A genesis of cloud industry solutions with salesforce
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A genesis of cloud industry solutions with salesforce

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Whitepaper: Examination of a small but fast growing niche segment of the media industry based on a single cloud platform that delivers useful insights into the overall development of cloud computing.

Whitepaper: Examination of a small but fast growing niche segment of the media industry based on a single cloud platform that delivers useful insights into the overall development of cloud computing.

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  • 1. A genesis of cloud industry solutions withsalesforce.com in the context of onlineadvertising sales Author: Bernd Bube, CEO AvendioA couple of weeks ago I had a web demo with Steve from salesforce.com presenting ourforce.com based standard solution for online advertising sales. While appreciating it a lot todiscuss and exchange our experiences in the media industry he incidentally classified oursolution as a “Fourth generation cloud solution”.Being surprised for a while I thought: “Hey, is fourth generation good or bad? And whatgenerations were there before? If it is something positive this might be wonderful marketingclaim we could use.”So I began to think and cluster the different stages of our own solution history. Since weaccompanied this development almost from the start of salesforce.com, we walked with ourclients through the different stages of cloud-based IT projects and solutions in ad salessuccessfully.In a digital world where technology life cycles develop, grow and mature much faster thanever, structures and phases are often hard to define due to their complexity and diversity.Especially cloud computing is for many companies still a black box. Nevertheless, althoughthis document is just an examination of a small but fast growing niche segment of the mediaindustry based on a single cloud platform, the essence can hopefully be transferred to otherindustries as well.First generation cloud computing 2000 – 2003: Contactmanagement and sales pipelineIn the beginning of salesforce.com, only minor customizing was possible. Nevertheless, a lotof particularly smaller companies used it due to the easy setup without any further costs.Especially Early Adopters who failed with other solutions – mainly Client-Server CRM-Software – understood the advantages of a solution that offered a lot of • Account and contact management, opportunity forecasting (sales pipeline) • Customizing • Small Extensions • Home grown customizing – often not structured (“10 fields are better than 3”) • Sales pipeline with rough estimates and without often product and pricesAs generation #1 was mainly contact and quote management in combination with firstbusiness flow adoption the interchangeability of the system was high because only corefunctions of a CRM solution were used. These functions are delivered usually by any CRMsoftware.However salesforce.com was and still is successful in many companies because of theirstable multi-tenant platform and the innovation of the system. Even clients that still usesalesforce.com as an island solution stick with it as they are satisfied with stability, innovationand flexibility. 1
  • 2. Second generation cloud computing 2003 – 2006: Quotemanagement and calculationAlthough standard account and contact management as well as opportunity forecast used tobe one of the main requirements of the generation #1 companies usually had individualrequirements to be adopted. It was the time when cloud solutions were blamed to be verylimited in customizing and expandability.In our context quote management was one of the first extensions we developed in order toextend the core system. As there weren’t even formulas we had to extensively use the API inorder to externally calculate discounts, net prices, taxes and write the results back to thesystems. Our focus was at that time • Quote Management, IO • Product database • Discount calculation: Using API, later formulas, validation rules, relationships between tables • Manual exchange with other systems (automated csv – import and export) • First high level interfaces to internal systemsThird generation cloud computing 2006 – 2009:Integration and business process adoptionThe most important step in our company history: While being highly satisfied with thedevelopment speed and costs our clients decided to more and more shift not only externaldatabases to salesforce.com but also business logic. With integrating ad servers as deliverysystems all relevant information for sending out invoices and reports to agencies andadvertisers existed in salesforce.com. Our focus at that time was • Ad server Integration • Shifting external databases to salesforce.com • Billing preparation for external ERP systems • Adoption of advanced business processes like artwork delivery • Salesforce.com as the heart of companies IT environment • International Quote and Revenue ManagementThe cloud platform itself offered more opportunities in order to extend the system like in ourcase APEX coding. Demand for complex ERP systems, especially those with verticalbusiness process, dropped in client’s perception.Fourth Generation cloud computing 2009 – 2012:Standardization and internationalizationProjects got more complex. Although based on the stable and standardized platformsalesforce.com individual projects even in the same industry became harder to maintain.Furthermore, only larger companies were willing to spend six-digit-project-costs in order tosetup salesforce.com and to integrate their servers. You can recognize this by reviewing ourcustomer structure: Although working for 5 of the top 7 online marketers we were not able toattract marketers ranked from #10 on (the typical SMBs) at this moment. 2
  • 3. To counter this situation we came to the conclusion that the gap between a sophisticatedbusiness solution and immense costs can only be closed by standardization. We developedtechnology approaches that enabled access to a core cloud-infrastructure at lower costs forevery company size. While cloud-based standard island solutions (generation #1 and 2) andindividually integrated cloud IT infrastructures (generation #3) were available to only a smallaudience, the combination of both solutions leads to a multi-tenant cloud environment(generation #4) accessable to a broader target group. As it displays the whole businessprocess in one seamless work-flow within one system this cloud generation connectsdifferent departments of the company and generates thereby added value. • Platform based standard solution • Integration as a standard (“out of the box”) • Standard quote management • Heavily using internal APEX coding for media plan configuration (targeting) • Standard business processes • InternationalizationFifth generation cloud computing 2012 – 201X : Standardsolution for larger entities based on Enterprise EditionThe end of individual approaches: Industry processes become more and more complex andinternational which leads to an even higher demand for standardization. As an example theexchange of electronic quotes and confirmation of them as well as the electronic transfer ofthe reporting back to the media agencies will become more important for our clients and theiragencies. Integration to any company’s system performed by a strong middle ware isstandard.Global CFOs be aware of: Focusing more on international KPIs makes controlling easierbetween competitors and subsidiaries. The challenge will be maintaining a global fittingstandard even in larger cross media entities.Conclusions and across industry perspectiveTop down vs. bottom upBuilding classical software industry solutions with companies like Oracle or SAP seemed tobe more a top down concept in the past (starting with the Fortune 500 and the attempt to sellit to the medium sized businesses). Cloud computing thrives more from bottom up. EvenSalesforce.com itself started with SMB (and is attracting more big shots with their rapidlyfeature growing solution in the last couple of years).IntegrationFrom our understanding integration is the crucial brick in order to either anchor a cloudsolution in the companies IT-architecture as well as to build up standard industry solutions.Without integration into the companies business process a cloud solution will always be anisland solution where the advantages are just used to a small degree. The replaceability ofthe system is and will be high in this system environment as long as business processes arenot adopted. With deep process integration cloud solutions become to Third GenerationCloud Solutions and this is the start point of generating real value to the company. 3
  • 4. Paradigm changeCloud Computing is said to be a paradigm change. Cloud IT-projects and solutions aredefinitely different to classical client server projects: More agile at lower costs. The B2B-Cloud-Standard-Solutions are probably still in the early beginnings. Compared to B2Cparadigm shift with widely accepted companies like Amazon, Google or Facebook our B2Bbusiness seems to lag behind about 5 – 7 years. Even compared to classic client serverbased standard industry solutions the cloud solutions lag behind. But don’t get that wrong:With adopting complex business processes and logic as well as integration cloud solutionsbecome a powerful threat to existing installations and solutions today and may eliminate a lotof them in the next few years.Internationalization and market perspectiveThere is a clear shift to lean IT infrastructures and the willingness to outsource IT resources.Companies want to focus on their business not on taking care of their IT. The topic Softwareas a Service (SaaS) in B2B is still young but already holds immense possibilities forincreasing the productivity of companies. Cloud Computing based on a fully featured multi-tenant platform like force.com is a powerful instrument to integrate with and to mergeovercome IT systems to. For smaller entities an “industry dependent out of the box solution”like our online advertising sales solution ADvendio is a valid alternative as they usually haveto stick otherwise with paper work…Traditional client server solutions are more dependent on local markets – mainly becausesupporting it is more complex. By using cloud infrastructure the potential market gets globalwithout the need of running an office in any country of the world in order to sell and supportyour solution.Marc Benioff from salesforce.com used to question how likely it is to receive venture capitaltoday for client server based solutions in order to stress the innovation power of hiscompany’s platform. It is definitely more likely to capture capital to built up something similarto salesforce.com, no matter how bold this plan might be.When we observe companies’ traditional IT-Infrastructure that has been overcome by the lastcouple of years and has to be replaced in order to be fit for digital business and itsrequirements there seems to be quite a big market. Add the thousands of companies thatcould not afford bigger projects in the past and may now benefit from cost efficient platformbased standard solutions, you can easily understand what tremendous opportunities in B2B-Cloud-Computing are available.But there are hundreds of niches where an industry solution based on the infrastructure ofAmazon or salesforce.com can be a valid business. Maybe venture capitalists should focusmore on B2B in the future … 4