$50 Million Man

September 7, 2011 at 2:49 pm Leave a comment

by Diane Krakora, CEO

If you had $50 million to invest, what would you do with it? Buy a company? Spend it on product research? Create your dream campus and throw a party for the employees? I’d bolster my partner ecosystem – and surprisingly, so would Salesforce.com. They are investing $50 million to help consulting partners grow.

At last week’s Dreamforce event, Sherrick Murdoff was introduced as the 50 million dollar man.  As VP of Partner Investment, he will dramatically scale the partner ecosystem to drive explosive social enterprise growth in their top 8 countries by investing in partners who demonstrate quality, velocity, innovation, and agility.  Salesforce.com has seen massive growth over the past year:

  • 38%  YoY increase in revenues
  • 36% YoY increasing number of salesforce.com partners
  • $2.1B annual run rate

And to accelerate that growth, Salesforce.com needs a thriving and fast growing partner ecosystem to ensure the life-long success of their customers. Salesforce.com cannot keep up with the demand for services and has limited the investment in their own professional services, restructuring much of the team that competed against partners into Services Engagement Managers – helping consulting partners design effective work scopes and close deals. So, to help partners grow as rapidly as possible to meet the burgeoning demand, Salesforce.com is spending up to $50 million in capital investment into select consulting partners. I’m not sure that’s enough. If they’re a $2B company and their growing 38% year over year – that’s $700,000,000 in revenue growth next year, with a 2:1 services ratio – that’s $1.4 in additional services for next year. $50 million looks like a drop in the bucket.

They are looking for partners that are committed to the cloud (service, data, custom) in the UK, Germany, France, Australia, and Benelux with a financial services and/or media/communications focus. If you’re interested in grabbing some of Sherrick’s cash your company should produce more than $4m in SFDC revenues, be a consulting services firm with the majority of your revenues from Salesforce.com services, and have a management team with a vision and conviction in cloud computing, the experience and desire to rapidly grow your firm.

We don’t know how much Sherrick is willing to give each consulting partner to grow – we assume it’s more than $200,000 (since these are $4 million+ organizations) and less than $2 million per company, as the investment is an equity stake in the company. That’s right – Salesforce.com wants to own a piece of you. – and they want to sit on your board (in a non-voting role). You need to be a C-corporation to be able to issue stock and Salesforce.com requires a co-investor to lead the investment round. They don’t want to be the only one to give you money. Those are some fairly tough requirements for a small, rapidly growing services based company to swallow. If they’re in the SaaS (or cloud) services market, and they’re commitment to growth, would they give up an equity stake to Salesforce.com to get $1m to hire and certify services architects? Would you?

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Entry filed under: Live from Events. Tags: , , , , , , , , , .

Gone are the Days of the Generalist Partner – Even in the Cloud ISVs Still the Strategic Channel Segment at Salesforce.com

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