IBM and Salesforce recently announced an expansion of their partnership, which introduced IBM Watson's artificial intelligence (AI) tools to Salesforce Quip's Live Apps collaborative document platform. It also brought together IBM Cloud and Watson services with Salesforce Service Cloud Einstein, to help companies more effectively connect and collaborate with their customers.
By anyone’s standards this was a powerful play.
But what’s really going on here? Penny Gillespie, Gartner Research VP for Digital Commerce said the “deepened” IBM-Salesforce partnership takes the initial partnership, first announced in 2017, to the next phase. And the next phase is all about data: the new integrations aim to bring additional insights to the two company's respective customers by incorporating CRM data into non-CRM related productivity tools through the two organization's mutual cloud products.
A Marriage of IBM and Salesforce Data
Gillespie said the original IBM-Salesforce partnership — the fourth partnership of its kind for San Francisco-based Salesforce — was a marriage of data and analytical capabilities. The goal was to better connect the front and back office applications of an organization to produce more meaningful results.
- Data marriage: Salesforce's strength is in customer data, whereas Armonk, New York-based IBM has traditionally been more about the back office, especially in certain verticals, such as financial services. The data marriage combines Salesforce customer data and IBM's vertical/industry data with other unstructured traditional back office data.
- Analytics marriage: The analytics marriage is predominately Watson’s ability to process unstructured data inside (e.g., vertical or industry specific) or outside (e.g., weather) an organization coupled with Salesforce’s predictive insights from the customer data. Through this, customers of both companies benefit by:
- Einstein, Salesforce’s AI for CRM, can now incorporate data typically external to a CRM to support Salesforce clients make better decisions when dealing with customers and prospects.
- Watson, IBM's supercomputer, becomes more customer-centric by bringing traditionally back office insights into customer facing apps. This should help IBM gain better insight into its own customers over time.
- Salesforce gets a tighter integration between software application data and cloud data.
The Watson-Quip integration, according to Gillespie, builds on the original promise. As a result of the integration, new data points from IBM Watson will bring additional insights to Quip customers, while Quip will be expanded to IBM via new IBM Watson Quip Live Apps, likely both on the IBM Services Cloud as well as embedded in the Salesforce Quip solution, which will bring additional insights to IBM customers.
“It feels like a continuation of a larger strategy for both companies to attempt to maximize the value of data, analytics and AI for their customers by combining forces to optimize their respective strengths — holder and analyzer of customer data for smaller-sized companies coupled with owner and analyzer of non-customer data for larger-sized companies — to increase revenues for both companies,” Gillespie said.
The end result helps Salesforce's traditionally small business customer base be more competitive while making the CRM giant more enticing for larger businesses. In turn, IBM gets better traction in the small-to-medium business space, allowing it to expand beyond its traditional enterprise-scale “on premises software” customer base.
“As with any partnership, the proof will be in the pudding. Let’s see what new offerings are rolled out in the second half of 2018 (perhaps in time for Dreamforce next year) but at first blush it sounds like a potential win for joint customers in their quest for greater and easier insights — assuming it is executed well,” Gillespie said.
Organizational Challenges With AI
While the partnership is a significant step for both companies, according to Graham Hogg, founder and CEO of London-based data management specialists Connectworxs, there are still problems, particularly around user adoption.
"While this is a move in the right direction, we still see many organizational challenges in getting teams to use AI and advanced analytics effectively,” he said. “As advanced technology becomes more available to the enterprise, harnessing the ability to help our teams ask better questions will be the key to competitive advantage."
He said there is an ongoing cultural shift in the way that teams interact with one another, connecting domain and analytics expertise to formulate the right questions to drive value. “This is an exciting partnership, but we must make sure to focus on getting our organizations fit for the age of AI by helping them overcome these cultural barriers," he added.
Mining a Rich Pool of Customer Experience Data
Despite that, Tracy Currie, CEO of Denver-based management consulting firm Capto, said the extended partnership has the potential to radically impact customer experience for clients.
Looking beyond this specific announcement, IBM’s data assets in healthcare, weather and other subject areas combined with client Salesforce data, open source and third party data creates a very rich data environment to deploy AI and machine learning to surface insights previously unavailable.
“Better integration and tools will allow our clients to action those insights at the point of customer engagement,” he said. “We’ve seen IBM’s weather data play a critical role in customer experience before its Salesforce partnership, and the capability is that much stronger with these two companies joining forces."
He added that by expanding their relationship, IBM and Salesforce are creating new opportunities to deploy sophisticated and powerful tools to differentiate customer experience. He advised customers to be thoughtful as to the strategy, tactics, timing and sequence driving these investments in order to capture the promise this partnership represents.
Partnering For Personalization
Keith Pearce is currently SVP of corporate marketing for Daly City, Calif.-based Genesys, but previously served as VP of product marketing at Salesforce. Pearce said this is just the latest example of companies executing on strategies that bring a more personalized and prescriptive experience to customers.
“IBM and Salesforce know what we know, notably that businesses thrive when they use the information they already have about customers to anticipate and deliver amazing customer experiences," he said. "In 2018 and beyond, we’ll see the delivery of stellar customer experiences as the single most important thing a company can do to be successful against competitors — even more significant than brand awareness.”
As a final thought, Ryan Lester, director of Customer Engagement Technologies at Boston-based LogMeIn noted traditional models of customer service no longer apply and it has taken two software leaders to develop a solution that can meet the demands of today’s customer.
“This partnership is the first signal that there is still an unmet need for next-generation solutions that bring together the best of customer experience and artificial intelligence. I suspect this market will highly evolve over the next year.”