SAP Versus Salesforce: Is Marc Benioff Missing the CX Boom?

After two uninterrupted decades of outmaneuvering every competitor and embracing The Customer earlier and more intimately than anyone else, is it possible that Marc Benioff, Salesforce CEO and global thought-leader, has been so wedded to CRM that he’s missed the CX revolution?

Salesforce #3, SAP #5 on Cloud Wars Top 10

Has Benioff let rival SAP outflank Salesforce and grab the new high ground of CX? (On my Cloud Wars Top 10 weekly rankings, Salesforce is #3 and SAP is #5.)

Across not only the tech industry but more importantly in the minds of customer-side C-suites, has CX (customer experience) become the digital-native model for the future while CRM—the idea that Benioff more than anyone else turned into a global movement—eases its way into a comfy spot on The Shelf for Antiquated Technologies?

Or has Salesforce, by virtue of its $20-billion revenue mass, its 25% annual growth accelerator, and its remarkably charismatic CEO, transcended the confines of 3-letter acronyms—and now with CX, 2-letter acronyms—and forged its own category?

From the perspective of rival SAP, CX will eventually win out over CRM because the former is rooted in the deep and wide-ranging relationships while the latter is simply a large-scale transactional mechanism for turning a lead into a sale.

Where does CRM end and CX begin?

In a Zoom conversation last week, I asked SAP executive board member Thomas Saueressig, who leads the entire company’s product-engineering efforts, to share his views on the differences between the CX model championed by SAP and others, and the traditional CRM approach embraced by Salesforce.

“CX is absolutely strategic for us,” Saueressig said. “The Emarsys acquisition also signals that we’ve doubled down on that commitment or we would not have acquired a company in that category.”

Acquisition of Emarsys fills critical void

Emarsys is scheduled to formally become a part of SAP in the near future following regulatory approval. The acquisition will close “a wide gap between commerce and the [SAP] customer-data platform to fill the customer-engagement piece at scale. This is a particularly important opportunity these days with the coronavirus and with omnichannel certainly becoming the new norm for everybody,” Saueressig said.

In his view, the combined strategy of CX plus ERP gives SAP the edge over Salesforce because it enables businesses to expand their customer-centric data, insights and workflows from end to end. Salesforce can’t match that because it doesn’t offer any ERP solutions. (For some deeper thoughts on that, please see Can SAP Leapfrog Salesforce by Going All-In on CX plus ERP?)

Learning from every customer interaction

“We can combine data from Emarsys for the personalization leverage across more than 3 billion profiles,” Saueressig said, “and our customer-data platform also can then connect all the transaction history we have anywhere in our systems. And by the way, as I mentioned, this is particularly important for the returns process because now we can know exactly what was returned for example was it returned because of the size or whatever so we can then leverage that knowledge again for a new promotion to recommend something very specifically for that individual.”

These new customer-centric capabilities don’t require any customization—“all of this comes out of the box with our new CX platform,” Saueressig said. 

And that complete 360-degree view of the customer, plus the operational capability and flexibility to be able to act on that view beyond CX/CRM and into production and fulfillment and logistics is what differentiates SAP’s CX from Salesforce’s CRM.

Why the CX-to-ERP interconnection is so crucial

“You can then imagine all of this at scale and that’s why the complete connectivity of all processes and data between front office and back office is so critical,” Saueressig said.

“That’s something that some companies cannot do today but they have to find a way to do that because the only way to deliver great customer experiences is by being able to go end to end.”

Benioff’s focus is more on digital transformation, less on customer experience

Going by one of the most widely viewed public forums—quarterly earnings calls—Benioff has spoken expansively and passionately on a wide range of issues during Salesforce’s past two earnings calls, but he rarely mentions “customer experience” and to the best of my knowledge does not use the term “CX.”

In fact, on Salesforce’s fiscal-Q2 earnings call in late August, never mentioned the term “customer experience,” even in passing. He spoke extensively during that call and offered some brilliant reflections on his own leadership and on Salesforce’s willing to change itself radically to fit the new post-pandemic world, and you can see several highlights from that in my analysis called The Magic of Marc Benioff: 10 Key Drivers behind Salesforce Q2 Surge. 

The only mention of “customer experience” during the lengthy call from any Salesforce exec were these remarks from president Bret Taylor in response to a question about the business impact of Salesforce’s Commerce Cloud.

Salesforce’s differentiated value proposition

“When I look at our Commerce Cloud and our differentiated value proposition, two things come to mind,” Taylor said. “One is we do both B2C commerce and B2B commerce. These days when I talk to customers, it’s really about all of their channels: it’s the direct-to-consumer channels, it’s their warehousing, it’s their partnerships.

“And we’re really the one platform that can do both.

“The second thing,” Taylor continued, “is the integration of our Commerce Cloud with the rest of Customer 360. I think everyone on this call has experienced ‘buy online, curbside pickup,’ right? We’ve probably all experienced that, many of us for the first time. When you think about the technology that facilitates that, that’s the integration of our Commerce Cloud, our order-management solution, our Service Cloud, and really that end-to-end customer experience.”

Taylor then made a point about e-commerce that, to me, indicates that the broad solutions offered by SAP and by Salesforce are not all that far apart—except for the CX versus CRM terminology.

Commerce Cloud ‘part of a broad solution’

“But I also want to be clear that our Commerce Cloud is really a part of a broad solution that we’re providing to customers to really digitize their commerce experience, all the way from making that order through the end of that customer experience, whether you’re picking it up on the curb or it’s being delivered to your doorstep,” Taylor said. 

“And those transformations have never been more important in this all-digital work-from-anywhere world.”

Final thoughts

On the straight matter of CX versus CRM, I would argue that these two world-class companies are offering broad sets of solutions that have a great deal in common. At the same time, on the all-important commerce side, bear in mind that IDC recently declared SAP the clear leader as laid out in my recent piece called SAP Thumps Salesforce, Oracle, Adobe in B2B Digital Commerce: IDC.

So as I try to net out a final score on this one, I have to give SAP a sizable advantage in being able to interconnect, via its ERP solutions, not only customer-facing functions but also product design, procurement, manufacturing, supply chain, logistics, finance and more. Those end-to-end interconnections with a common data model across all parts of a company will be indispensable in the digital economy.

And at the same time, Salesforce has created enormous advantages for itself with its category creation and its longtime category leadership, its massive base of committed and often-fanatical customers, and its steep growth trajectory.

Both companies will certainly do well—but the biggest winner of all will be the customers who have the luxury of pitting two great competitors against each other.

Disclosure: at the time of this writing, SAP was among the many clients of Cloud Wars Media LLC and/or Evans Strategic Communications LLC.

 

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