SAP Concedes Defeat To Salesforce By Exiting Mainstream CRM

German multinational software corporation SAP is conceding the broad mainstream customer relationship management market to CRM giant Salesforce. The company has now decided to pursue only specific segments just two years after former CEO Bill McDermott vowed that SAP would surprise the CRM market by storm. SAP spent $8 billion on the subscription software platform Qualtrics to take on players like Salesforce, AWS, and Google Cloud.

It is interesting to note here that Marc Benioff, the CEO of Salesforce, and his company have never faltered ever since McDermott issued his blunt challenge to Salesforce. In fact, Salesforce went on a rampage and acquired first MuleSoft and then Tableau to expand its data-analytics and integration capabilities along with the very size and boundaries of CRM itself.

During the August 25 earnings call, Benioff went on to say that a lot of competitors of Salesforce are everywhere and not just in CRM but Salesforce is singularly focused. “Focus” is always a plus point, and it is literally essentially in turbulent times.

Salesforce recently announced its Q2 numbers and now has a market cap of $194.7 billion that is significantly bigger than the cap of Oracle at $172.1 billion and almost touches $197.2 billion cap of SAP. Interestingly, the platform services of Salesforce are almost inextricably and all intimately tied to its cloud applications. It is no surprise that Salesforce has done more than any company in the world to convince CEOs and other decision marketers that it is safe to move mission-critical apps to the cloud.

According to an IDC report, the share of Salesforce in the 2019 CRM revenue market was bigger than that of Microsoft,Oracle, SAP, and Adobe combined. 

The CRM giant claimed a whopping share of 18.4 percent while the other four companies generated a combined portion totaling 17.8 percent.

There is no doubt that Salesforce can take this as a huge win, but it is also a partial win for SAP as it has some amazing opportunities ahead of it outside the realm of CRM. For instance, SAP is the world #1in Experience Management with Qualtrics and it can now further exemplify and magnify its growth opportunities. Furthermore, SAP is likely to invest in the eCommerce category via Hybris that is unarguably a very strong cloud fit and in huge demand. 

All in all, SAP has demonstrated to its investors and the marketplace that it will focus on its resources, attention, and energies elsewhere instead of taking Salesforce head-on.