skip to main content
Close Icon We use cookies to improve your website experience.  To learn about our use of cookies and how you can manage your cookie settings, please see our Cookie Policy.  By continuing to use the website, you consent to our use of cookies.
Global Search Configuration

Ovum view

Summary

Salesforce's success at software-as-a-service (SaaS) level is widely acknowledged and well documented, but this is less the case when it comes to its role as a platform-as-a-service (PaaS) provider. Salesforce is the largest PaaS provider in the market segments in which it operates, but the second-largest provider when taking the whole of the PaaS market into consideration. Faced with competition from much larger and richer vendors, Salesforce will not remain in second place for long. However, it will only diminish in prominence, not importance, so make sure to keep it at the top of your PaaS agenda.

Expect PaaS to become more prominent in Salesforce's messaging

PaaS generates only 16% of Salesforce's subscription revenue, but it is critical to the company's past and future success. Given the growing importance of PaaS, Ovum expects Salesforce to increasingly emphasize its PaaS service portfolio in the next few months, with a message that showcases not only the means (PaaS services and ancillary tools), but also, more importantly, the end (the applications). This application-centric view of PaaS will enable Salesforce to expand its PaaS-related conversations with customers from an IT audience to a business executive audience. When talking to the company, make sure both audiences are involved.

PaaS's contribution to the company's success will continue to increase, not only in terms of revenue, but also when it comes to achieving more balanced growth. Growth will stem from both Salesforce's homegrown PaaS platform (Force.com) and its acquired PaaS platform (Heroku), although Force.com will continue to generate the greatest revenue. Salesforce is expanding the breadth and depth of Force.com's services to encourage enterprises to use it not just to customize SaaS clouds, but also to create new applications – some of which are related to its SaaS capabilities, whereas others are completely independent.

Many large customers, such as GE, have only just started to expand their portfolios of Force.com-based applications, and recent developments, such as the Community and Analytics clouds, will fuel its momentum. Salesforce is also generating an increasing amount of revenue from ISVs selling software on its AppExchange marketplace. Salesforce charges them either 15% or 25% of the net revenue derived from their applications, depending on the way they choose to make them available.

Appendix

Further reading

Force.com: How Salesforce's Core PaaS Solution is Evolving, IT0022-000397 (July 2015)

Salesforce1: Evaluating Salesforce's New Unified PaaS Platform, IT0022-000396 (July 2015)

Force.com Development: Selecting the Right Development Approach, IT0022-000398 (July 2015)

Force.com Development: Managing the Development Process, IT0022-000399 (July 2015)

Force.com Development: Security Considerations, IT0022-000423 (July 2015)

Force.com Development: Leveraging Analytics and Community Services, IT0022-000424 (July 2015)

Force.com Development: Selecting the Appropriate Mobile Application Services, IT0022-000425 (July 2015)

From Force.com to Heroku: Finding The Right Balance, IT0022-000436 (July 2015)

Force.com Development: Integration Services and Marketplace, IT0022-000437 (July 2015)

Ovum Decision Matrix: Selecting a Digital Marketing Platform, 2015–16, IT0020-000135 (July 2015)

SWOT Assessment: Salesforce Marketing Cloud, IT0020-000124 (June 2015)

"Microsoft and Salesforce’s special relationship starts to bear fruit," IT0021-000090 (June 2015)

"Salesforce platform attempts to disrupt corporate HR," IT0020-000121 (May 2015)

"The Sage and Salesforce global strategic partnership gives small businesses a big digital leg-up," IT0020-000119 (May 2015)

"Heroku supports mobile app development with new Elements marketplace," IT0022-000347 (April 2015)

"Salesforce elevates its digital service with intelligent routing capabilities," IT0020-000104 (March 2015)

SWOT Assessment: Salesforce1 Platform, IT0022-000230 (March 2015)

"Salesforce embraces third-party enterprise file sync and share solutions," IT0021-00005 (December 2014)

"Philips and Salesforce join forces behind a new connected healthcare platform," IT0011-000323 (July 2014)

Author

Laurent Lachal, Senior Analyst, Ovum Software

laurent.lachal@ovum.com

Recommended Articles

  • Service Provider Markets, Consumer & Entertainment Services,...

    MWC 2018 Highlights

    By Ronan De Renesse 27 Feb 2018

    Over 20 of our senior Ovum analysts and consultants attended this year’s Mobile World Congress in Barcelona at the end of February. In between meetings, briefings and presentations, our analyst team were blogging and tweeting about key developments, trends and rumors. Have a look through our daily MWC 2018 Highlights to find out what happened.

    Topics 5G AI IoT Cloud Payments SDN/NFV Smart home

  • Enterprise Decision Maker, Enterprise IT Strategy and Select...

    2017 Trends to Watch: Big Data

    By Tony Baer 21 Nov 2016

    The breakout use case for big data will be fast data. The Internet of Things (IoT) is increasing the urgency for enterprises to embrace real-time streaming analytics, as use cases from mobile devices and sensors become compelling to a wide range of industry sectors.

    Topics Big data and analytics IoT

  • Consumer & Entertainment Services

    US pay TV: Is it facing an existential threat?

    By Adam Thomas 28 Mar 2018

    With US pay TV having endured the worst year in its history, thoughts have inevitably turned to the future. The likelihood remains that the immediate future will remain highly uncomfortable for everyone except the scaled multinational digital platforms.

;

Have any questions? Speak to a Specialist

Europe, Middle East & Africa team - +44 (0) 207 017 7700


Asia-Pacific team - +61 (0)3 960 16700

US team - +1 646 957 8878

+44 (0) 207 551 9047 - Operational from 09.00 - 17.00 UK time

You can also contact your named/allocated Client Services Executive using their direct dial.
PR enquiries - Call us at +44 7770704398 or email us at pr@ovum.com

Contact marketing - 
marketingdepartment@ovum.com

Already an Ovum client? Login to the Knowledge Center now