Indian Institute of Management, Indore

Sales And Distribution Management

Understanding the Sales and Distribution Management

of Salesforce

Prof. Aditya Billore

Group 6 (EFGH)
Name Roll Number

Aiben George 2019IPM014

Azeem 2020IPM040

Medhavi Bulkunde 2020IPM075

Vachan Premugh Dicruz 2020IPM144

Ripon Jyoti Patir 2022PGP314

 INDUSTRY ANALYSIS OF THE CLOUD-BASED SOFTWARE SERVICE
INDUSTRY

Salient Features

The evolution of technology has catalysed a profound shift in how businesses manage their
operations and serve their customers. Amidst this digital transformation, cloud-based
software services have emerged as a cornerstone of modern business strategies. Offering
unparalleled scalability, flexibility, and accessibility, cloud-based software has revolutionised
the way organisations approach everything from data management to customer relationship
management.

In the cloud-based software service industry, companies leverage remote servers hosted on
the internet to store, manage, and process data, providing users with on-demand access to a
wide array of applications and resources. This paradigm shift eliminates the need for costly
on-premises infrastructure, empowering businesses of all sizes to streamline their operations,
enhance collaboration, and drive innovation.

From enterprise resource planning (ERP) solutions to customer relationship management

(CRM) platforms, the cloud-based software service industry encompasses a diverse range of
offerings tailored to meet the unique needs of various sectors and functions.

The cloud-based software service industry, comprising Software as a Service (SaaS),

Platform as a Service (PaaS), and Infrastructure as a Service (IaaS), is revolutionising how
businesses operate in the digital age. SaaS delivers applications directly over the internet,
exemplified by platforms like Google Workspace, offering convenience and accessibility to
users worldwide. PaaS provides developers with platforms to build, deploy, and manage
applications, as seen with Heroku, streamlining the development process and accelerating
time-to-market. Meanwhile, IaaS offers virtualized resources, such as those provided by
AWS, enabling businesses to scale infrastructure on-demand without the burden of physical
hardware management.

The benefits of cloud-based software services are manifold, profoundly impacting businesses
across industries. By leveraging these services, organizations can streamline operations,
reduce costs, and enhance scalability. With cloud-based solutions, businesses can access
resources and applications globally, facilitating collaboration and efficiency regardless of
geographical boundaries. Moreover, cloud services prioritize security and compliance,
offering robust measures to safeguard data integrity and regulatory adherence. Additionally,
cloud-based solutions foster innovation by providing a flexible and dynamic environment for
experimentation and development.

The growth prospects for the cloud-based software service industry are exceptionally
promising. Projections indicate a significant expansion, with the market expected to reach
USD 619.01 billion by 2023 and forecasted to soar to USD 1,554.94 billion by 2030,
representing a remarkable compound annual growth rate (CAGR) of 14.1% from 2023 to
2030 (Source: Mordor Intelligence, Cloud Computing Market Size & Share Analysis -
Growth Trends & Forecasts). This trajectory underscores the increasing reliance of
businesses on cloud-based services to drive efficiency, innovation, and competitive advantage
in an increasingly digital landscape.

As businesses continue to embrace digital transformation, the demand for cloud-based

software services is poised for exponential growth. With advancements in technology driving
continuous innovation and the proliferation of internet-enabled devices enabling ubiquitous
connectivity, the cloud-based software service industry stands at the forefront of shaping the
future of business.

Industry trends

Cloud Computing is Ubiquitous.

Organizations of every scale are embracing cloud solutions to drive innovation and
competitive advantage. This adoption trend is underscored by the increasing prominence of
hybrid and multi-cloud strategies, as highlighted by Franklin (2023). These strategies, which
combine the strengths of different cloud platforms, are paving the way for novel distributed
cloud models, enabling organizations to optimize performance and resilience across diverse
environments.

Moreover, the advent of cutting-edge wireless communication technologies, such as 5G R16

and R17, is poised to catalyze the proliferation of cloud services even further. As noted by
Gartner (2021), these advancements are expected to significantly enhance the accessibility
and reliability of cloud-based solutions, empowering businesses to leverage cloud resources
with unprecedented speed and efficiency.

Regional cloud Ecosystems

The emergence of regional cloud ecosystems is propelled by various factors, including

stringent data protection regulations imposed by countries and the increasing demand from
businesses for greater control over data localization. For instance, entities such as banks and
government agencies often prioritize cloud services offered by domestic providers to mitigate
the risks associated with over-reliance on a single provider. However, in regions lacking
indigenous cloud platforms, reliance on external providers raises concerns regarding data
sovereignty and control.

Initiatives like GAIA-X in Europe are proactive steps aimed at addressing these
apprehensions by fostering the development of localized cloud solutions. By encouraging the
establishment of regional cloud options, such initiatives strive to enhance data governance,
promote compliance with regulatory frameworks, and bolster trust among stakeholders
(Gartner, 2021).

CIPS Providers’ Automated Programmable Infrastructure

The industry is transitioning towards embracing fully managed cloud services with
sophisticated AI and machine learning features provided by leading CIPS (Compute,
Infrastructure, and Platform as a Service) providers. This transition is expected to rapidly
diminish the necessity for traditional IT operational roles in overseeing public cloud
environments. The evolution of IT infrastructure towards greater programmability is driving
heightened automation in its operations. Whether deployed within traditional data centers or
accessed via public cloud services, modern IT infrastructure demands less manual
intervention and routine maintenance compared to legacy systems (Gartner, 2021).

Porters 5-Forces Analysis

1. Threat of New Entrants (Low to Moderate)

● Entry barriers exist due to infrastructure costs, network effects, and economies of
scale.
● Established players have a head start, making it challenging for newcomers.
 ● Cloud adoption continues to attract new entrants.

Major players, source:mordor intelligence

2. Bargaining Power of Buyers (Moderate to High)

● Buyers have choices among various cloud providers.

● Switching costs are relatively low, allowing customers to negotiate terms.
● Customer-centric features and pricing flexibility matter.

3. Bargaining Power of Suppliers (Moderate)

● Cloud infrastructure providers (e.g., AWS, Azure, Google Cloud) hold significant
power.
● Competition among these suppliers balances the equation.
● Suppliers' ability to differentiate services impacts their bargaining power.

4. Threat of Substitutes (Low):

● Cloud computing has become integral to modern business operations.

● Few viable substitutes exist for the scalability, flexibility, and cost-effectiveness of
cloud services.
● On-premises solutions are less competitive in most cases.

5. Rivalry Among Existing Competitors: (High)

● Intense competition characterizes the cloud industry.

● Major players (AWS, Microsoft, Google) vie for market share.
● Innovation, pricing, and service quality drive rivalry.
 Revenue Sources

Recurring Subscription Fees:

● Software as a Service (SaaS) providers primarily rely on recurring subscription fees.

● Customers pay regular scheduled fees to access cloud-based applications and services.
● This steady stream of revenue sustains ongoing operations and product enhancements.

Usage-Based Billing (Pay-as-You-Go):

● Many cloud services follow a pay-as-you-go model.

● Customers pay based on actual usage—compute resources, storage, data transfer, etc.
● This flexible billing approach aligns costs with usage patterns.

Consulting and Professional Services:

● Cloud providers offer consulting, implementation, and customization services.

● Enterprises seek assistance in migrating to the cloud, optimizing workflows, and
integrating solutions.
● These services generate additional revenue.

Marketplace and Ecosystem Fees:

● Cloud marketplaces host third-party applications and services.

● Providers charge fees for listing, transactions, and revenue sharing.
● Ecosystem growth benefits both providers and developers.

Premium Features and Add-Ons:

● Cloud platforms offer premium features beyond basic functionality.

● Customers pay extra for advanced capabilities, security enhancements, or specialized
modules.
● Upselling drives incremental revenue.

Data and Analytics Services:

● Cloud providers monetize data storage, analytics, and processing.

 ● Enterprises leverage cloud-based data warehouses, machine learning, and business
intelligence.
● Data-driven insights create value and generate revenue

Sales Process in the Industry

Finding Leads:

Objective: Identify individuals or businesses potentially interested in the product.

Tactics:

● Lead Generation: Generate interest through marketing efforts, inbound inquiries, or

referrals.
● Prospecting: Research and identify potential leads based on fit and relevance.

Connecting:

Objective: Establish a line of communication with leads to gauge their interest and
understand their needs.

Tactics:

● Outreach: Contact prospects via direct dials, email, or social media.

● Qualification: Assess whether the lead is a good fit for your solution.

Presenting the Product:

Objective: Showcase product’s value proposition.

Tactics:

● Product Demos: Conduct live demos or provide video walkthroughs.

● Tailored Presentations: Customize presentations based on the lead’s specific pain
points and requirements.

Overcoming Objections:
Objective: Address any concerns or objections raised by the lead.

Tactics:

● Active Listening: Understand the lead’s objections fully.

● Provide Solutions: Offer solutions or clarifications to alleviate concerns.

Closing the Deal:

Objective: Convert the lead into a paying customer.

Tactics:

● Negotiation: Discuss pricing, terms, and contract details.

● Trial Periods: Offer trial periods or pilot projects to build confidence.
● Contract Signing: Finalize the agreement.

Nurturing the New Customers:

Objective: Ensure customer satisfaction and retention.

Tactics:

Onboarding: Guide customers through setup and initial usage.

Ongoing Support: Provide exceptional customer support.

Upselling and Cross-Selling: Identify opportunities to expand the customer relationship

Salesforce India: A Comprehensive Look

1. A CRM Giant Focused on the Customer: Salesforce's Mission

When it comes to customer relationship management (CRM) software, Salesforce is a world

leader. Salesforce, which was founded with the goal of enabling companies to engage with
their clients in novel ways, provides a cloud-based platform that combines a number of
features that are essential for contemporary company operations. This focus is reflected in
their mission statement, which reads, "We bring companies and customers together."

2. Prioritizing the Customer: Salesforce's Method

Salesforce bases its strategy on the fundamental tenet that satisfied customers are the
foundation of a successful company. Their CRM system does more than just track leads and
contacts. With its comprehensive understanding of the customer experience, it enables
companies to anticipate demands, tailor interactions, and build better bonds with their
clients.Giving a holistic view of the costumers journey provides key insights for decision
making and salesforce with its capabilities is able to achieve this to the maximum.

3. Expanding Footprint of Salesforce in India

In India, Salesforce is widely present. They address the particular requirements of the Indian
market with a specialized website and regional offices. Their emphasis on cloud solutions is
in line with the nation's expanding technology industry, and they actively network with
companies of all kinds, from start-ups to well-established multinationals.

4. Revenue Sources: Advancing Salesforce's Development

The main source of income for Salesforce is subscriptions to their cloud-based CRM system.
Companies pay a monthly charge that varies according to the services they utilize and the
volume of people that visit the site. Salesforce also makes money by providing professional
services, in which they help businesses with CRM solution setup, customization, and
maintenance. Within their ecosystem, where independent developers sell apps that interact
with the main Salesforce platform, they could also make money from the sale of apps.
 Distribution Process in the Industry

Within the cloud-based software service industry, characterized predominantly by the

Software as a Service (SaaS) model, a distinct distribution process emerges, deviating from
conventional software distribution methods.

Elimination of Physical Distribution: Unlike traditional software delivered on physical media

like DVDs or CDs, cloud-based software leverages electronic delivery mechanisms. This can
take two primary forms:

Downloadable Software Clients: For specific services, a limited-size installation file might be
downloaded to the user's device. This client software then establishes a connection to the
cloud-based service to function fully.

Web-Based Access: A significant portion of SaaS applications function entirely within a web
browser. Users can access the software directly through any internet-connected device with a
web browser, eliminating the need for local installation.

Subscription-Based Access Model: SaaS providers typically eschew perpetual software

licenses. Instead, customers pay a subscription fee, often on a monthly or annual basis, to
gain access to the service. This subscription grants ongoing use of the software, along with
regular updates and maintenance delivered by the provider.

Self-Service Distribution: The cloud-based software industry heavily emphasizes self-service.

Users can typically sign up for free trials or paid subscriptions directly through the provider's
website. This eliminates the need for intermediaries or distributors traditionally involved in
software sales.

Marketplace Distribution: In some instances, cloud-based software services might also be

available through online marketplaces. These platforms aggregate various SaaS products,
allowing users to conveniently compare and purchase them in a centralized location.

Focus on Centralized Updates and Maintenance: By residing in the cloud, the software
updates and maintenance become the sole responsibility of the provider. This ensures users
consistently have access to the latest features and bug fixes, eliminating the need for manual
downloads and installations.

This cloud-based distribution model fosters advantages for both providers and users.
Providers benefit from reduced distribution costs, inherent scalability, and predictable
recurring revenue streams. Users enjoy simplified access, lower upfront costs, and the
convenience of automatic updates.

References

Cloud Computing Market Size & Share Analysis - Industry Research Report - Growth Trends.
(n.d.). Www.mordorintelligence.com.
https://www.mordorintelligence.com/industry-reports/cloud-computing-market

Franklin, B. (2023, January 27). 40 cloud computing stats and trends to know in 2023.
Google Cloud Blog.
https://cloud.google.com/blog/transform/top-cloud-computing-trends-facts-statistics-2023

Gartner. (2021, August 2). Gartner Says Four Trends Are Shaping the Future of Public
Cloud. Gartner.
https://www.gartner.com/en/newsroom/press-releases/2021-08-02-gartner-says-four-trends-a
re-shaping-the-future-of-public-cloud

fresent. (n.d.). Understanding The Saas Business Model: How Saas Companies Generate
Revenue. Fresent’s Blog. Retrieved March 31, 2024, from
https://blog.fresent.com/understanding-the-saas-business-model-how-saas-companies-genera
te-revenue/

What is SaaS Sales? The Future of Cloud-Based Software Solutions. (n.d.).

Www.graygroupintl.com. Retrieved March 31, 2024, from
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