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Renegotiating a Salesforce software agreement? It could take up to two years
Salesforce complexity can be 'difficult and expensive to govern', especially for multicloud, warns Gartner
The set of enterprise technologies acquired by Salesforce in recent years, together with its own applications, have proved "more difficult and expensive to govern than expected for many customers," says Gartner.
The global tech analyst offered a balanced view of the SaaS company in a research report, saying Salesforce was "strong" in both its strategy and corporate viability. However, its overall rating had fallen from "strong" to "positive".
For context, Gartner offers a five step rating, with the first three being "weak", "caution" and "variable." Salesforce's rating for products and services also slid, dropping from "strong" to "positive."
"IT leaders should monitor the evolution of the company's product lines and underlying technologies, as the growing complexity of its 'multicloud' portfolio makes it more difficult and expensive to govern than expected for many customers," the research firm added.
While these multicloud solutions differentiate Salesforce from competitors, many Gartner clients have expressed confusion about which specific Salesforce products they are actually buying and implementing.
"Salesforce's burgeoning and highly matrixed solution sets provide users with a high degree of flexibility, but the options are often not clear to customers. Its approach to product packaging and bundling is still evolving to support the prevailing trend of composable applications."
In Gartner's view, a composable approach allows businesses to be more flexible and adaptable by knitting together software with APIs to create tools to run specific business processes, rather than adopting processes to the vendor's best practice design in a single, monolithic application.
Another challenge businesses face when dealing with Salesforce sits on the commercial side: its breadth of products makes setting out a negotiating position time consuming.
"Manage Salesforce product spend holistically, including Tableau, MuleSoft and Slack investments. Customers are not always aware of the breadth of their Salesforce product estate and spend," Gartner advises.
The broader recommendation is that Salesforce customers plan between 18 months and two years in advance of their software agreement renewal dates if they have a "deep or wide footprint" of Salesforce products.
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"Plan for the possibility of moving all, or part, of your Salesforce portfolio elsewhere. Introduce competition when increasing Salesforce volumes at renewal or buying into new clouds such as MuleSoft or Tableau. Create negotiation leverage at renewal, particularly if the intention is to reduce volumes in any cloud," Gartner recommends.
Salesforce is set to become a $30 billion annual revenue company by February 2023, representing 20 percent year-on-year growth. Partly through acquisition, it has added 30 percent more staff in the past fiscal year.
Gartner also pointed out Salesforce's short-comings in industry-specific products, which the vendor is still developing. Clients in healthcare, for example, have experienced challenges in configuring and customizing Salesforce Health Cloud for their needs. "These clients indicated that the implementation quality and out-of-the-box capabilities did not live up to promises. Gartner believes that the data models of its industry solutions are variable in their maturity," the analyst said.
The Register has asked Salesforce to respond to Gartner's report.