Julian Hodges, CTO
I have been engaged in the Configure Price Quote (CPQ) market for over 20 years (starting with Clarify Clear Configurator for those old enough to remember it!). I remain as active as ever in the space so its always interesting to me to observe the ebb and flow of technology trends and the coming and going of ISV products in the CPQ domain. For example – ServiceNow’s recent entry into CPQ and even more recent entry into CRM promise to shake the enterprise end of the market up significantly.
As various commentators have noted, on LinkedIn and elsewhere, Salesforce CPQ (i.e. what was originally Steelbrick) is going end of sale (EoS). I expect that this is a step on the trajectory towards end of life (EoL) with eventual implications for support and maintenance. I think, however, that’s likely to be quite a long way down the road, given the extensive customer base.
Irrespective, though, of the possibility of EoL, the EoS status makes it pretty clear that the pattern of minimal investment into Salesforce CPQ (which has been apparent for several years) is almost certain to be even more absolute going forward. In short, Salesforce CPQ can now be viewed as a legacy application.
Why is this important for existing Salesforce CPQ customers? For some, it might not seem immediately problematic and various customers are likely to consider the effort and disruption of migration to Revenue Cloud or another ISV product as being not worth the effort and investment. This is a pragmatic position but shortsighted if it is not incorporated into a broader strategy. The reason that CPQ vendors invest in capabilities is because their customers need them in order to stay competitive. Very commonly, over the course of the past 20-odd years, I have heard customers telling me that their quoting and ordering applications are stopping them from doing business. Their competitors can innovate faster, bring those innovations to market faster and close deals faster – CPQ is critical to that process. A CPQ stuck in the 2010s will inevitably, sooner or later, become a brake on growth and a cause of losing market share. In fast moving/evolving verticals such as telecommunications and technology this problem could be existential.
What kind of innovations am I referring to? Historically, everything from small-ish functional improvements to design-time tooling and end-user experience. Those are very important dimensions but now we have another huge, game-changing factor – namely, AI. If there is no investment in Salesforce CPQ then it will not stay in lockstep with this forthcoming massive technology landscape shift.
So what should Salesforce CPQ customers do? Some might consider the risks to be minimal or non-existent, but, in my opinion, this is shortsighted – given my points above. Waiting until the competitive pain is already upon you before doing anything means that you then face a lengthy (months to years) lead time of budgeting, selection, implementation, migration and adoption. Meanwhile, foresighted competitors are continuing to erode your market share. With this in mind, existing Salesforce CPQ customers should at least make a deliberate effort to evaluate their CPQ risk exposure.
Where, though, can Salesforce CPQ customers switch to? One obvious option is Revenue Cloud with its CPQ descending from VLocity -> Salesforce Industries. That is a sophisticated solution but customers should seriously consider the likely capex and opex of going down this route. Other options, whilst they are evaluating, could include a broader look at CPQ vendors in general. That’s diligent but likely to be a time consuming and expensive exercise, taking critical staff away from operational roles.
Referring back to my note in the first paragraph – customers should note that ServiceNow now has a really compelling offering in this space. It is common to see enterprise customers deploying both ServiceNow and Salesforce, delegating CRM (including CPQ) to Salesforce and service management down to CMDB to ServiceNow.
Well, now there is another architectural option. ServiceNow’s entry into CRM and CPQ means that there is a viable, out-of-the-box, option to consolidate these domains onto ServiceNow. The value that can be realised by data, processes and business logic working in a coherent, common solution, all the way down from lead to sales to service to change and deep into the CMDB is huge, especially for telecommunications and technology companies. For customers that already have ServiceNow, there is a strong case for considering migration to it as part of a plan to retire Salesforce CPQ.
ServiceNow CPQ is new, which means that it is in a process of catching up with mature vendors on various features. On the other hand, it also means that – compared to much of the remainder of the market::
- It is being built from the ground up entirely on ServiceNow’s coherent, connected, composable platform. It is not a hotch-potch of legacy architecture, replatformed technology and migrated capabilities.
- It is designed for, and investment targeted at, the CPQ needs of enterprises today and tomorrow, not for the markets, technologies, products, services and consumer / customer sentiments of 10 years ago.
- That investment is going directly into capability, not sunk into replatforming / re-architecting.
- That investment is driven by the market – meaning ServiceNow’s customers and prospects have a real opportunity to get their critical needs incorporated into the roadmap.
- That investment is happening and will continue to happen since it is critical to ServiceNow’s strategic and rapid advance into the CRM space.
This post is already much longer than I originally intended – I am getting carried away by analysis fever as usual – so I’ll wrap it up here. If anyone (Salesforce CPQ customers or otherwise) wants to know more about how they could benefit from ServiceNow CPQ – or the broader ServiceNow CRM offering then please contact us at info@sneeyeg.com.