HFS Highlight: Salesforce sets up a OneOffice battle royal with ServiceNow with Return-to-Work offerings

Winston Churchill is often quoted as saying, “Never waste a good crisis”.  We can’t be sure whether Salesforce is a disciple of Churchill, but its strategic intent with Work.com bears all the hallmarks that can be associated with that concept.

Salesforce expands from HR managers to IT managers with Work.com

Back in June 2020, Salesforce resurrected the work.com branding initially aimed at HR Managers but retired in 2015. It was an opportunistic response to Covid-19 and comprised of apps aimed at contact tracing, emergency response management, and employee wellness assessment. As we are nearing the tail end of the pandemic, Salesforce is turning that opportunistic approach into a strategic assault on ServiceNow by offering solutions aimed at IT Service and Operations Management.

The real battleground is experience-led return to work projects and, ultimately, IT Operations. But make no mistake, Salesforce is aiming at ServiceNow’s core business

One could argue that Employee Concierge and IT Service Center offerings’ launch is just opportunistic in trying to tap into adjacent market segments. It is equally easy to suggest that these offerings are just upselling opportunities within the Salesforce installed base, perhaps a cross-over into mid-market and SME customers looking for price-sensitive and experience-led alternatives to managing their employee and IT support. But in our view, the strategic intent goes much deeper.

The Slack acquisition takes Salesforce into the heart of OneOffice

We believe this should be considered in the context of the acquisition of Slack, which provides the glue to put the parts of the OneOffice together. Slack’s tools enable collaboration across siloed organizations and even broader ecosystems. As such, it is strongly aligned with HFS’s OneOffice vision (Exhibit 1).

Exhibit 1: The HFS OneOffice vision for organizations – digital transformation in action

Source: HFS Research 2021

“OneOffice” describes the HFS vision for business operations amidst the impact of cloud, automation, AI, and disruptive digital business models.  It is the  virtual workforce’s foundation, where automation tools augment the employee’s digital capabilities and the workplace becomes a “plug-and-play,” work-from-anywhere scenario. Thus, Slack can provide a new system of engagement for every customer and partner interaction. It will become the new interface for Salesforce Customer 360,  allowing organizations to connect Salesforce applications and build a single view of their customers. Not only that, but Slack will help Salesforce to tap into the developer community.

Salesforce lasers in on return-to-work offerings

Let’s shift gears and double-click on the new offerings. The Employee Workspace, Employee Concierge, and IT Service Center offerings all work together. They are aimed at strong demand for return-to-work projects, where organizations are looking for experience-led, cloud-based solutions that can provide flexibility as they have to manage huge spikes of requests. Talking to the plethora of ServiceNow partners while we research our upcoming ServiceNow Service Top 10, there is strong demand for these kinds of offerings and ServiceNow is in the pole position to maximize its quasi monopoly. It is here where Employee Concierge cuts in. The features include:

• Service Management ticketing
• Multi-Language Knowledge Management
• Automated Routing & Classification
• Cross-Departmental Service Desk

These features call out why it is an assault on ServiceNow. What customers love about ServiceNow is its holistic data model and the ability to drive cross-functional workflows. It is all about operationalizing the OneOffice.

The partnership with Tanium is just the opening gambit for Salesforce’s IT Operations ambitions

Before some folks get too excited, Salesforce is just dipping its toe into the big ocean of IT Operations Management. It is expanding its partnership with Tanium, which is more known for security and endpoint protection but is gunning for taking a bite of the huge ITSM market. And Salesforce is putting its money where its mouth is as its venture capital arm has invested about $100m in Tanium. Put another way, Tanium is not yet the finished article on ITSM. But the partnership will allow Salesforce to gain experience in selling into new, largely untapped buying centers.

Yet, its partner channel needs retraining to support Sales IT Operations ambitions

Not only does Salesforce’s Salesforce (pun intended) need retraining to engage with new buying centers, its partner channel needs to be retrained, too. While global system integrators have the skills to engage with those buyers, the vast majority of the Salesforce partner channel has no or at best a moderate experience in dealing with IT-centric requirements. Slack could be the conduit for the training efforts as Salesforce is lacks the in-house expertise.

Bottom-line: Salesforce is building out the next major building blocks to offer an ecosystem for the future of work

Salesforce foray into ITSM won’t change the market dynamics overnight. Yet, it needs to be seen as a clear assault on ServiceNow and it is underlining its intent to gain traction with IT-centric buying centers. But the moves make also abundantly clear that the acquisition of Slack takes Salesforce beyond the landgrab on digital collaboration. Its goal is to become relevant to IT executives. Thus aiming to become the cornerstone for an ecosystem for the future of work.