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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 ( and its acquired PaaS platform (Heroku), although will continue to generate the greatest revenue. Salesforce is expanding the breadth and depth of'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 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.


Further reading How Salesforce's Core PaaS Solution is Evolving, IT0022-000397 (July 2015)

Salesforce1: Evaluating Salesforce's New Unified PaaS Platform, IT0022-000396 (July 2015) Development: Selecting the Right Development Approach, IT0022-000398 (July 2015) Development: Managing the Development Process, IT0022-000399 (July 2015) Development: Security Considerations, IT0022-000423 (July 2015) Development: Leveraging Analytics and Community Services, IT0022-000424 (July 2015) Development: Selecting the Appropriate Mobile Application Services, IT0022-000425 (July 2015)

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


Laurent Lachal, Senior Analyst, Ovum Software

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