Salesforce Buys Big Data Startup RelateIQ For Up To $390M
The motto at Salesforce.com seems to be if you can't beat them, buy them. This time the exact target of Salesforce.com's $390 million desires is the scrappy startup RelateIQ, which uses searches of unstructured data from email …
Context & Ripple Effects
RelateIQ is the latest entry in a decade-long Salesforce.com shopping spree: Heroku for roughly $212 million in 2010, Buddy Media for $689 million in cash and shares completed in 2012, each bolted onto the platform strategy crystallized by the Salesforce1 developer platform launch in late 2013.
What distinguishes this deal is the target's approach: rather than another marketing or app-layer asset, RelateIQ mines unstructured data from email and communications to construct relationship records on its own — a direct challenge to the manually maintained database at the heart of traditional CRM. The pickup was unusually broad, with confirmation landing same-day across RelateIQ's own blog, Re/code, Forbes, The Register, CITEworld, VatorNews and Thomson IR, signaling how closely the analyst community watches Salesforce's M&A cadence.
First-order effects
- RelateIQ's technology and team fold into Salesforce, giving its CRM product an engine that infers contact and deal data from customers' own email traffic instead of waiting on sales reps to key it in.
Second-order effects
- Rival CRM vendors — Oracle, SAP, Microsoft Dynamics — now face pressure to match inferred-data features with their own machine-learning acquisitions, since a competitor's CRM that fills itself in resets buyer expectations for what a sales tool should do.
Third-order effects
- If the pattern holds, CRM consolidates around platforms that treat unstructured communications data as the primary source of record, making data-science talent and email-scale processing the scarce assets that drive further M&A among the big SaaS players.
The trend: Enterprise SaaS incumbents are buying data-mining startups to shift CRM from manually entered records toward systems that infer customer relationships automatically.