Salesforce spends $1.3 billion on buying Vlocity

Just days after snapping up Evergage, the personalisation and customer data platform, Salesforce revealed it had acquired again. This time spending $1.3 billion on Cloud and Mobile Software ISV Vlocity, which is built on the Salesforce platform and in which Salesforce Ventures already held a stake.
Where Evergage provides companies with relevant, data-driven experiences across a wide range of channels, San Francisco-based Vlocity delivers industry-specific cloud and mobile software to six key verticals – communications, media & entertainment, energy & utilities, insurance, health and government.
The firm had gained 150 customers in its 6 years of operation, including key telecoms players such as BT, CenturyLink, Claro, Frontier Communications, ID Mobile, KCOM, KPN, Optus, Orange Poland, Rogers, Sky, Sunrise, Telfort, Telia, Telstra, Telus, T-Mobile for Business and Vodafone, and was on track to make $70-80 million this year.
Its telecoms deployments were both B2C and B2B. At Telus, for example, it supported an initiative to improve service quality for SMEs. This meant accelerating time-to-market for new offerings, reducing handling and quote-to-order times, and providing a consistent experience across channels. Vlocity, which provides omnichannel sales, marketing, service, product catalog, CPQ, contract management, order management and analytics applications tailored for the needs of service providers, helped Telus cut the time to produce quotes and its Average Handling Time (AHT) in half. Vlocity deployed its telecoms cloud applications in a matter of months, at what it claims was half the cost of existing applications.
Vlocity’s Go Digital solution combines its Communications Industry Cloud applications with capabilities from realtime digital commerce ISV Matrixx. The result is an out-of-box, pre-integrated solution for digital service providers that provides realtime usage visibility, realtime account control, personalised offers, mobile onboarding, omnichannel customer experience, guided selling, catalog-driven bundles and offers, and a high-performance hybrid cloud platform.
The importance of verticalised offerings is something that Vlocity’s founders – who had previously worked at Siebel and the Salesforce-native ISV Veeva – understood really well. As CEO David Schmaier said: “The best customer experiences are industry-specific”. The company had set out to replicate the success of Veeva, which is now valued at over $22 billion – but across a wider range of verticals. However, it has been snapped up by Salesforce before it got the chance to fully realise its ambitions.
Omnisperience’s view
Vlocity’s solutions complement Salesforce’s own strengths in financial services, health, manufacturing and consumer, and underline the vendor’s ambitions to create a comprehensive verticalised portfolio. There have been rumours for months that Salesforce would buy Vlocity – partly to increase its own capabilities but also defensively because other buyers were said to be interested. There are two things for B2B service providers to consider.
The first is that Salesforce’s reputation as a CRM vendor seriously underestimates its capabilities across the business support systems (BSS) layer of telecoms software in both B2B and B2C. As such it offers a way to overcome the limitations of legacy solutions and provide a more consumerised and digital experience to B2B customers. This is extremely important for service providers seeking to address the SME and nanobusiness sectors. While there are other ISVs offering Cloud based BSS and OSS, the size and strength of Salesforce makes it a formidable competitor to both legacy software companies and cloud natives. The Telus case study – and other deployments – show it is a serious threat to legacy BSS vendors who take years to overhaul software not months.
The second important point is that Vlocity’s relationship with Matrixx is a critical part of its telecoms digital commerce solution. Bringing Matrixx’s capabilities fully in-house surely must be something Salesforce is now considering.

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