The Effect Of HubSpot’s CRM Launch On Salesforce

Editor’s note: Serge Salager was formerly CEO of OneMove Technologies and a marketing manager at Affinnova and Procter & Gamble.

After several years of relatively stagnant waters, what was a dull CRM landscape dominated by one player is heating up dramatically.

Salesforce officially put its $3.5 billion market acquisitions building blocks together on a “Marketing Cloud” at last month’s Dreamforce event. It also announced its entry into health care and targeting a $1 billion in additional revenue from this avenue.

Salesforce’s recent moves might have been triggered by significant swirls under the surface that were not perceptible by outsiders until now.

Rumors of LinkedIn potentially entering the CRM space have recently surfaced with the allegedly leaked confidential documents and significant media attention. Salesforce is undoubtedly the CRM tool but LinkedIn’s ad-hoc database of all professionals in the planet clearly gives vertigo to everyone working in the industry.

HubSpot Announces Its Own CRM

There is a new entrant into the CRM market, and, as life has some interesting twists, it comes from a company that Salesforce itself helped fund (alongside other household names like Sequoia and Google Ventures).

The company is HubSpot and CEO Brian Halligan brought the company to an almost $1 billion IPO earlier this month. HubSpot has discretely announced its foray into CRM in its website before its IPO by reaching out to willing beta testers.

So not surprisingly, HubSpot announced last month the launch of its CRM platform at the company’s #inbound14 event in Boston. This is probably a poke in the eye to Salesforce by having acquired (via ExactTarget’s purchase last year) HubSpot’s rival Pardot.

The CRM tool is marketed as “HubSpot sales platform” or “Sales accelerator product” and comes in a package that integrates the wonderful Sidekick app, which allows users to track email openings and, as such, the level of interest, by prospective clients. The latter is a crucial benefit, as CEOs want their sales reps to focus only on customers that have “shown” interest in one’s products.

While the package is already being used in a beta form, HubSpot said it will be available to existing customers in early 2015.

HubSpot CRM indirectly claims to be different from Salesforce CRM primarily in its simplicity of use and the riddance of manual entries. This is very promising as the time sales reps spend on Salesforce CRM and the stacking of more and more added features are part of Salesforce customer’s moans.

The promise that HubSpot’s CRM platform will be intuitive and easy to use is not a trivial feature. After all, the iPhone cosmological take-over of RIM’s Blackberry grip of the smartphone industry was arguably due to the iPhone’s phenomenally better user experience.

The most striking feature, however, is that, gasp!, it is claimed to be free. Although not totally clear at press time, it will probably be free under a freemium scheme or for current HubSpot users.

This development is interesting as Salesforce is clearly using its grip on the sales department to enter into the CMO office with its recent Marketing Cloud launch. HubSpot, which is a longtime favorite among marketers, is entering into CRM from exactly the other direction.

Will this create a collision of biblical proportions? Likely not. By having been founded 15 years ago, Salesforce has the disadvantage of being a legacy product (the tired UI is proof of it) but has the undeniable advantage of holding (hostage?) millions of client database entries into its servers for its customers. Any large-scale migration will be a logistical nightmare for any Salesforce customer.

Although HubSpot’s CRM might steal market share away from Salesforce’s less lucrative small customers, it’s addressing a different crowd. New market entrants (almost any new hot startup or technology company eager to jump into the growth hacking band-wagon) or any company previously deterred by Salesforce’s pricing will be its most obvious customers.

Knowing that SME sales forces vastly outnumber Salesforce’s Fortune 500 customers, the addressable market for HubSpot CRM is clearly enticing.

The CRM market is, however, becoming a very dynamic one and thus the future will be difficult to predict. Having witnessed the dwindling number of VP of sales holding to their good-old BlackBerries, HubSpot’s entry into the Salesforce backyard will not go unnoticed.