Salesforce’s Message to Europe

Salesforce last week said it would invest US$100 million in emerging sales force partners in Europe. The company previously announced a similar program for the Americas, and it hopes to discover valuable new companies and business solutions.

Paul Greenberg and the team atCRM Idol (of which I have been a part) have been doing the same thing — trying to discover interesting emerging companies in the CRM space for several years now, minus the money.

Even without millions of bucks at stake, the casting call always brings in some cool ideas from around the world, so I have no doubt there are plenty of companies in Europe that will vie for a chance at an investment.

Beyond CRM

This is just one more example of how Salesforce is growing beyond the original CRM space. The company is looking for emerging vendors that will do amazing things with its Salesforce1 platform, bringing cloud computing into new markets.

That’s the way Salesforce will continue to grow — by selling generic seats of its service configured for specific markets by partners. Of course, that won’t slow the company’s own efforts at penetrating vertical markets, but it adds a new dimension.

Salesforce needs to stay close to emerging companies right now to best understand where innovations are coming from. As a multibillion-dollar enterprise, it might become a captive of its own success, making it necessary to find another way to stay close to the grass roots. With a $7 billion run rate, it needs big new deals to keep the growth engine humming, and that means developing new partners and whole markets.

This happens to every successful business, but often the company in question either doesn’t see itself being hemmed in by its own success or chooses to ignore it.

Microsoft is a case in point. It was tremendously innovative until it couldn’t embrace cloud computing for fear of upsetting the Windows franchise. Consequently, it went on to miss big new markets like the smartphone and today has a small share of that market.

As that company is becoming aware, it’s hard to get back on the curve once you fall off. I wouldn’t rule out Microsoft because it has a lot of cash and a determined CEO who is trying to turn things around, but still.

Obstacles in Europe

Salesforce is telling Europe that its innovations in tech are just as important and potentially valuable as those from America. The big question now is, will the Europeans take up the challenge? I’m sure there will be contenders for all that money, but my question is whether there will be any blockbuster apps. The history of the tech paradigm hasn’t favored Europe, after all.

Europe didn’t compete in CPUs, storage or really anything, preferring to take what the U.S. innovators offered up. Back in the day, I remember that the Russians directly copied the Digital PDP-11 CPU set, including some errors that made things go sideways once in a while.

I know some really smart people in Europe who understand cloud computing, social networking and all the rest, but they tend to work for big companies or governments. The idea of starting a company has many challenges, and the European nanny state political structure doesn’t make entrepreneurship easy.

At the same time, some of the most interesting innovations in our space leverage data, especially personal data, in ways that some Europeans find objectionable. That conservatism about personal data handling loosens up in younger demographics, according to some studies I’ve seen from Pew Research and McKinsey, so I guess we’ll need to wait and see.

1,000 Years of Innovation

Eleven years ago, Charles Murray published Human Accomplishment: The Pursuit of Excellence in the Arts and Sciences, 800 B.C. To 1950. It was a good read and not nearly as nerdy as it sounds.

The book revealed a huge number of innovations and innovators in all subjects that came out of mostly northern Europe over more than 1,000 years, but the continent hasn’t had a lot to crow about in tech.

Maybe Salesforce is playing a hunch. Maybe it knows that the onus is on European entrepreneurs to pitch some good ideas.

Will it play out as A Tale of Two Cities or Waiting for Godot?