Salesforce’s Secret Sauce To Stay Ahead of the CRM Market: AI

In the large and heavily competed market of Customer Relationship Management (CRM) software, Salesforce is relying on AI to differentiate its product offering from tech giants such as Microsoft, Oracle, and SAP. The bet on AI has allowed Salesforce to stay on top of the market in terms of market share for the past five years, but it needs to keep investing aggressively in technology to maintain the status of the smartest CRM product.

The case for AI & Machine Learning in the CRM market

The customer relationship management software (CRM) space became the hottest segment of the Software Market in 2017, which now represents a $39.5 billion opportunity, surpassing the database management system (DBMSs) space¹. Players in the CRM market include heavyweights Microsoft, Oracle and SAP, but the space has been dominated by Salesforce for the last five years in a role². So, what has Salesforce done to stay ahead of the curve? It understood that AI was the next natural step to increase the value delivered through its CRM platform to business, allowing them to understand their customers better and interact more efficiently.

AI and machine learning capabilities allow Salesforce to make use of the vast amount of data it has from its customers to not only organize and display it in an efficient way but to extract valuable insights for its customers to enhance their sales process. The rationale behind the use of AI in CRM is that automation in data collection and smart data analysis can increase the chances of a lead turning into a sale. But it is not only accuracy that matters but also speed, and since machine learning can process information not only automatically (freeing employees time to actually sell) but also at a faster rate than humans, it comes as a natural candidate for CRM companies to incorporate in their suite of products.

How is Salesforce developing its AI capability

Salesforce efforts to develop an AI-powered offering can be traced back to 2014 when it started making some important acquisitions of AI-related startups. Back in 2014, it acquired RelateIQ, which used searches of unstructured data from email, social networks, and calendars to automate large portions of the sales process, for $390 million³. In 2016, it acquired two other AI-related startups MetaMind, an automatic image recognition platform, and PredicionIO, an opensource machine learning server4. That year, 2016, also saw the launch of a Salesforce Research Group focused on delivering AI research across deep learning, natural language processing, and computer vision to Salesforce’s product and engineering teams5.

The combined acquisitions and internal research group resulted in the 2016 launch of Salesforce AI technology umbrella Einstein, which aims to deliver AI across all of Salesforce’s platform5.  According to the company, Einstein brings more customization of the Salesforce platform to clients by leveraging on machine learning to automatically discover insights, predict future behaviors and automate tasks5. One of the key things that make Einstein very appealing is the access to the vast amount of data across the Salesforce platform and the capacity of the system to learn from this data to improve its recommendation/prioritization engine.

After the launch of Einstein in 2016, Salesforce efforts to staying ahead of AI continued with two interesting events that added to its acquisitions and internal team initiatives. In September 2016, after Einstein´s first year anniversary, the company launched a $50 million fund to invest in startups that build AI applications on top of the Salesforce platform6. Furthermore, it also announced a new partnership with IBM to connect Watson, IBM’s AI tool capable of question-answering questions posed in natural language7, to Einstein to enhance the CRM´s capability of delivering smarter and faster results8.

Staying ahead of the curve

Einstein is now two years old and is well embedded across all of Salesforce’s offering. The company announced back in February of 2018 that Einstein was producing 1 billion AI-powered predictions per day, an important milestone in terms of product effectiveness (considering it was making zero predictions two years ago)9.

Salesforce has been successful so far in staying on top of the market with its bet on AI, but it is important to understand that this has to be a continuous effort. The other competitors in this segment have not stayed arms crossed and have invested in AI too, trying to catch up to Salesforce. For example, Microsoft has been introducing AI capabilities to its Dynamic cloud offering at a faster pace in 201810. It is essential to take into account that Salesforce competitors are huge tech companies with access to large pools of resources to compete.

Taking this into account, Salesforce should keep being very aggressive in both acquiring and investing in AI companies, while at the same time focusing on attracting and developing the best-in-town AI talent.

What’s next?

AI is giving the CRM industry an inflection point, allowing companies to differentiate their products and escape becoming a commodity. But as tech giants such as Microsoft, SAP, and Oracle, along with Salesforce, continue to develop their AI capabilities, will AI-powered CRM offerings become a commodity too in the mid-future? Will Salesforce be able to spot the new wave of growth after AI to stay ahead of the curve?

(792 words)


¹ Gartner. “Gartner Says CRM Became the Largest Software Market in 2017 and Will Be the Fastest Growing Software Market in 2018”. April 10, 2018.

² PR Newswire press release based on IDC Worldwide Semiannual Software Tracker. May 2018.

³ Techcrunch. “Salesforce Buys Big Data Startup RelateIQ For Up To $390M”. July 2018.

4 VentureBeat. “Salesforce buys hot deep learning startup MetaMind, services shutting down May 4”. April 2016.

5 Salesforce. Press release “Salesforce Introduces Salesforce Einstein – Artificial Intelligence for Everyone”. September 2016.—Artificial-Intelligence-for-Everyone/default.aspx

6 Techcrunch. “Salesforce Ventures launches $50M fund to encourage AI development on Salesforce platform”. September 2017.

IBM. IBM Journal of Research and Development: Volume 56 Issue 3.4. May-June 2012.

8 Salesforce Press Release. “IBM and Salesforce Announce Landmark Global Strategic Partnership”. March 2017.

9 Salesforce Press Release. “Salesforce Einstein Delivers More Than One Billion AI-Powered Predictions Per Day”. February 2018.

10 CNBC. “Microsoft is upping its A.I. battle with Salesforce”. September 2018.



Redefining the oil and gas industry through machine learning


Machine Learning at the heart of JP Morgan’s growth strategy

Student comments on Salesforce’s Secret Sauce To Stay Ahead of the CRM Market: AI

  1. Very interesting article! I really see the potential of AI in CRM platforms, specially because sales are becoming increasingly virtual and the array of available data from customers is becoming larger every single minute. I also agree that understanding natural language is a key element for a AI-powered CRM platform.

    Regarding your open question, I actually believe that Sales Force is already in advantageous position in offering AI-powered CRM simply because they started first. Accuracy in AI systems is all about how trained your machine is. Therefore, I believe they are apt to offer better services by leveraging their experience with AI. My biggest concern would be related to Microsoft. They are the owners of LinkedIn, Hotmail and Skype. I assume those companies are owners of very valuable data sources which can be used by Microsoft to improve their predictive capabilities in CRM.

  2. This is really interesting – I know that virtually all sales organizations use some form of CRM software (if not Salesforce), but I was not aware that Salesforce was the first to develop these advanced AI capabilities. To your question regarding AI services becoming commoditized, I do agree that that is a concern – however, it seems as if Salesforce has already gotten ahead of the curve by making a “chunk” of Einstein available to all of its users [].
    I think that this move – bringing its internal knowledge to external clients – is bold, but brilliant. Not only will their clients get used to the (hopefully) success that AI drives in the sales process, but they will also become used to the intricacies of how Salesforce’s specific AI system works. I think that users will not want to incur the switching/training/development costs that come with moving to a new AI service (and one that is likely not free), so I do believe that Salesforce has a first-mover advantage in this space.
    The larger concern for me here is whether Salesforce’s AI service is convincing clients to perform sales-related activities that could end up being harmful to the growth of their organizations or to end-consumers down the process – I would be really curious to see whether the AI service encourages clients to be more “aggressive” in their tactics without being completely aware of the social dynamics of sales. If Salesforce is able to figure out that complexity, then I do think it will be continue to be highly successful in this space.

Leave a comment