Salesforce.com to acquire Radian6

Tags: cloud computing, customer care, social media

On March 30, Salesforce.com entered into a definite agreement to acquire Radian6. Radian6 provides customers with a platform that monitors social media. Radian6 products include an engagement platform that helps organizations connect with communities and individuals, and an analytics platform that helps organizations track and analyze their social media activities. The total deal is valued at $326 Million USD. According to announcement by Salesforce.com Radian6 will be integrated into CRM unit. The main benefits of the acquisition will be:

• Sales and Service Cloud:  Social media monitoring is becoming a requirement for companies. By combining Radian6's social media monitoring and engagement platform with Sales Cloud and Service Cloud, companies will be able to gain real-time social intelligence on their customers, and improve decision making.
• Salesforce Chatter: Radian6 and salesforce.com will create the bridge between public social networks, like Facebook, Twitter, YouTube, blogs and online communities, and Salesforce Chatter. As a result, Chatter feeds will now be able to contain both internal conversations and external social media conversations.
• Force.com Platform: Developers will be able to build apps that leverage Radian6 social media monitoring capabilities. In addition, the integration of Radian6 with Force.com will benefit midmarket companies by helping them enhance their marketing and sales capabilities through the use of social media. 

IDC believes that the integration of social media into Enterprise applications, specifically CRM will become increasingly important in the coming years. While widespread adoption of enterprise social business software is still immature, and many IT executives are still unsure of the ROI that these initiatives can generate for an organization, IDC believes that social business software is poised to experience rapid growth across Asia enterprises. The dramatic rise in the use of social media is having far reaching effect on how enterprises manage their brands and interact with customers. Over the past several years, as social media has evolved, enterprises have become more interested in using it as not only another marketing channel but also a valuable way to gain customer intelligence.  IDC believes that this trend will continue into the foreseeable future.

From an AP perspective, IDC believes that if Salesfoce.com can successfully integrate the Radina6 social monitoring tools with their cloud based CRM solution they will be in a good position in this region. Currently cloud is one of the more talked about technologies in AP. By combining social media into their CRM platform, Salesforce.com will be able to further differentiate their CRM approach from their competitors.

Finally, IDC believes that enterprises should be looking for ways to integrate social media with their current CRM solutions. If done successfully, organizations will be able to capture customer complaints and compliments, as well as track competitors, customer's sentiments, and market responses. Empowering this information with analytics will bring enormous benefit to Asia enterprises, as well as help them better understand customer needs and predict future buying opportunities.

Daniel-Zoe Jimenez also contributed to this post.

Asia/Pacific Financial Services: Megatrends to Watch in 2011

Tags: asia/pacific, financial services, it priorities

IDC Financial Insights' activities across thirteen markets in the Asia/Pacific point to several notable trends in 2011. Banks and technology vendors alike will have to make sense of the macro-level drivers of the 2011 scenario, ultimately deciding which strategies and investment priorities of the past years need to be intensified and which need to be discarded in light of a drastically different marketplace. 

1. Super-regionals continue to emerge. In several of our reports last year, we discussed the emergence of what we called super-regional institutions, institutions that stepped up their acquisitive activities in several markets in the region and in a short period of time created their own regional franchise. There are 10 or so super-regionals that made their mark in 2010, these banks will continue to build traction in their markets of choice in 2011. There are four others that will become super-regionals by the end of this year.  Other than Australia, super-regional stories will come out of Indonesia and China. Banks in other countries, specifically Thailand, South Korea, and the Philippines will have to address why their super-regional strategies have been slow in the making.
2. The road map to One ASEAN. A new angle to the super-regional story is the industry's increasingly serious consideration of the ASEAN Economic Community (AEC), which will, if everything happens as planned, come to fruition by 2015. Among other things, the AEC is expected to liberalize financial services in the 10-member Association of Southeast Asian Nations, allowing more and newer players to compete with domestic incumbents. The region's banks will have to seriously consider the prospects of a 700-million-strong market and anticipate the unique trade finance and corporate banking opportunities therein. Alongside the creation of the AEC is the continued expansion of trade and economic cooperation with ASEAN partners like China, Japan, South Korea, Australia, New Zealand, and India — effectively made up of the major economies of the Asia/Pacific. Furthermore, banks will continue to urge the region's central banks to establish a regional banking framework to support this economic integration and to standardize financial regulation. There will be a push to allow more centralization of IT and operations, enabling organizations to reap the benefits of technological innovations like cloud computing.
3. The race for cheap deposits continues. Three trends serve to make funding even tighter for banks in 2011 — an increasing interest rate environment that has already led to higher costs in the wholesale market, more aggressive competition domestically for customer deposits, and more stringent regulation governing reserve ratios and liquidity coverage. Banks with significant CASA bases (ratio of deposits in the form of Current Account and Savings Account to the total deposits) continue to hold significant competitive advantage. The battle for retail deposits, frenetically fought in 2010, will persist in the coming year.
4. Loan growth targets back to normal. While a few markets like Singapore and Indonesia will see their banks accelerate lending even further, we expect banks in general to moderate their loan growth targets in 2011. This "scaling back" does not portend lackluster lending activity in the next 12 months but rather underscores how exceptional the past years have been, in terms of credit provisioning, huge stimulus programs, and hypergrowth in bank lending. In some cases, this scaling back is also crucial to prevent overheating. In China, the government will likely further push up reserve ratios and more strictly enforce that loan growth targets are not breached. These measures will accompany a continued increase in interest rates that are meant to prevent overheating of the economy. Meanwhile, Indian banks are scaling down previous loan growth targets as they are not seeing robust demand for loans outside of the infrastructure sector (a sector boosted by huge government infrastructure programs).
5. Disruption in fee income. A rethink of banks' fee income strategies is needed, in light of how current sources of fee revenue are being eliminated or capped or put under question. This is not specific to the Asia/Pacific region, caps in debit card merchant fees (thanks to the Dodd-Frank Act) and the continued effort by Elizabeth Warren's Bureau of Consumer Financial Protection against the "tricks and traps" of the U.S. banking industry, all point to how this is indeed an industrywide undertaking. In Australia, new measures to cut exit fees on mortgages (although this was more to foster competition) and deposit account transaction fees (also seen in New Zealand) are already being implemented.  And in the Philippines, banks will be able to take advantage of the new one-day central clearing system but will stand to lose a key source of fee income in returned checks and draws on insufficient funds. We believe that banks will offset fee revenue they will not be able to see out of their retail business by expanding fee generation from commercial and corporate banking, investigating opportunities not only in trade finance and transaction banking but also in advisory and consulting services. Other institutions will be looking at entirely new business models — debt recovery services and cloud computing provisioning are two of the most frequently cited alternatives.
6. Midsize institutions fight back. The highest loan growth targets that we are seeing at the onset of 2011 come from ambitious midsize banks in several markets across the region. To some extent, they continue a trend we saw in 2010 of midsize players competing aggressively in the deposits business, most of the time to the detriment of margins. This aggressive drive is also seen in IT plans — if one were to look at the growth in bank IT spending for 2011, most of the highest growth rates would come from tier 2 players. These institutions will be spending on technology capabilities that will allow them to handle greater transaction throughput, bring on board many new customers, and support the expansion of their product offerings. Their aggressive spending plans belie a conviction that their best chance to make it to the big leagues is during this period of economic revival.