Justworks will face the dual challenges of gaining brand awareness, and convincing SMBs to switch from existing payroll and HR systems and benefits plans. But  its all-in-one approach should click with many SMBs, especially fast-growing SMBs that currently use disparate solutions, and need to more and improved benefit plans to attract and retain skilled talent in an increasingly competitive hiring landscape. And, as Justworks continues to add more partnerships with benefits providers, it will amplify its value.

SMBs will incur an upfront switching cost to make the change. However, in many cases, access to a modern, streamlined HR system, coupled with potential cost savings on benefits programs should provide SMBs with cost-savings and significant time savings over the long-term.

Does Salesforce’s Refreshed SMB Strategy Add Up?

salesforce logoSalesforce hosted its second annual Analyst Summit last week. This year’s format was much more engaging and interactive format than last year, sparking lots of interesting questions and discussions among analysts and the Salesforce team.

At a high level, Salesforce’s executives laid out the company’s key themes for 2016, which included:

  • Continuing to invest in its core CRM space to maintain market dominance. To that end, Salesforce recently introduced its new Lightning user experience and development framework, along with Trailhead, its interactive learning platform to help users and developers transition more quickly and easily to Lightning.
  • Using IoT to strengthen customer engagement. Salesforce announced Thunder, its IoT Cloud, at Dreamforce 2015. Salesforce’s Adam Bosworth emphasized that while Thunder isn’t yet ready for prime time, it is in pilot with several customers. Salesforce is focusing on connecting IoT with business processes and customer experience to help its customers to help drive sales and revenues.
  • Reimaging Wave Analytics to provide better insights to users. Salesforce initially launched Wave Analytics as a platform in 2014, with plans to develop apps on top of the platform over time. After hearing from customers that it was too expensive and focused too much attention on the platform play and not enough on providing enough prebuilt apps for business users, Salesforce introduced its next iteration of Wave at Dreamforce 2015. In addition to a streamlined pricing model, the new version offers prebuilt sales templates and apps that make it easier for sales reps to get more value from their customer data.

Of most interest to me, however, was that Salesforce devoted more time to its strategy and solutions for SMBs than last year.

From SMB Startup To Enterprise Powerhouse

Salesforce.com website circa 1999, courtesy of Internet Archive Wayback Machine (https://archive.org/web/).

Salesforce.com website circa 1999, courtesy of Internet Archive Wayback Machine (https://archive.org/web/).

When Salesforce was founded in 1999, it was focused on the SMB market. As a cloud pioneer, Salesforce captured the market’s attention with its story of faster, easier, better and less expensive CRM. While SMBs were its target in the early going, the marketing genius of Benioff and a stellar sales team quickly moved Salesforce upstream, and capitalized on replacing enterprise dissatisfaction with Seibel to become the undisputed 800-pound CRM gorilla in the enterprise market.

To accommodate demands from large customers and a rapidly evolving market, Salesforce expanded its vision over the years to become what it now terms a “customer success platform.” Today, this platform encompasses many parts and solutions, including:

  • Multiple editions of its core CRM solution
  • A veritable storm of clouds (sales, marketing, service, community, etc.)
  • New Thunder and Lightning initiatives
  • More than 35 acquisitions, from ExactTarget to SteelBrick.

However, as I wrote in this post, Salesforce’s SMB Story: Great Vision, But a Complicated Plot Line, amid its enterprise success, the Salesforce story became harder for the average SMB to parse through. And, while the vendor offered relatively low entry-level pricing for it former Group Edition ($25/user/month), SMBs faced a steep jump to Professional ($65/user/month) if they needed more functionality that many wanted, such as pipeline forecasts, campaign management, contract storage and quote delivery, custom reporting and dashboards.

Either as a by-product or intentionally, Salesforce’s SMB story has evolved to focus on the “fast growth” SMBs and digital elite, where it has done an excellent job of capturing market share.

But when it comes the vast majority of SMBs the math is revealing. True, Salesforce is the #1 CRM vendor in SMB: SMB Group’s 2015 Routes to Market study shows that 25% of SMBs (1-999 employees) that currently use a CRM solution use Salesforce. However, 75% use other brands, from old-guard competitors such Microsoft and ACT!, to newer ones such as Insightly and Pipeliner. And then there are all of the SMBs still using Excel, email and/or basic contact management solutions.

Furthermore, according to Salesforce, about 150,000 businesses in total use its solutions, and about one-third of them (or 50,000) are SMBs. When you consider that there are roughly 6.5 million SMBs with employees (plus another 17 million or so solopreneurs) in the U.S. alone, Salesforce has barely scratched the surface in SMB market.

Salesforce’s New SMB Story

Recently, Salesforce has begun to refocus its SMB story, for a few reasons. In addition to the huge, untapped market potential, Salesforce sees SMBs as canaries in the coal mine in terms of requiring the simplicity and ease of use that all businesses—even large ones—increasingly demand from business application vendors. Salesforce also wants to tap into SMB diversity and innovation to help keep pits own focus fresh.

Screen Shot 2016-01-19 at 12.57.27 PMTo that end, Salesforce has recently taken a couple of big steps to refocus its SMB story, including:

  • Launching SalesforceIQ for Small Business at Dreamforce in September 2015. Positioned as “the smart, simple CRM to grow your business,” SalesforceIQ, at $25/user/month, replaces Group Edition as the vendor’s CRM entry point for SMBs. Based on the acquisition of RelateIQ, SalesforceIQ automatically captures, analyzes and surfaces customer information across email, calendars and other channels, using pattern recognition to provide users with sales insights and proactive recommendations.
  • Announcing a free integration between Desk.com, Salesforce’s small business customer service app and SalesforceIQ. The integration gives give SMBs a unified view of their customers, enabling them to provide the more connected, personalized experience that their customers will increasingly demand.

Screen Shot 2016-01-19 at 1.02.03 PMSalesforce also quietly rolled out Trailhead  in 2014, and then showcased it at Dreamforce 2015. Trailhead provides users, developers and administrators with a guided, learning path through the key features of Salesforce to help people get more value from Salesforce solutions more quickly. According to Salesforce, Trailhead earners have passed more than 1,000,000 challenges, earning more than 250,000 badges.

In addition, Salesforce’s AppExchange—one of the first and most successful app stores, which just celebrated its 10th birthday—offers more than 2800 applications that integrate with Salesforce). Many of these are SMB-oriented, and Salesforce continues to ramp up SMB partnerships and integrations, with vendors from MailChimp to Slack to Sage Live (link to blog) on board.

Perspective

There are many things I like about what Salesforce is doing in the SMB space. I think SalesforceIQ gives SMBs a much better bang for the buck than Salesforce Group Edition. Furthermore, the integration between Desk.com and SalesforceIQ gives SMBs a cost-effective way to improve their customers’ experience, and level the playing field against larger companies in today’s increasingly social, omnichannel world.

Salesforce’s ecosystem is also a huge plus for SMBs that are already Salesforce customers. The AppExchange makes it easier for SMBs to find apps that will work well with Salesforce, and reduce potential integration issues. Meanwhile, Trailhead is one of the most fun training programs I’ve seen in the business applications space.

But, Salesforce will need to do more if it really wants to become an SMB mainstay. First, of all, Salesforce needs to improve SMB segmentation and understanding. Sure, it gets those Silicon Valley startups, but it needs a deeper understanding of the broader SMB landscape and their diverse attitudes and requirements.

This leads to my next point, which is that the broader swath of SMBs still need a lot of business and conceptual education about how and why sales, marketing and customer service are changing, and what they need to do to succeed amidst these changes. Salesforce paved the way in educating SMBs about the big picture benefits of the cloud, it should have the same lofty goals in terms of educating them about the new customer journey.

In addition, Salesforce says that there is “a clear migration path” from SalesforceIQ to Sales Cloud. While it sounds like Salesforce can easily migrate data from SalesforceIQ to Sales Cloud, the applications are built on different code bases, and have different user interfaces. So its not intuitive as to how this works in real life in terms of user learning curves. As important, what is the strategy for all of the ISVs on the AppExchange that target SMBs? They’ve integrated with Sales Cloud offerings, not with SalesforceIQ. Since Salesforce is now pitching SalesforceIQ to SMBs, what do they need to do, and how will Salesforce help them? Another question is how does Lightning—and Thunder for that matter—fit into the SMB story?

That said, as evidenced at this event, Salesforce is listening, and is formulating plans to increase investments to educate and engage SMBs both locally and online. While engaging the broad SMB market is never easy, Salesforce has the right attitude, and the brand and budget to create a wider lens through which it can gain the pulse on SMBs it needs to capture SMB attention and market share.

Note: Salesforce hosted me at Dreamforce and paid for my travel expenses.