Based on Salesforce.com’s core CRM service and built on the Apex platform, the Wealth Management Edition desktop combines financial information with CRM data in a bid to help advisor’s better manage their clients.
The company has been developing the edition with input from several financial services organizations, including Dow Jones and Thomson Financial, which are working to integrate their data streams with the Salesforce.com wealth management system to enable the delivery of real time financial news and data, and Merrill Lynch, which will be the first user of the system.
Merrill Lynch is an existing customer who signed onto the CRM service in May 2005 with 5000 subscribers, and is now expanding that to 25,000 based on the Wealth Management Edition.
It is the customer Salesforce.com trailed as its largest ever enterprise customer when it announced its financial results earlier this month. Not only is Merrill Lynch significant for the size of the deal but also because it adds credibility to Salesforce.com’s enterprise pitch.
Salesforce.com is aiming high and believes there is a market of two to three million financial advisors and brokers for its vertical service. It is also pitching it as a Bloomberg usurper, capable of being used in place of Bloomberg’s proprietary terminals at the high end of the market.
There is a large market Bloomberg has yet to tap, said Clarence So, chief marketing officer for Salesforce.com EMEA. They have 250,000 terminals that are proprietary and high end but there are two to three million advisors and brokers out there who don’t have them [because] they can’t afford them or because they are proprietary. They are ripe for the taking. We are entering at an attractive price point.
Wealth Management costs $500 per user per month, compared to around $1,500 for a Bloomberg terminal and data service. Salesforce.com’s strategy is to gain volume as quickly as possible by picking off the low hanging fruit, the same approach it used with its initial CRM service.
Whether it can displace the entrenched Bloomberg within high-end operations is questionable, but it has some advantages. Unlike the Bloomberg systems it does not require a proprietary terminal or use a proprietary data format, so it can work with data feeds from multiple service providers, including Dow Jones and Thomson Financial.
So also highlighted the benefits of integration with the CRM systems. At Merrill Lynch they really wanted financial information blended into the CRM product, they wanted the two functions seamlessly merged and that is where proprietary Bloomberg has a challenge, he said.
As well as grabbing the low hanging fruit, the company will also go after customers it shares with Bloomberg as it tries to infiltrate the high end of the market.
The vertical edition opens up a new and potentially large revenue stream due to the size of the potential market and because it costs substantially more than any of the CRM service variants. It could answer the critics who during the recent quarterly results announcement criticized Salesforce.com for not growing fast enough. While Salesforce.com is not commenting on potential revenue gains, a Merrill research analyst predicted that the new service could generate $50m to $70m revenue per year.
There is more to come because So said this is the first of several vertical editions for the financial services market with mortgages,insurance and capital markets prime candidates for the next editions because their behaviour is similar to that of financial advisors, which would make it easier for Salesforce.com to quickly develop for their needs. An area of concern is whether Salesforce.com has the resources to develop and support multiple vertical editions, despite its partner-centric development strategy.
Subscribers to Wealth Management, which will be available as of Q3, will get all the features of the core CRM system plus industry specific functionality including Client 360 profiling, Know Your Client tracking for recording regulatory-mandated data in client records, Client Team Calendaring, Client Action Plans, and Household Management. As it is built on the Apex platform there is scope for customization and to integrate applications and create mash ups from applications on the AppExchange.
