Liz Herbert, Vice President, Principal Analyst WEBINAR Dreamforce 2016 Recap: What Customers And Prospects Should Know Liz Herbert, Vice President, Principal Analyst Mark Bartrick, Principal Consultant Year ends imminent. October 13, 2016. Call in at 10:55 a.m. Eastern time

Liz Herbert Vice President, Principal Analyst Liz focuses on the IT services industry, helping clients to navigate this fast- changing market and maximize the business value of their technology investments. As a principal analyst, Liz helps clients to understand the key dynamics in the enterprise application services market and to make smart technology sourcing decisions. Specific topics of focus include SaaS, SAP and Oracle Services, and services for cloud and mobile. Liz has been a featured speaker at leading industry events such as SaaScon, Nasscom, Society of Information Managers, and World BPO Forum. Liz has been quoted in leading publications including The Wall Street Journal, Fortune, The New York Times, and CIO Magazine. Liz has been featured as a technology expert on TV news segments, including Bloomberg TV and Boston-based NECN. She was named IIAR Services analyst of the year in 2010.

Mark Bartrick Principal Consultant, Software Negotiation Mark is a principal consultant for Forrester’s software negotiation practice. Prior to helping develop the software negotiation practice, he served as a senior analyst for sourcing and vendor management clients at Forrester. Mark has been involved in the software industry for over 25 years. He started off selling for IBM in 1986, then joined Gartner in 1998 to help its clients negotiate software contracts. Mark left Gartner in 2002 and set up his own consultancy in the UK, specializing in helping blue chip businesses negotiate software contracts with the likes of IBM, Oracle, SAP, and Microsoft. Mark joined Forrester in December 2011. Mark holds a Bachelor of Arts Honors degree in Business Studies from the University of West Midlands, United Kingdom.

Agenda Dreamforce Recap Forrester’s Take Impact To Current And Future Customers Q&A

Poll question No. 1 Did you go to Dreamforce 2016? Yes, first time Yes, and not my first time No, but attended virtually No, have not been yet

Dreamforce 2016 highlights

No signs of slowdown for Salesforce Salesforce continues its dominance as a SaaS behemoth; now over $8B in revenue (FY17). Salesforce expansion continues into broader CRM for B2B and B2C, including the June acquisition of Demandware (Commerce solution) for $2.7B and the August acquisition of Quip (productivity/processing app) for $750M. New acquisition announced at Dreamforce is Krux — marketing analytics/intelligence solution. Salesforce ecosystem remains vibrant — across long- tail of apps and industry solutions.

Dreamforce 2016 highlights Product The promise AI for everyone, built right into the Salesforce product Industry solutions from Salesforce Learning for everyone — online and onsite Commerce in the cloud, with an emphasis on B2C Salesforce is relentless in its pursuit of great user experience. Financial services cloud

Poll question No. 2 Are you seriously considering or actively using any of the following solutions from Salesforce at this point in time? Einstein Analytics Cloud (Wave) Thunder/IoT on Salesforce Health Cloud Financial Services Cloud Community Cloud

Forrester’s take

Dreamforce 2016: Our take Sales and service adoption remain high and are still the flagship for Salesforce. Salesforce continues to invest in the elements necessary for enterprise-grade software: security, developer tools, training, and education. Industry solutions are gaining early traction with mega brands (such as BoA for Financial Services Cloud and Lilly for Healthcare Cloud). Newer areas focused on AI and analytics align with buyer needs but are unproven. Ecosystems — industry and otherwise — are key.

What it means to current and future customers

1. Sales and Service Cloud remain the lion’s share of the spend Sales and Service Cloud still represent large portion of Salesforce revenues. Deals are growing; most grow year-over-year. Global, enterprisewide deals Recent product shift has been a significant shift — product lines for Service Cloud now diverge from Sales Cloud. What it means: Price/discount and deal structure for Sales and Service Cloud will have the biggest impact on your overall deal health.

2. Newer CRM clouds are small but growing Marketing Cloud is 10% of Salesforce revenues — and growing. Commerce Cloud has great reputation in B2C companies and potential appeal to B2B as well. After multiple versions of “Portals,” Community Cloud looks here to stay. What it means: Pricing is still a bit in flux. Multiple platforms dilute the “one-version” value proposition (for now). Salesforce customers have more design choices to make, which adds to complexity.

3. Services providers are more necessary than ever Major skills shortage in Salesforce talent versus demand Customers need business/strategy consulting and change management help. Not just a one-time project — but ongoing, agile rollout What it means: Deals are growing; deal structures are tricky to navigate (i.e., buying sprints rather than resources); risk mitigation is critical. Market shakeout as smaller firms are too attractive for large firms to pass up — even at high multiples.

Salesforce implementation providers 2015 Will be updated in H1 2017

What’s next

Salesforce: What’s next Despite existing success stories, few Salesforce customers have unlocked its potential as a digital platform for customer engagement and foundation for new business models. Business value is perceived as high, but high prices and eroding discounts create concerns for buyers. We see increasing pressures from Oracle, SAP, Microsoft, and others — but Salesforce remains a formidable behemoth to negotiate with.

What’s next: Salesforce as platform for digital ecosystems

Poll question No. 3 What concerns you most about Salesforce? Security Integration Cost/pricing Resourcing/support needs Other _____________

Trending topics for Salesforce customers Integration Support and governance Multiple orgs Ecosystem — ISVs and services partners Negotiation/renewals with significant dollars at stake

Q&A

Liz Herbert eherbert@forrester.com Mark Bartrick mbartrick@forrester.com