Until now, many B2B SaaS companies have been using tactics to expand their scale based on this after securing a base with one of their main specialties. In addition, it was the first to expand the market globally rather than to expand the product area.
However, these days, as there are several large B2B SaaS companies that are in control of global businesses, the number of places that use growth strategies through product expansion has also increased considerably. This has become a trend among some large B2B SaaS companies.
As a result, it is becoming interesting to compete in the B2B SaaS version. Companies that had nothing to fight in the past are turning into competition here and there.
It is not as big as Salesforce and Salesforce, which are synonymous with B2B SaaS, but it is also a service now relationship that is known as one of the big companies in the B2B SaaS world. The two companies did not have much to fight in the past, but they have been turning into fighting over strategic points for business.
B2B SaaS version of two big names heralds a head-on collision
Salesforce started with cloud-based customer relationship management (CRM) in 1999, and ServiceNow jumped into the B2B SaaS version as its main specialty in cloud-based IT service management platform in 2004. Since then, the two companies have grown separately in their respective main markets. There were not many conflicts.
But the current situation is very different, even though it is different.
According to a recent business insider report, the two companies are increasingly competing one-on-one over their core business these days.
The biggest battleground between the two companies is the customer service platform area. There is also a strong nuance among partners who sell Salesforce products that they see Service Now as the biggest real threat.
Those who watch the B2B SaaS version seem to share a similar view. In particular, Service Now, a latecomer, is paying attention to the situation in which it is helping the sales force as it expands its business. ServiceNow has actively recruited talent, including executives and general employees, across Salesforce AI and Service Cloud divisions.
It is not only in the position where the sales force is on the offensive.
Salesforce’s current flagship products are aimed at the front office, but recently, the back office (meaning support department) solution, which is the main market of Service Now, is also being strengthened. In the meantime, as Service Now rapidly expands to B2B SaaS for front offices, the two companies are invading their main markets.
Salesforce started with CRM but expanded to SaaS for business through the acquisition of Slack. Prior to the acquisition of Slack, it acquired MuleSoft, an API management company, and Tablo, a data analysis platform, and Salesforce is evolving beyond CRM into a cloud-based enterprise software platform.
In terms of sales, the two biggest businesses of Salesforce are sales clouds aimed at sales managers and service clouds provided to service employees. In the case of the service cloud, it generated $1.7 billion in sales last quarter alone.
Service Now is taking a course to start with IT service management and expand to areas that support customer service or employee experience improvement. It seems to be aiming for the main sales force market for growth. It is said that companies can make and use simple CRMs by using the Service Now platform, which is based on no code. For the sales force, it must be uncomfortable.
We will have to fight more and more in the future
According to Business Insider, employees and workplace management tools are also emerging as a battlefield between the two companies. Salesforce has put forward its vision to become a digital headquarters for companies after acquiring Slack, and the employee management software market, which Service Now has worked hard on, is also rapidly penetrating.
Both companies also unveiled tools to support vaccine management and distribution. The two companies are also fighting over tools that help them manage sustainability efforts, including environmental, social, and governance (ESG).
The accuracy is being captured that the scope of the fight is beyond the one-on-one confrontation structure.
ServiceNow is strengthening its cooperation with big tech company Microsoft, one of the most uncomfortable companies for Salesforce. According to protocol reports, Service Now has been using Slack as a communication tool, but after Salesforce acquired Slack, it changed to Microsoft Teams.
Salesforce and ServiceNow are both large companies in the B2B SaaS market. In terms of market capitalization, Salesforce is currently approaching $200 billion, and Service Now is more than $100 billion. Last year’s sales were $26 billion for Salesforce and $6 billion for Service Now.
As both companies are listed, it is inevitable to show investors their growth potential in numbers, and analysts predict that the scenes of the two companies hitting and fighting will be seen more often in a market that seems to be worth some money.
It was the same when on-premise software was leading the market. Software companies that have achieved some scale have taken a growth course that expands to other markets. Specialized companies in each field also bought aggressively. Companies that use a lot of power in the enterprise software market, such as Microsoft, Oracle, and SAP, have all grown like this. In the process, the situation in the enterprise software industry has been reorganized mainly by several large companies.
From the standpoint of watching, this trend seems to be increasingly prominent in the B2B SaaS market. SaaS companies with specific specialties in various fields continue to emerge, but among companies that have achieved economies of scale, the so-called integrated platform, which secures various product lines, is becoming an increasingly important growth strategy.
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by Sasquachi
