Salesforce to invest $50M in startups and launch an incubator to foster an ecosystem of apps that run on its cloud-computing platform
Move intended to foster ecosystem of applications that run on its cloud-computing platform — SAN FRANCISCO, Calif.—Salesforce.com will devote …
Context & Ripple Effects
This move is the capital leg of a developer strategy Salesforce has been assembling for a year: it launched App Cloud to consolidate its developer resources in September 2015, then earmarked a $100M fund for European cloud startups that October. The new $50M vehicle and incubator extend that pattern from tooling and geography to direct seeding of startups whose products live on Salesforce's platform.
It also lands weeks after Salesforce disclosed plans to spend $400M on Amazon Web Services over four years, meaning apps incubated here will largely run on infrastructure Salesforce itself is renting — the company is paying twice to deepen the same ecosystem, once in equity and once in compute.
First-order effects
- Startups accepted into the incubator get capital plus a home on App Cloud, tying their product roadmaps to Salesforce's APIs and data model from day one.
Second-order effects
- Every funded app adds gravity to the platform, making the AWS commitment more valuable per dollar and raising switching costs for customers who adopt multiple incubated apps alongside core CRM.
Third-order effects
- If the pattern holds — App Cloud in 2015, two regional startup funds by 2016 — corporate venture capital becomes Salesforce's standard mechanism for manufacturing demand on its own platform, a template visible again years later in the AI Incubator Hub inside its $15B San Francisco plan.
The trend: Enterprise software vendors are shifting from selling applications to subsidizing ecosystems around their platforms, using venture funds and incubators to seed the app supply their clouds depend on.