German Firms Strive to Optimize Salesforce Licensing

Demand is rising among German enterprises for consulting services that can optimize Salesforce license usage and reduce associated costs, a new research report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm, says.

The 2024 ISG Provider Lens Salesforce Ecosystem Partners report for Germany finds that licenses for Salesforce have now become a considerable cost factor for many German companies. As a result, many are seeking service providers that can bundle licenses with Salesforce implementation and operations as a combined full-service offering, the ISG report says.

“Leading providers can do more than support enterprises in efficiently designing their Salesforce operations,” said Dr. Matthias Paletta, director, technology modernization, for ISG in Germany. “They can also help them make optimum use of their licenses and keep costs under control.”

The market for Salesforce implementation is undergoing a fundamental transformation, driven by Salesforce’s recent verticalization strategy, which was significantly accelerated by the acquisition of industry-cloud software provider Vlocity, and with Salesforce’s increased emphasis on innovations that leverage the capabilities of GenAI, the ISG report says.

The Salesforce verticalization initiative began several years ago with the launch of industry-specific products such as the Financial Services Cloud and Health Cloud, the ISG report says. With the acquisition of Vlocity in 2020, these capabilities have become the core elements for Salesforce’s development of industry-specific offerings, ISG says. However, according to the ISG report, general acceptance has been low, as adoption brings additional license requirements and associated costs.

Meanwhile, Salesforce proactively embraced GenAI when in mid-2023 it announced the integration of OpenAI’s products into its proprietary offering, Einstein GPT, the ISG report says. Although the company’s growth curve has flattened somewhat, there are high expectations regarding its GenAI innovations, ISG says.

“GenAI will continue to be a key focus for enterprises in the coming years,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. “They can turn to leading providers for support in using Salesforce as a platform for continuous innovation.”

The report also examines how Salesforce has become one of the leading providers of cloud-based application systems in the form of software-as-a-service (SaaS).

For more insights into the Salesforce ecosystem challenges facing enterprises in Germany, such as considering industry clouds and optimizing AI use, along with ISG’s advice for addressing them, see the ISG Provider Lens Focal Points briefing here.