It is bringing more operational discipline to the IT side of the CRM giant
One of the The most challenging aspects of buying a successful company, especially when you’re paying billions, is finding ways to successfully integrate it with yours. Merging products and operations without crushing what made the acquired company successful in the first place requires finesse, and it’s not an easy balancing act.
In recent years, Salesforce has made several mega-buys. In fairly quick succession, the company paid $6.5 billion for Mulesoft in 2018, dished out $15.7 billion for Tableau in 2019, and then $27.7 billion for Slack in 2021. Indeed, the rate at which Salesforce bought other companies was something activist investors previously complained about. this year, which led to the dissolution of your mergers and acquisitions committee in March.
Sure, these companies helped Salesforce grow revenue, but critics suggested the CRM giant wasn’t integrating acquisitions into its broader organization. While there was some crossover with the core Salesforce platform, the merge of acquired companies with Salesforce overall has felt surprisingly sluggish.
One of CIO Juan Pérez’s first mandates was to improve the mix of these acquired companies, he said. “From the day I started, one of the number one goals I was given as a new CIO was that the organization wanted to improve our overall M&A integration process, both from a business process standpoint and from a business process standpoint. from the point of view of technological integration. point of view.”
It’s normal for mature companies like Mulesoft, Tableau and Slack to want to continue operating as they always have, doing what made them successful, said Perez, who was hired last year after more than 30 years at UPS.
“These organizations have their own culture, they have their own approach to doing things, they have their own infrastructure to support their business. And there is this natural tendency to want to stay in your lane and not integrate with the [parent] company,” he said.
That is expected to some extent. Speaking at Dreamforce in 2016, the company’s then-President, Vice President, and COO Keith Block spoke about the challenges a company like Salesforce faces when buying a company, and that was long before Salesforce began looking for sales targets. much higher prices.
“If you drive growth and experimentation, you may not take advantage of the installed base. If you push too hard on integration, you get cost savings, but it can hurt innovation,” Block said at the time. That is as true today as it was then.