Salesforce Consulting Partners are constantly looking for ways to expand their capabilities and grow their businesses. One common strategy these firms use to achieve those goals is acquisitions. By acquiring other Practices, Salesforce Consulting Firms can access new technology, expand their client base, and diversify their service offerings.
It's how they remain competitive in such a changing market.
3 main reasons Consulting Firms make acquisitions:
1. Increasing bench of talent
2. Going vertical
3. Entering new markets
Let’s break each down:
To increase bench of talent
This is the move made by Consulting Firms that are well established, have a strong pipeline of demand, and good Strategic Alliances with the SaaS vendor they serve, who funnel continuous business to them.
Adding talent allows them to capitalize on more business.
👉 Example: IBM buying Bluewolf. This move immediately increases the size of IBM’s Salesforce Practice, enabling them to take on more and larger projects.
To enter sub-verticals within their primary market
As SaaS continues to move toward vertical solutions, the complexity of their product grows and requires specialized experience in a particular domain.
Acquiring domain-specific Partners - regardless of size - allows them to develop a distinct set of capabilities to go deeper into existing accounts; as well as wider into the overall market.
👉 Example: Salesforce acquiring Acumen Solutions, who had deep domain expertise in the Public Sector. This coincided with the acquisition of Vlocity and a push toward Industry Clouds.
To enter new markets
We see this a ton within the Salesforce ecosystem and it can be used to enter new markets geographically and entirely new business areas.
This type of acquisition is straightforward.
You’re in a market I want to tap into, and it’s easier for me to do it through you than build a team organically.
An area this happened quickly was around Marketing Cloud.
👉 Example: In recent years, we have seen the big Marketing / Ad Agencies invest in Salesforce Marketing Cloud Practices so they could upsell existing accounts with this Technology Practices.
This includes Interpublic Group (IPG) acquiring RafterOne, Omnicom acquiring BrightGen, and Dentsu making multiple acquisitions.
Salesforce Acquires Partners Too
You can see the same strategy adopted by Salesforce as well - acquiring Salesforce Consulting Partners in the ecosystem to boost the capabilities and reach of Salesforce Professional Services.
A few notable examples of Salesforce Partner Acquisitions include:
Model Metrics (2011)
This was back in the early days of Salesforce and the Partner ecosystem looked a lot different than today.
When you're a high-growth SaaS vendor with an unestablished Partner network, it can be a serious impediment to growth - who is implementing your solution at all the Customers you're bringing on board?
In this case, Salesforce made a necessary acquisition of a leading Salesforce Consulting Firm so they could bring Professional Services in-house and make sure Delivery capabilities stayed on par with the growth they were driving in new Sales.
Acumen Solutions (2021)
This acquisition came less than a year after Salesforce acquired Vlocity (now Industries Cloud).
And it perfectly follows the strategy of acquiring industry-specific Consulting Firms to more effectively penetrate specific verticals. The acquisition of Vlocity would prove to be an incredibly effective tactic for Salesforce to penetrate new markets but they needed to ensure Professional Services had the ability to deliver - Acumen had a massive footprint in the Public Sector, Financial Services, and other key markets Salesforce would enter with Industry Cloud, so adding these Delivery capabilities was brilliant.
Traction on Demand (2022)
This acquisition remains somewhat confusing, as it was a move strictly designed to increase the talent bench within Salesforce Professional Services. Traction was the largest pure-play Salesforce Partner in North America with a team of 1,000+ Salesforce Consultants.
As others have pointed out, 24% YOY growth when you're at the scale of Salesforce is still a ton of new deal flow every Quarter, so this was a move they felt was necessary to maintain the Delivery capabilities needed to service new accounts.
