By Rick Huckstep

Salesforce.com has become the de facto standard for customer relationship management systems (aka CRM). In a technology market that has experienced a seismic shift towards software as a service running in/on the cloud, Salesforce first defined this move and now dominates it.

According to Gartner’s 2014 report on the global CRM market, this is now a $20bn a year market and Salesforce are the market leaders with over 18% share. From 2012-2013, Salesforce grew nearly 25% faster than it’s nearest rival and with their double-digit growth rates, Salesforce is set to further increase market share.

However, here’s the thing!

Salesforce is a platform, a pretty good one at that, but still a platform, nonetheless. And businesses don’t typically spend money on a platform for platform’s sake. What businesses spend money on is the business value they get from using the platform, however that is measured.

In other words, businesses spend money on applications.

This week I ventured up the extremely speedy and disconcerting lifts of the new Leadenhall Building to meet with the London based team of Vlocity. Barely 18 months old, Vlocity are building vertical applications in 4 industry sectors on the highly configurable, highly scalable Salesforce platform.

And the reason I went to see them is because 2 of these industries are Insurance and Health Insurance.

Dominic Dinardo heads up the European arm of Vlocity and Amanda Rees runs the sales consulting team for the Insurance vertical. I’ve known Amanda from our time working together selling insurance software at CSC and it was good to see the team settling into their new offices.

As we got started, Dom explained the background to Vlocity and the rich ancestry behind the business (more on that later), Then, we moved onto the insurance business and Dom showed me the “not for public consumption” blueprints for the Insurance vertical.

“The blueprints show 3 levels of detail”, Dom explained. “First, it shows functionality that is out of the box, vanilla Salesforce. Then it shows where additional functionality has been built on the platform. Finally, all these big blue boxes show the Insurance functionality that Vlocity has built.”
The thing that surprised me the most was how narrow my preconceptions were of the Salesforce platform. My own experience is that of a user of Salesforce when I ran sales teams. Here I used Salesforce to manage customer details, sales campaigns, pipelines, reporting and forecasting.

Yet here I was, up on the 30^th floor with magnificent views across London, looking at a blueprint for an insurance business.
Over the next hour, Dom and Amanda explained how the success of the Salesforce platform had been built on highly scalable, secure, cloud technology. The very nature of this platform is that it enables elasticity for enterprises to be able do the things they cant do themselves.

Out of the box Salesforce produces a generic B2B data model. Vlocity then add on top of this a complete insurance business model. This enables them to offer all the benefits customers expect from Salesforce, such as scalability and regular system upgrades 3 times a year.

The Vlocity specific development includes a library of supporting insurance business processes which they call “omniscripts”. These configurable and reusable insurance processes are available for all users of the platform.

These omniscripts can also be customer facing. For example, when the end consumer logs on, the Vlocity script runs and personalizes the site, making background checks to determine the eligibility of products, pricing and ratings based on their individual profile.

And in taking this approach to productize standard industry processes, Vlocity is a system that is business driven and removes the IT department from the critical path.

It also enables a better customer experience because the whole platform is engineered around the customer, rather than the product (which is what you see in many traditional insurance systems). One of the tools they’ve built is used to visualize relationships for customers and all associated parties. It is this focus on the customer at the heart of the system that explains why Vlocity are focused on the broker, agent and intermediary insurance markets.

Vlocity are a relatively new business but despite their relative youth, their dynasty has a very impressive bloodline!The ancestry traces back nearly 30 years to the early days of Oracle when Craig Ramsey (who founded Vlocity) hired Marc Benioff (who founded Salesforce). Amongst this team were David Schmaier, Mark Armenante and Young Sohn, who all went on to work with former Oracle colleague Tom Siebel (who founded Siebel Systems). At the time the global CRM market was just $20million in size and Siebel established itself as the market leader before its acquisition by Oracle.

Marc Benioff left Oracle in 1999 to form Salesforce and become the daddy of cloud and software as a service. At the time, Salesforce was a disruptive play to enable enterprises to deploy CRM systems faster and cheaper.

At Salesforce, the focus was on building a highly scalable, broad and wide, horizontal platform to serve all industries. This was markedly different to the Siebel strategy of building vertical and industry specific applications. To compete with Siebel, Craig Ramsey, who has teamed up again with Marc Benioff on the Board at Salesforce, created “Verticals on Demand”. This was circa 2007 and the idea was just as it says on the tin…to build vertical applications to run on the horizontal platform.

Verticals on Demand evolved into Veeva and became the market leading CRM platform for the pharmaceuticals and life sciences industry. Their 2013 IPO was valued at $5bn.

In January 2014, the group came together again when David Schmaier and the 3 Veeva founders (Craig Ramsey, Mark Armenante and Young Sohn) founded Vlocity. With backing from Accenture and the founders, Vlocity has built a 130+ people business with offices across the globe. In the world of insurance, they are attracting a lot of attention as they combine the scale and flexibility of the Salesforce platform with their blueprint for an insurance business.