During Salesforce’s August earnings call, investment firm Stifel’s managing director Tom Roderick asked its CEO Marc Benioff about RelateIQ, the sales intelligence startup it bought for $US390 million last year, and how he plans to integrate it with the broader business.
Benioff, well-known for making long, often exaggerated answers, gave an unusually succinct response: “I think you’re going to have to come to Dreamforce because it’s going to be one of the most exciting announcements that we have at the show.”
It’s been almost a year since RelateIQ’s acquisition, but Salesforce hasn’t really made much use out of its technology so far. But Roderick believes RelateIQ will grab the spotlight at the upcoming Dreamforce, the massive, four-day annual conference Salesforce will host next week.
“I think you’ll hear a lot more about RelateIQ at Dreamforce. If you’ve been following Benioff on Twitter last month, he’s been very vocal about RelateIQ. Perhaps we’ll end up seeing this transformed, new cloud software around active intelligence in the enterprise,” Roderick told us.
Relationship intelligence platform
RelateIQ, founded in 2011 by two guys from security company Palantir, was one of the fastest-growing sales cloud products before it got acquired by Salesforce in July 2014. In fact, during an earnings call last year shortly after the acquisition, Benioff said he paid a $US145 million premium on the company after hearing rave reviews about it from some of the top CEOs:
I have a dinner every month that I attend with 10 to 15 CEOs of mostly very strong and emerging companies. …And two of them looked me in the eye — and this never happened before — and they said, “You really need to buy RelateIQ.” I said, “Why?” They said, “We use Salesforce but we use RelateIQ also. It’s an incredible complement to your future.” I knew about RelateIQ. I used it. I started to spend a lot more time with it and I saw exactly what they were talking about.
So what exactly does RelateIQ offer? It’s best known for extracting meaningful data out of your personal relationships, by sifting through your calendar, emails, or even social networks, and automating a lot of the sales process. It could recommend the right person to follow up for a certain sales call, or when to send an email to maximise your chances of closing a deal.
“It looks at your underlying activity and helps your teammates figure out who knows who the best, so you can have the best relationship possible with a customer or partner, or any type of relationship you might have,” RelateIQ cofounder Steve Loughlin told us in a previous interview. “On top of it, it helps these people with these intelligence so they can make better decisions on a day-to-day basis and save a bunch of time.”
More intelligence but no immediate financial impact
It’s unclear how Salesforce will integrate RelateIQ into its products. But Roderick said it will likely be baked into Salesforce’s core sales cloud and possibly branch out to other products.
“There’s some automated intelligence that they do well to roll into the core product, but potentially it could wrap it around other products too,” he said. “The promise of RelateIQ is that it has capability to make the next step intelligently and proactively identify items that a salesperson should be thinking about.”
But whatever the product is, it’s probably not going to have much of an immediate impact on Salesforce’s overall revenue, said Steven Koenig, analyst at Wedbush Securities.
“We don’t know enough about what they’re going to announce, but no matter the announcement, these kinds of product launches take time to gain traction in the market,” he said. “So it’s not an immediate needle mover for revenues. But depending on the scope of the announcement, it could be powerful longer term.”
In any case, Benioff and Salesforce cofounder Parker Harris seem to be extremely impressed with RelateIQ. As Loughlin told us in a past interview, “We showed Marc and Parker what we were building, and they instantly got it. They kind of saw the vision, immediately got it, and started fast-forwarding to what we could do together. I remember walking away from some of those first conversations, thinking, ‘holy cow.'”
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