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CRM news: Salesforce gets a black eye with outage; buys Demandware

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In recent CRM news, cloud-based CRM provider Salesforce suffered an outage, but also made a deal with Amazon and purchased Demandware. And after years of independence, Marketo got purchased.

CRM news has been brewing lately. As the CRM software and marketing automation markets continue to morph and change, acquisitions have been defining the marketplace of late. Over the past several weeks, Salesforce, a cloud-based CRM provider, and Marketo, an independent marketing automation software vendor, have undergone major acquisition news and Salesforce suffered a data loss.

First, in early May, Salesforce experienced an outage. The outage resulted from the NA14 database, one of 45 database instances in the U.S., which had been moved several hours prior. While a small number of customers were affected, customers' lost data was unavailable for several hours.

These kinds of outages are costly and erode trust among customers. They undermine trust not only in the provider, but also in the proposition of the cloud. Brent Leary, a principal at CRM Essentials, says that Salesforce is capable of reinstating that trust.

"In a lot of instances, you would see way more outages when companies have their own servers. There is no system that is up 100% of the time. Still, it's important for Salesforce to show their customer base they take this kind of thing seriously," Leary says.

That may be a reason for another piece of Salesforce news. Salesforce also recently announced a partnership with Amazon Web Services that allows Salesforce to have server instances in 12 different international locations. Salesforce is also putting some of its new, high-volume data offerings on Amazon, including IoT Cloud.

These kinds of outages are costly and erode trust among customers.

"It will be interesting to see how Salesforce approaches infrastructure in the future," Leary says. "From a Salesforce perspective, it allows them to position themselves in international markets." But it's about having "more access, more coverage and deeper relationships."

Salesforce also purchased Demandware, an e-commerce platform, for $2.8 billion. Leary says that Salesforce is trying to compete with companies like Oracle and SAP to plug in a digital commerce component to the Sales Cloud and Marketing Cloud and to make the customer experience more seamless. "It helps them to do battle for the enterprise," Leary says, "and fill out the customer experience, the customer journey."

Vista Equity Partners, a private equity firm, also purchased Marketo for $1.8 billion in late May. Leary notes that major vendors like Oracle and Salesforce have been snapping up the leading marketing automation software providers for years, but it's unclear where this buyout will lead.

"You were thinking, 'Did Marketo miss their window [to be purchased]?'" Leary says. "But quite honestly, I don't know what's going to happen."

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