An overview of several multi-billion dollar SaaS vendors built 100% on top of Salesforce.
When you hear Salesforce, the first thing that comes to mind is likely their core product offerings - the CRM used by countless Sales teams (Sales Cloud), their Call Center application powering companies like AT&T, Southwest Airlines, and PayPal (Service Cloud), or their acquisition spree that included multi-billion dollar deals for Mulesoft, Tableau, SteelBrick, Slack, and others.
However, one of the most overlooked areas of Salesforce's business is their OEM licenses. As Salesforce Partner CodeScience describes it "for OEM partners, you are selling your application as a standalone solution that has the Force.com licenses embedded within your application to either new or existing Salesforce customers either independently of the AppExchange."
OEM is broadly defined as a software product that is used as components in another company's product, which is then sold to an end customer. In the context of Salesforce, this essentially means that other SaaS vendors build customized versions of Salesforce, typically for a specific vertical, on top of platform and sell it as a separate offering. Salesforce collects revenue on all licenses sold by this vendor, while doing little more than creating the platform in the first place. Depending on the type of custom Salesforce Application Development a company has planned, they want to select the right type of Salesforce Implementation Partner or Contractor.
Founded in 2007 by Peter Gassner, ex SVP of Technology at Salesforce.They went public in 2013 and have a current market cap of $44B. Veeva is built entirely on top of the Salesforce platform with a tailormade solution for the Life Sciences vertical.
They were an early pioneer in leverage out-of-the-box Salesforce functionality and building a heavily customized set of features on top of the existing infrastructure to serve a niche user base.
Branding themselves a 'Bank Operating System', this founding story is another brilliant example of identifying a niche user base that was underserved by existing SaaS vendors and building a custom solution for the vertical - all on top of Salesforce.
nCino was founded in in 2012 by 2 Financial Services veterans and still operates with a flagship product that is essentially just Sales Cloud for Financial Services. Current market cap is $5.5B.
The founding team at Vlocity took the vertical strategy 1 step further and set out to build industry specific solutions for multiple verticals from the start.
While also built 100% native to the Salesforce platform, they saw early success customizing the Salesforce offering to better suite the Public Sector, Media, Telecommunications, Financial Services, Energy & Utilities, and other areas prior to their eventual acquisition by Salesforce.
Vlocity is now Salesforce Industries.
Unlike the previous examples where vendors modify core features & functionality to better service a specific industry, FinancialForce is a SaaS vendor that has built an entire ERP / Financial Systems product on top of the platform.
This is one of the few Business Technology areas that Salesforce doesn't have a footprint and FinancialForce as raised $200m over the past 10+ years to fill the gap.
Founded in 2008 by another Salesforce veteran, Tien Tzuo, Zuora predicted the rise of the subscription economy (in both B2B + B2C businesses) and built a SaaS solution to help companies managing customer subscriptions, billing, quoting, and more at scale.
Another example of the platform serving as the core infrastructure for a massive SaaS offering deeply integrated to front office & back office systems.
Founded in the early 1980s, Blackbaud offers a suite of SaaS products tailor-made for non-profits, foundations, education institutions, and healthcare organizations. While they have a broad suite of products, the core focus of the business is CRM applications for nonprofits, which comes in 3 distinct products: Raiser's Edge (the flagship), Edge NXT, Luminate CRM, and Blackbaud CRM.
Luminate is the mid-market solution and one of the leading offerings from Blackbaud - this product is built entirely top of the Salesforce platform.
In 2021, total revenue across all products was $927.7m with a current market cap of $2.7B (as of May 2022).
Similar to Veeva (Pharma), nCino (Financial Services) and Vlocity, Litify is the exact type of OEM Partner that Salesforce loves! Litify is an industry-specific CRM solution for Legal Services and has essentially taken the native functionality in Salesforce and modified it to be a more tailored solution for this industry. Interestingly, Litify was launched out of Morgan & Morgan, which is one of the nation's largest personal injury law firms, so it's the type of platform that came from a company's own necessity (similar to Amazon Web Services) and then productized based on the needs of the broader market. Litify has been growing steadily over the past 5 years and currently has a team just under 200 people.
Another industry-specific solution built natively on top of the Salesforce platform, AgentSync was founded in 2018 and has absolutely exploded over the last 3+ years as a 'Producer Management Platform' catering to the Insurance industry. As of December 2021, the team has raised a total of $111m and is led by Founders Jenn Knight (formerly Dropbox, Stripe) and Niji Sabharwal, who both spent years building internal Salesforce teams within high-growth organizations before branching out to build a custom solution on the platform that is designed to help Insurance Carriers, Agencies, and Underwriters manage the end-to-end process.
In the 2010s, there was a battle for market dominance between 2 CPQ vendors - SteelBrick and Apttus. The winner was declared following Salesforce's 2015 acquisition of SteelBrick for $315m.
At that stage, Apttus had raised $400m and was still a massive vendor in the CPQ space, which ultimately led to a Private Equity acquisition and merger with Conga, another major Salesforce vendor and provider of CLM and Document Management tools.
To date, ServiceMax has raised a total of $284m, including participation from Salesforce Ventures, and was meant to go public via a SPAC in 2021 at an estimated valuation of $1.4b. ServiceMax is a Field Service Management application for equipment manufacturers and service providers, which puts them in direct competition with Salesforce's Field Service Lightning offering. While there is a possibility that ServiceMax gets scooped up by Salesforce (similar to SteelBrick becoming Salesforce CPQ), there is just as much of a chance that Salesforce faces the competition head on and continues to strengthen their Field Service tool as an alternative.
Founded in 2018 by Salesforce Alums, Qualified is a newer entrant to this list. The offering is a conversational Sales & Marketing platform built for companies using Salesforce to easily engage with website visitors and convert them to qualified leads. In fact, Qualified is the tool powering real-time chat functionality on the Salesforce AppExchange, which enables vendors to actively engage and communicate with prospective buyers while they are exploring the offering on the AppExchange. Given the company's close ties to Salesforce, including the fact that Salesforce Ventures has participated in every round of funding so far, and the fact they already have a strategic partnership in place, we wouldn't be remotely surprised to see them acquired by Salesforce within 2-3 years.
This one deserves an asterisk since the entirely of Formstack's product offering is not built entirely on top of the Salesforce platform. However, a growing suite of their products - Forms for Salesforce; Documents for Salesforce; Formstack Sign - are native Force.com offerings that provide a simple suite of tools to streamline parts of customer interaction, team collaboration, and back office processes.
This is a powerful, no-code tool that allows companies to build simple workflow automations and presents an alternative to tools like DocuSign, Dropbox, Typeform, and others in the space. More often, this is a solution built for SMBs.