Why it just might make sense that Salesforce.com is buying Salesforce.org

Yesterday, Salesforce .com announced its intent to buy its own educational/nonprofit arm, Salesforce.org, for $300 million. On its face, this feels like a confusing turn of events, but industry experts say it’s really about aligning educational and nonprofit verticals across the entire organization.

Salesforce has always made a lot of hay about being a responsible capitalist. It’s something it highlights at events and really extends with the 1-1-1 model it created, which gives one percent of profit, time and resources (product) to education and nonprofits. Its employees are given time off and are encouraged to work in the community. Salesforce.org has been the driver behind this, but something drove the company to bring Salesforce.org into the fold.

While it’s easy to be cynical about the possible motivations, it could be a simple business reason, says Ray Wang, founder and principal analyst at Constellation Research. As he pointed out, it didn’t make a lot of sense from a business perspective to be running two separate entities with separate executive teams, bookkeeping systems and sales teams. What’s more, he said there was some confusion over lack of alignment and messaging between the Salesforce.com education sales team and what was happening at Salesforce.org. Finally, he says because Salesforce.org couldn’t issue Salesforce.com stock options, it might not have been attracting the best talent.

“It allows them to get better people and talent, and it’s also eliminating redundancies with the education vertical. That was really the big driver behind this,” Wang told TechCrunch.

Tony Byrne, founder and principal analyst at Real Story Group agreed. “My guess is that they were struggling to align roadmaps between the offerings (.com and .org), and they see .org as more strategic now and want to make sure they’re in the fold,” he said.

Focusing on the charity arm

Brent Leary, principal and co-founder at CRM Essentials, says it’s also about keeping that charitable focus front and center, while pulling that revenue into the Salesforce.com revenue stream. “It seems like doing good is set to be really good for business, making it a potentially very good idea to be included as part of Salesforce’s top line revenue numbers, Leary said.

For many, this was simply about keeping up with Microsoft and Google in the nonprofit space, and being part of Salesforce.com makes more sense in terms of competing. “I believe Salesforce’s move to bring Salesforce.org in house was a well-timed strategic move to have greater influence on the company’s endeavors into the Not for Profit (NFP) space. In the wake of Microsoft’s announcements of significantly revamping and adding resources to its Dynamics 365 Nonprofit Accelerator, Salesforce would be well-served to also show greater commitment on their end to helping NFPs acquire greater access to technologies that enable them to carry out their mission,” Daniel Newman, founder and principal analyst at Futurum Research, said.

Good or bad idea?

But not everyone sees this move in a positive light. Patrick Moorhead, principal analyst and founder at Moor Insights and Strategies, says it could end up being a public relations nightmare for Salesforce if the general public doesn’t understand the move. Salesforce could exacerbate that perception if it ends up raising prices for nonprofits and education.

“Salesforce and Benioff’s move with Salesforce.org is a big risk and could blow up in its face. The degree of negative reaction will be dependent on how large the price hikes are and how much earnings get diluted. We won’t know that until more details are released,” Moorhead said.

The deal is still in progress, and will take some months to close, but if it’s simply an administrative move designed to create greater efficiencies, it could make sense. The real question that remains is how this will affect educational and nonprofit institutions as the company combines Salesforce.org and Salesforce.com.

Salesforce did not wish to comment for this story.


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Orbis: My charity of choice

orbisCharities are a very personal thing. Each of us chooses to donate for a variety of reasons. Often we assist an organization that affects us or our families, typically someone close that suffers from an ailment or perhaps died from it. Many people gravitate to such medical charities, or perhaps to humanitarian efforts around the globe, such as Red Cross or  Médecins Sans Frontières. Animal charities are always popular, be it WWF or the ASPCA. I could list classifications of charities for pages and pages, but we all understand the value of assisting or donating to one or more – we all feel the need to help those less fortunate than ourselves.

Like many folks, I donate to several, but today I wanted to bring light to my favorite charity. I find many folks have never heard of Orbis, not that I blame them. I certainly could name few of the tens of thousands of charities world wide, with so many folk giving up their time and money selflessly to help others.

Orbis international, formed in the 1970’s, works to restore sight and prevent blindness within 3rd world countries. Their devoted doctors do this not only through countless surgeries but also by providing hands-on-training and public health information to the countries they frequent. Furthermore, they advocate for improved facilities and technology. Since 1982 they’ve carried out programs in 92 countries, enhancing the skills of  over 300,000 eye care professionals and treating over 23 million patients.

They operate their own aircraft, a completely refitted DC10 airliner called the Flying Eye Hospital. Check it out. It is flown by a rotation of airline pilots that offer their piloting skills for free, flying the FEH to anywhere it is needed, allowing the eye specialists to work in the hi-tech labs and operating room on board.

I’ve been donating to Orbis for decades. Eyecare has always been close to my heart, having had myopia all my life, and now presbyopia in old age. I use a computer screen for my day job and for my writing and I treasure my eyesight accordingly. LASIK helped for 10-15 years but it fades as a person ages. Thankfully I have no sinister issues with my eyes but it moved me to hear of countless millions of people in poorer countries, particularly children, who have cataracts or other eye diseases threatening blindness.

Thank you eye care professionals and pilots at Orbis, as well as the support staff that keeps the organization working. Sight is a marvelous gift that you bestow upon your patients.



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