As cloud adoption grows, a smart move is for vendors to focus on vertical industries. Vlocity is leveraging the Salesforce platform to do so.
Two years ago, in response to questions about his ambitions as vice chairman at Salesforce, former Oracle exec Keith Block emphatically stated that he wants to help the company get to $10 billion worth of revenue. In a follow-up session at DreamForce this year (disclosure, Salesforce covered my travel and expenses to attend the event and is, at the time of writing, a client of Diversity Analysis), Block gave some more detail about how he intends to achieve that aim. Much of the growth is going to come from the creation of vertical-specific solutions built on the Salesforce platform.
This is already happening to an extent – Veeva recently IPOd and was the first company built entirely on a third-party platform to do so. Recently, Salesforce introduced two verticals of its own – health and wealth – and Block indicated that a new vertical – public sector – would be introduced soon. At Dreamforce, I too had the opportunity to spend some time talking with Rip Gerber, who heads up marketing for an interesting third-party vendor, Vlocity. Vlocity’s entire business is built around the premise that there is value in building specific vertical solutions built on top of Salesforce. The company has only existed for two years but has already created four distinct vertical offerings: comms/media, insurance, health insurance, and public sector. Gerber told me that Vlocity already has 20 customers, including Sky Italia, two Government regions in Canada, and the cities of New York and Washington, D.C.
Vlocity has something of a storied history. It is actually chock full of people who were integral to the success of Siebel, another CRM player (now owned, and largely forgotten, by Oracle). Siebel was a company that had extensive success-building vertical-specific offerings, and the Vlocity founders decided to replicate this on a cloud platform. Craig Ramsey, the founder of Vlocity, was ex-Siebel and actually spent 12 years on the board of Salesforce. This is a company that has deep ties with Salesforce and a deep history in vertical enterprise solutions.
Vlocity was set up with $10 million of seed investment from its founding team, but last year secured a highly strategic $42.8 million funding round from Salesforce Ventures and Accenture. That these two players would be behind the Vlocity funding is unsurprising, even outside of the close personal ties. Salesforce sees Vlocity as a key driver of growth for its vertical strategy, while Accenture looks to the massive services revenue that Vlocity can bring to it. Indeed, Vlocity uses Salesforce for their go-to-market strategy, and Accenture for implementing the actual deployments. I’ve also heard through the grapevine that Salesforce’s upcoming public sector vertical offering will, in fact, be Vlocity’s offering rebranded.
Gerber pointed to the excellent traction that Veeva is seeing with its health-specific vertical offering built on Salesforce and explained just how bullish he, and everyone at Vlocity, is on this concept of “verticals on demand.” I pushed Gerber to give an idea of future vertical offerings, and he was a little cagey. Although he did suggest that utilities display many of the same attributes of communications companies, and hence a utilities-specific offering might be a logical extension from their comms one.
Of course, scaling a company at this early stage is difficult, which is where the go-to-market and deployment partnerships make sense. While Vlocity does have its own sales team, it is far smaller than it would need to be it to be doing all of the sales legwork itself.
Verticals are a massive opportunity in the Salesforce ecosystem. I’d predict a rosy future for Vlocity.
