West Coast’s Salesforce.com makes its mark in Boston
Four years ago, Salesforce.com wasn’t on the map in Boston.
West Coast tech giants like Google, Microsoft, Amazon, and Apple had set up local offices and begun “hirin’ and acquirin’.”
But Salesforce, the San Francisco maker of cloud-based business software, had a barely discernable presence. About 150 employees worked from home, or from a shared office in Newton.
Things changed on May 2, 2013. That’s when Salesforce extended a job offer to a Boston tech executive, Keith Block, to become its president and vice chairman.
The salary: $1 million, plus a hefty stock option package and 200 hours a year of private jet travel. Block signed on with Salesforce after spending 26 years at Oracle Corp., another California software giant.
By the fall of 2013, I was investigating rumors that Salesforce was finally going to open up a real office in the Back Bay — which it did, the following year.
“We said, ‘We’re making a huge commitment to this area, and we’re going to get a really cool space,’ ” Block says. “We started to grow, grow, grow.”
Today, Salesforce has about 1,000 employees in Boston — the result not just of accelerated hiring, but of two acquisitions, one a small startup, and one a public company called Demandware.
“We think we can have thousands of people,” Block told me in May. “Ultimately, we’d like this to be one of the biggest offices that we have in the country, and one of Boston’s biggest employers.”
Already, Salesforce stands apart from the other big tech companies that have Boston outposts in one important regard: There are a group of senior decision-makers who actually live here, rather than parachute in for short visits.
Block is the most senior, reporting to Salesforce CEO Marc Benioff. But there’s also Bruce Richardson, chief enterprise strategist; chief digital evangelist Vala Afshar; chief value officer Robert DeSisto; John Durocher, an executive vice president; and Jeff Barnett, CEO of Demandware (which has been rechristened the Salesforce Commerce Cloud).
“I don’t think there’s any line of business that’s missing a major influencer in the Boston area,” says Afshar, who helps promote Salesforce products at conferences and on social media. “Whether you are talking about R&D, marketing, sales, thought leadership — there are lots of skills here in Boston.”
If you aren’t a Salesforce customer, a quick primer: Founded in 1999, it’s one of the companies that popularized the idea that all sorts of business would “rent” software rather than buy it, paying a monthly or annual fee for applications that run on Salesforce’s servers, rather than on a customer’s equipment.
The company’s name refers to its original software offering, which helped sales people keep track of prospective customers at all stages of the sales process. But the company has since expanded into many other niches, from customer service to business analytics to operating e-commerce sites — the reason it paid $2.8 billion to buy Demandware last year.
Barnett, the CEO of that business, says that Salesforce doesn’t try to force-fit the companies it acquires into some kind of standard corporate mold.
“There’s a real appreciation from Marc Benioff and the leadership that as you acquire these companies, you need each of these companies to maintain their excellence and essence that allowed them to become a leader in the first place. That’s different from the old days, where you integrated the company, and all the talent that built it was kind of scattered to the four winds. It would lose its essence, and the acquisition didn’t deliver value.”
The Demandware purchase gave Salesforce a second local office, in Burlington. A third, in Cambridge, came last September, when the company bought HeyWire for an undisclosed amount. HeyWire had specialized in using text messaging for customer service interactions — a feature that is now part of what Salesforce calls the Service Cloud.
But in addition to the products made by HeyWire and Demandware, much of what Salesforce does in Boston is sell its products to corporate customers, and provide consulting services to get them up to speed in using it. Block, the vice chairman, is bullish on doing even more of that.
“There’s a lot of opportunity in Boston, especially when you think about financial services, higher education, biotech, and pharma,” Block says. “And this is an innovation hub, with all the universities here. We think it’s an untapped market with lots of potential.”
Since he joined the company in 2013, Block has kept a rather low profile locally. (In addition to Boston, he has a home in San Francisco.) But in May, Salesforce hosted an event at the Hynes Veterans Convention Center for several thousand customers, and Block was the emcee, talking about the company’s newest products and the $8.4 billion in revenue it raked in for the most recent fiscal year.
He also hired local favorites the Dropkick Murphys to open the conference. As a nod to Block’s ascension to the top ranks of Salesforce, they covered the song “Career Opportunities,” originally by the Clash, one of his favorite bands.
In San Francisco, Salesforce will soon move into a 61-story tower bearing the company’s name that is now the city’s tallest structure.
Could Block imagine Salesforce one day having its own building here in Boston? When I put the question to him, he didn’t rule it out. “You never know,” he said. “[The late mayor Thomas M.] Menino wouldn’t have let it happen. But [Mayor] Marty [Walsh] might let it happen. We’d have to go down to the Seaport. You never know.” Afshar says that the Back Bay office is already bursting at the seams, and the company may need additional space soon.
Aside from real estate, two other dimensions to watch: Will Salesforce buy more local companies, and how will competition play out with HubSpot, a Cambridge maker of marketing and sales software?
In 2011, before HubSpot went public, Salesforce made an investment in the company. Since then, HubSpot has launched more offerings that directly compete with Salesforce, and Salesforce has acquired a HubSpot competitor, ExactTarget, for $2.5 billion. Now, there are scads of blog posts that compare Salesforce’s and HubSpot’s products head-to-head. Block says, “It’s a little bit of competition. Sometimes they’re your partner, and sometimes you may see them in the marketplace.”