Digital Mainstream: The Salesforce.com Cloud Computing (Essay Sample)

Salesforce.com Cloud Computing
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Salesforce. Com is one of the amazing technology companies in the software industry. Salesforce majorly operates with application software solutions and customer relation management services offered over the internet. As a result, most of its business transactions are based on the on-demand model eliminating the need to have stored for hardware and software inventories. The company sprung up in 1999 and grew rapidly through the effort of the former Oracle executive, Marc Benioff. After ten years in business, Salesforce registered a revenue of $1.3 billion making trend as one of the top 50 companies in the software industry around the world.
A combination of technological, managerial and organizational problems remain a challenge to this company. The cause and effect of these challenges stem from varied dimensions. The software market structure is rapidly changing. Competition is on the hike. The forces of demand and supply shifts based on specific factors. Marketing platforms and models vary based on the consumers’ needs. Both traditional vendors and new companies have stormed the software and customer relation management markets using refined approaches with the hope to replicate Salesforce’s success standards. Microsoft, Oracle, and SAP are among the major competitors that have started offering their customer relation management and software application product on subscription-based versions. Other small competitors including Salesboom.com, RightNow, and NetSuite have also shown interest and invested in the Salesforce market share. The implication all this state of affairs is that Salesforce has to reorganize itself to convince its old and potential subscribers of its worthiness and reliability to continue handling their applications and corporate data. Security breach due to the changing courses of technology and unchanging management technique also pose a great challenge to Salesforce information technology services. In 2007, for instance, a Salesforce employee was tricked to divulge the personal, corporate password to scammers. As a result, the company’s list of customers got exposed, and clients were subjected to risk of corporate hacking.
Another challenge resulting from increased of competition is restructuring the business model. The company bused to operate an on-demand model frequently complete through the internet. Products were only prepared and delivered when there were signs of imminent demand in the market. With the rise in the number of companies in the same business, things have greatly, changed. Customers no longer make decisions on demand, but they often weigh the available options based on their strengths and weaknesses.
Available alternatives
Evidently, Salesforce has to formulate new ways and strategies to reposition itself in the cloud computing market. There are ranges of available options the company might consider. First, a partnership with some of the big wagon companies in the world of technology can be awesome. Approaching companies like Google, Apple, and HP and involving them in a combined App business management and promotion through Ads, system integration, and circularization can help the company improve its functionality. Joint Ventures is also an important strategy the company might consider. Operating in a torn market on a single basis can be challenging because subscribers often make their decision based on what they anticipate for the future. The move to combine its services with such companies as Google Talk, Google Docs, Google Calendar and The Gmail was, therefore, an excellent idea.
The usage of iPhones has rapidly increased over the last five years, probably, because of the quality standards to which they are associated (Kang & Wei-Min, 2009). Salesforce being a mobile application vendor as well, may consider targeting the iPhones users through the Apple Company to supply them with mobile applications. With this move, the Salesforce will be able to improve its market share especially in the Apple oriented counted countries like the U.S. Away from that, corporate branding remains significant to the amount of the market share any company can control. Without proper and unique branding, Salesforce may not be able to wage adequate competition against its fellow market bidders. Therefore, to brand itself, the company must look at the various untapped opportunities in the industry, its strengths, weaknesses and possible threats. Similarly, performing SWOT Analysis of its major competitors like Microsoft, IBM, and Oracle would be paramount to formulating strategic improvement plan.
The Salesforce should emphasize on such constructs as quality, security, reliability, and costs which are often significant determinants of the customers’ decision criteria in the cloud computing business. High-quality services, relevance, constant reliability, and strong security of the subscribers’ data always attract them to companies offering services of that nature. By employing these properties within its business model, Salesforce will not only get the attention of the large crowd, but it will also expand its market share.
According to McWilliams, Siegel and Wright (2006), Corporate Social Responsibility (CSR) has currently gained popularity in the current business strategic management. Companies that often engage in activities aimed at improving their surrounding environment besides their primary business objectives often develop strong public, relations, positive public image, and strong customer relation channel. As a result, such companies often stand a better chance of attracting more customers than their competitors, improving subscription levels as well as their sales revenues. Saleforce.com is not an exemption. Participating in public activities can help the company raise a strong competitive edge over its potential competitors. Although Corporate Social Responsibility is sometimes criticized that it reduces the profit margin of business, advantages of integrating this strategy often outweighs its limitations. Therefore, by choosing CSR as a strategy, Salesforce does not stand a chance of cutting its profits. However, there is a high probability that sales revenue will increase and even surpass the initial record of $1.3 billion because of loyalty of its consumers.
Another significant strategy Salesforce should consider is Buy-in. Evidently, numerous small companies offering products and cloud computing services similar those offered by Salesforce.com are have sprung up. Being that it has an elaborate business model, strong capital base, initial popularity and the advantage of large economies of scale, Salesforce might consider buy-in these small companies arising in the software, integrate them within its circles and ensure no more such companies starts up. With this move, controlling the software and the customer relation management markets will not be a hard task to roll. The impact of buy-in is that the initial companies dissolves itself and renders all the assets less liabilities to the buying company (Salesforce) in exchange for cash. Also, the Salesforce’s capital base together with its liquidity ratio improves suggesting a prosperous future engagement like further investments and increased operations.
Organizational and management challenges often come as a result of weak internal controls, lacks of efficient market knowledge, shortage of skilled labor and insufficient cash flow issues among other. All these are evident within the Salesforce management structure. Eliminating these challenges require the organization to have a well-balanced strategic plan for it workforce, internal controls, and information technology. The implication is that Salesforce has employed new technologies available for monitoring, assessment, and projection of the market changes likely to influence its profitability and dimension of cloud compounding services in the current and future market. Cloud computing and software applications markets change day in day out and having such updated information at finger tips will prevent Salesforce.com from instances of information asymmetries and opportunism of which competitors may take advantage.
Evaluation of alternatives
In business, every line of action proposed or taken often come with its advantages and disadvantages. The options discussed above are ways through which Salesforce might increase its functionality in both the current and future market of cloud computing and customer relations management. They require different levels of resources, commitments, skills, inventions and innovations suggesting that the company must tread carefully in evaluating and implementing them.
Buy-in strategy, for instance, requires the company to have sufficient financial resources, the better convincing power to lure the new companies to their offer, and adequate compliance with the regulatory requirement of corporate purchase contracts. The biggest challenge in this engagement is that it is not easy to take over a company without acceptance of the owners because regardless of their size, they are also optimistic about a better future (Sengupta, Kaulgud & Sharma, 2011). Salesforce must, therefore, chart proper means to effect the buy-in strategy. Evidently, gathering enough financial resources to meet the purchase, improving its liquidity level and maintaining highly skilled personnel who can easily convince lure the potential competitors to sales contracts.
Partnership with bandwagon technology companies like Google, Apple and HP may also on the side be of great benefit to Salesforce while on the other side, it may pose some serious challenges as well. Google, Oracle, Google, and HP produce a wide range of te...