While industry cloud offerings are rising in popularity, they also present enterprise challenges and complexities. Service providers can help customers overcome obstacles by enhancing their capabilities with Salesforce Industry Clouds. Discover five essential strategies for providers to unlock the benefits of the Salesforce platform tailored to specific industries.
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Present and future adoption of industry clouds
Industry clouds are computing platforms customized for specific industries, offering a mix of industry-specific applications, data models, and cloud services. Major enterprise platforms such as SAP, Salesforce, Oracle, and Microsoft Dynamics aim to improve industry cloud offerings in 2024 to provide benefits such as accelerated innovation, improved efficiency, and enhanced security and compliance.
The industry cloud is currently in the early adoption phase, where the core focus is to identify industry-specific whitespaces, establish business cases for industry-specific offerings, and improve enterprise adoption readiness. We expect a significant increase in these specialized solutions across the enterprise application portfolio in the next five years.
Salesforce industry cloud adoption and challenges
Salesforce stands out with the most robust portfolio, generating about 18% of its revenue from industry cloud offerings, surpassing other enterprise platforms in this domain. Based on market interactions from our recently concluded PEAK Matrix® Assessment and State of the Market Report, we expect this number to increase to 40% by 2025, establishing Salesforce as a significant player in this market.
Enterprises experience various challenges with Salesforce Industry Clouds. Let’s explore areas for improvement that Salesforce and its partners should address to increase customer satisfaction in 2024:
- Integration – Salesforce has expanded over the years through numerous acquisitions of startups and industry-specific solutions, with MuleSoft, Tableau, and Slack among the larger deals. Integrating new offerings within and outside of the Salesforce ecosystem remains a top challenge for many enterprises
- Customization – Enterprises often find Salesforce Industry Cloud offerings difficult to customize as it may require purchasing add-ons or custom integrations to meet specific needs, resulting in increased overall cost and implementation complexity
- Product maturity – Recently launched industry clouds, such as communications, life sciences, media, and energy and utilities, are in the early maturity stage and lack strong proof points. Many industries also are not aware of the difference between Salesforce Industry Clouds and non-industry cloud offerings
- Talent – Industry-specific expertise is in short supply. Only about 5% of the global Salesforce service partner ecosystem has the required in-depth knowledge of key Salesforce industry products to meet complex enterprise needs. Furthermore, talent possessing thought leadership in two or more industries is scarce
- Change management – Organizations are not adequately prepared to adopt Salesforce Industry Cloud and service providers lack the expertise in handling change management related to implementation. This is primarily because service providers do not offer most of these activities or enterprises manage them internally
Service partner ecosystem imperatives in 2024
In response to enterprise demands, service providers must gradually increase their investments in building strong industry-specific service capabilities in these key areas:
- Identifying industry-specific whitespace – As Salesforce continues to focus on improving margins and driving profitable growth, product innovation becomes a partner ecosystem imperative. Service providers should invest in identifying use cases and building solutions intersecting Artificial Intelligence (AI), data, and customer relationship management (CRM) for specific industries since these are key areas where most existing Salesforce users are looking to invest
- Building talent – Service providers need to develop industry-specific tech talent expertise by strengthening internal learning and development (L&D) programs and initiating industry hiring because the Salesforce certification program has limitations in building industry-specific skills
- Optimizing cost – Enterprises want to add industry-specific capabilities and also optimize the overall licensing spend. Providers can alleviate enterprise concerns around industry cloud adoption by helping enterprises negotiate better software purchase agreements and improving license utilization through benchmarking against industry peers
- Developing thought leadership – Many enterprises today grapple with understanding the industry cloud’s future, and some also find it hard to differentiate industry cloud from non-industry cloud offerings. To help enterprises overcome these challenges, service providers should invest in building thought leadership
- Investing in change management – Service providers should consider broadening their focus on providing advisory services and effective change management services across the industry cloud. This is a potential growth area as user adoption continues to challenge the broader Salesforce services portfolio and enterprises are expected to make significant investments in these areas this year
Everest Group will continue tracking this market and analyzing its evolution. For the latest insights, watch for the next version of the Global Salesforce Services PEAK Matrix® Assessment, which will be released in May. To discuss Salesforce Industry Clouds, please reach out to [email protected] and [email protected].
Join the webinar, Adapting to Change: Boost Value in Outsourcing and Software Contracts When Uncertainty Persists, to learn current pricing trends and how enterprises can find greater value and lower costs in their outsourcing, Cloud, and SaaS contracts in the new year.
