When Salesforce announced it was acquiring Vlocity for $1.33 billion in February, it was a deal that made sense for both companies. Today, the company announced that the deal has closed and Vlocity CEO David Schmaier has been named CEO of a new division called Salesforce Industries.
Vlocity has built several industry-specific CRM tools such as media and entertainment, healthcare and government on top of the Salesforce platform. While Salesforce has developed some of its own industry solutions, having a division devoted to verticalized tools creates additional market opportunities for the company.
Schmaier sees the new division as a commitment from the company on the value of an industry-focused approach.
"As Vlocity becomes part of what we're calling Salesforce Industries, this will be a larger group within Salesforce to really focus on bringing these industry-specific solutions to the customer, helping them go digital and working in a whole new way," Schmaier told TechCrunch.
Salesforce president and COO Bret Taylor will be Schmaier's boss. Writing in a blog post announcing the new division, Taylor said that like so many aspects of technology solutions these days, the industry focus is about helping companies with digital transformation. As the world changes before our eyes during the pandemic, companies are being forced to move operations online, and Salesforce wants to provide more specific solutions for customers who need it.
"Companies in every industry have a digital transformation imperative like never before — and many are accelerating their plans for a digital-first, work-from-anywhere environment. With Salesforce Customer 360 and Vlocity, our customers have the most advanced industries platform as well as tools and expert guidance completely tailored to their specific needs," Taylor wrote.
Schmaier says the fact that his company's tooling was already built on top of Salesforce allows them to really hit the ground running without the integration challenges that combining organizations typically face after an acquisition like this one.
"I've been involved in various mergers and acquisitions over my 30-year career, and this is the most unique one I've ever seen because the products are already 100% integrated because we built our six vertical applications on top of the Salesforce platform. So they're already 100% Salesforce, which is really kind of amazing. So that's going to make this that much simpler," he said.
It's likely that Salesforce will continue to build on the new division and add additional applications over time given the platform is already in place. "We basically have a platform now inside Salesforce to build verticals. So the cost to build new verticals is a fraction of what it was for us to build the first one because of this industry cloud platform. So we are going to look at opportunities to build new ones but we're not ready to announce that today. For starters, we are forming this one organization," Schmaier said.
The company reported a record quarter last Thursday, but light guidance for next quarter spooked investors and the stock was down on Friday (it is up .77% today as of publication). The company does not rest on its laurels though, and having a division in place like Salesforce Industries provides a more focused way of dealing with verticals and another possible source of revenue.