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Salesforce Acquires Vlocity for $1.3 Billion, Doubling Down on Industry Focus

While completing a record fiscal year 2020 with total revenues clocking in at $17.1 billion, Salesforce announced the acquisition of Salesforce Ventures–funded Vlocity, a leading provider of industry-specific cloud and mobile platform software. Vlocity is a cloud-native solution built on the Salesforce platform.

Salesforce has been building out industry-vertical-based solutions for some time now, with clouds for finance, healthcare, manufacturing, and consumer goods, among others. The acquisition of Vlocity demonstrates a deepening commitment to provide specialized and custom functionality to these industry sectors. Vlocity is a Salesforce Ventures–funded company to the tune of over $100 million and has been a Salesforce partner for the past six years.

Vlocity revenues for calendar year 2019 exceeded $100 million. With Vlocity's purchase price over $1.3 billion, Salesforce is paying a premium for the company and speaking loudly about the value proposition it believes Vlocity brings to the table.

The goal of Vlocity’s founders was to achieve business transformation with industry-specific solutions that are better, faster, and cheaper than both legacy solutions and those realized via expensive custom software developments. Vlocity founders David Schmaier and Craig Ramsey were early customer relationship management (CRM) pioneers with Siebel Systems and Veeva Systems. Ramsey also served on the board of Salesforce for eleven years.

With a focus on industries that have unique requirements and business processes, many paper-based and outdated, the founders had the vision of digitally transforming these staid legacy business processes. Vlocity builds digital customer engagement models to realize this vision and has enhanced the platform with AI and Internet of Things capabilities along the way. Core industry segments include media, communications, health, energy, utilities, and government.

Customized industry-specific process areas of focus include configure, price, quote (CPQ) processes, product catalogs, and contract management, among others. The company currently has three major software releases per year, aligned with Salesforce’s product release cycle. Key platform capabilities include:

  • Business process engine to model sales and service workflows in a no-code environment (drag-and-drop modeling).
  • Industry-specific consoles that incorporate personalized sales/service experiences.
  • 360-degree customer view for transactions and experiences.
  • External data integration capabilities.
  • Industry-specific offer engine with highly configurable options around personalized offers, recommendations, and rate/fee calculations.
  • Extended mobile capabilities, even to wearables.
  • Clickstream analytics for insights and trend analysis.

Source: Salesforce Sales Cloud at SoftwareReviews, Accessed February 26, 2020

Our Take

As Vlocity is built on the Salesforce platform, Salesforce should be able to integrate these products into the core more quickly than the previous acquisitions of Mulesoft and Tableau. Coupled with the existing differentiated industry solutions, Salesforce is preparing to extend its lead in the front- and middle-office CRM/customer experience space by offering industries solutions tailored to their unique requirements.

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