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IDC Salesforce economic impact study makes predictions that, at first glance, seem impossible

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2021-09-21 13:56:29
www.techrepublic.com

Salesforce’s ecosystem, the study said, will be responsible for the creation of 9.3 million jobs and $1.6 trillion in revenues for other companies by 2026. Are those numbers even feasible?

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An IDC report, sponsored by Salesforce, is making some impressive, but seemingly grandiose, predictions: Between now and 2026, Salesforce and the ecosystem that surrounds it will be responsible for the creation of nearly 10 billion new jobs and $1.6 trillion in additional revenue for its partners. 

This isn’t the first year that IDC and Salesforce have issued this report, so it’s worth comparing numbers. Jason Wong, Gartner research VP and lead Salesforce vendor analyst, said that the previous version of the report, issued in 2019, forecasted $1.2 trillion in revenue by 2024. The 2021 number ($1.6 trillion) is a jump of 33%. 

SEE: Research: Video conferencing tools and cloud-based solutions dominate digital workspaces; VPN and VDI less popular with SMBs (TechRepublic Premium)

Where things get shocking is the job creation numbers. “The previous edition forecasted 4.2 million new jobs by 2024 and now it’s projecting 9.3 million new jobs by 2026, which is a 121% jump,” Wong said. 

That’s not to say that Salesforce doesn’t have a massive ecosystem: It does. As of 2021, “the ecosystem of Salesforce partners delivering cloud services to customers is five times as big as Salesforce itself, and will be more than six times as big in 2026,” Salesforce said. That means there are a lot of businesses using Salesforce, whose clients themselves either use, or indirectly touch, the Salesforce ecosystem. 

Two categories of jobs are mentioned: Direct jobs, or “those created in the Salesforce customer base from the revenues generated by the use of Salesforce and its ecosystemʼs cloud services,” and indirect or induced jobs, which are “jobs created in the economy by people filling direct jobs and by spending on local goods and services by Salesforce and its ecosystem.”

These predictions don’t mean that the value of a direct or indirect job created by Salesforce will retain a constant value. In fact, Wong said, it’s likely to decrease over time. “This could be due to factors such as geographic expansion into emerging markets with lower wages and more supply of trained workers to drive down salaries in mature markets,” Wong said.

That said, Wong doesn’t mean that Salesforce isn’t primed to seize early dominance in the world of software ecosystems. According to Wong, Gartner has been noticing an increasing focus on building ecosystems among vendors large and small. “We predict that by 2025, the top 50 technology providers will focus 70% of their partner program budget on attracting, retaining and motivating influencing partners,” Wong said.

The study’s findings support what Wong predicts, namely that IDC expects trends toward remote work, contactless customer engagement and sustainability are “more prevalent than ever,” Salesforce said. 

“IDC forecasts that cloud-related technologies will account for 27% of digital transformation IT spending this year, growing to 37% in 2026, as businesses focus on establishing digital HQs to deliver customer and employee success from anywhere,” salesforce said in a press release. 

Just under three quarters of respondents to the survey underlying the report said they have a digital transformation strategy in place. Of those, Salesforce said, 97% consider cloud computing an important part of that strategy. 

SEE:  AI on the high seas: Digital transformation is revolutionizing global shipping (free PDF) (TechRepublic)

“Salesforce and its ecosystem are doing something right with a broad positive impact on local economies and within their customersʼ organizations,” concluded report authors John F Gantz, SVP at IDC, and Alan Webber, program VP of customer experience at IDC. 

Salesforce’s growth numbers in the report, along with the realization that those numbers are less a fluke and more an industry trend, mean that businesses should at least consider a future in which you don’t buy software, you buy an entire ecosystem. It’s also worth considering whether or not this could give rise to a new generation of
vendor lock-in

 that crosses product boundaries and encompasses the whole of an organization’s computing. Choose your future vendor well. 

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