Salesforce's Wave seeks to sweep aside the analytics competition

On the first day of Salesforce's Dreamforce event, the company did as expected and unveiled Wave, the Salesforce Analytics Cloud.

Wave is an ambitious attempt by Salesforce to break into a market with great potential for expansion, but a high degree of competition -- and steadfast commitment to existing products.

Wave allows users to pull together data from multiple business aspects and explore the results through quick searches and dynamic visualizations to make business decisions. Those visualizations are optimized for mobile devices, allowing on-the-spot, interactive exploration by regular business users rather than static stand-alone reports generated by analysts.

Salesforce hinted at its plans last year, when it acquired BI and analytics software maker EdgeSpring, creators of "a powerful data store" and "a dynamic visualization engine" -- two descriptors ideally suited to Wave.

Salesforce.com

Washing aside the competition

In an email, IDC analyst Al Hilwa noted that Wave constitutes "one of the biggest functionality additions to come to the [Salesforce] platform in some time," even apart from Wave's vaunted ease of use. "Salesforce has needed a stronger analytics capability for years, and last year they were criticized for not announcing that much in this area."

VentureBeat pointed out Salesforce is teaming up with multiple outfits to further equip Wave with predictive analytics, rather than bake in its own such tools -- a sign that Salesforce "doesn't want to completely turn off its ecosystem of companies that offer to crunch data from Salesforce."

Martha Bennett, principal business intelligence analyst for Forrester, remarked that Wave presents a challenge to existing cloud analytics companies that have worked hard to add Salesforce integration. Those companies, she stated in an email, "will need to work even harder to provide truly differentiating capabilities, as the core functions will increasingly be available from [Salesforce] itself. Even when pricing is taken into consideration, companies may prefer to deal with just a single provider, all else being equal."

Salesforce's previous forays into analytics, mainly with its CRM products, have drawn criticism for being underpowered and initially only available as a cost-plus add-on, rather than a standard part of the platform. The company pulled an about-face on the gaffe, but Wave isn't being offered as a standard component of any package. Rather, it's only available (for now) in a per-user licensing system: $250 per month for those who build data, and $125 per month for those who want to examine it. It's likely that Salesforce wants to test the waters with Wave first and see if demand for the application in turn generates demand for Salesforce generally.

The wave of the future?

Wave is part of Salesforce's ongoing effort to keep itself relevant and timely. The company has strengthened its ties with rivals -- Microsoft, Oracle -- while continuing to compete with them in different ways. For example, Salesforce Identity is an alternative to Microsoft Azure's Active Directory functionality. (It hasn't let up on its battering of rival SAP, though.) Salesforce even added its name to the list of industry bigwigs contributing to OpenStack, though that may be more for the sake of its own internal infrastructure than to offer any OpenStack-related prodcuts to its customers in the long term.

Rather than spreading itself thin by targeting a base of broad but potentially indifferent customers, Salesforce has focused on industry verticals as a potential spur to growth. That said, InfoWorld's David Linthicum wasn't convinced the effort would yield fruit for Salesforce, given how verticals tend to have entrenched SaaS providers.

Bennett believes Wave is likely to appeal directly to "existing SFDC customers who haven't already invested in analytics capabilities that are closely integrated into SFDC," thanks to its out-of-the-box integration. But she also felt the product was "somewhat limited at this stage," given that "this first release is iOS only and not available outside of the U.S."

A year from now, the picture could be very different, according to Forrester. A draft of an analysis of Wave produced by Bennett and several other analysts, to be released to Forrester clients on Tuesday, is subtitled "There Just Might Be Another 800lb Gorilla In The Business Intelligence Market In A Year." Many of Wave's key features, like its use of a NoSQL key-value store and the RESTful OData protocol, caught their eyes, along with the way it brings together normally separated operational and analytical data.

What's less clear is the profitability Wave can bring to Salesforce or if that's the idea at all. Company CEO Marc Benioff has said growth, not profitability, is his main concern for Salesforce. While Salesforce's stock has posted steady gains since 2009, the company's also consistently operated at a loss for almost three straight years.

On the other hand, there seems to be no shortage of demand for Salesforce expertise: As of October 2014, Indeed.com's trends show job listings involving Salesforce going up -- at nearly twice the current rate of demand for competitors like SAP CRM or Microsoft Dynamics.