Tata Communications announced today that they have partnered with Salesforce (NYSE:CRM). The primary purpose was revealed in a press release that stated that Tata Communications’ IZO™ Private will connect directly to the Salesforce Customer Success Platform.

Neeracha Taychakhoonavudh, SVP, Partner Programs at salesforce.com
Neeracha Taychakhoonavudh, SVP, Partner Programs at salesforce.com

For those Tata customers already supplied by Tata Communications this means that they will be able to connect their private networks directly into the Salesforce data centres.

We spoke to Neeracha Taychakhoonavudh, SVP, Partner Programs at salesforce.com about the announcement, her initial comment was “This particular announcement is with Tata Communications … and this is very much focused on offering our customers who have specific requirements especially in highly regulated industries who are concerned about their data travelling on public internet to give them an opportunity through their communications provider like Tata the ability to essentially private VPN into the Salesforce data centres.

Tata Communications, not the first or last…

This is not the first such partnership for Salesforce of this nature. Last year Salesforce engaged in similar partnerships with both AT&T (Netbond) and Verizon (SCI). Taychakhoonavudh acknowledged that this would not be the last agreement of this nature and said “Yes, We do have a couple more in the hopper, I am not as well versed in the specifics of where we stand but we do want to make sure that we work with the major Telco providers so we have global coverage….we do have some gaps that we are going to address.”

With whom these agreement will be is up for debate. If Salesforce wishes to cover Australia it seems likely that they will reach an agreement with either Telstra or Singtel. It also seems likely that a European operator will also be included within the partner portfolio, though Tata does have a limited network there..

These are not simple partnerships though and they take time to implement. Taychakhoonavudh indicated that the Tata interface would take several months before customers could take advantage of the private networking that is promised by the agreement.

Delivering what customers wants.

Julie Woods-Moss, CMO and CEO of NextGen Business at Tata Communications
Julie Woods-Moss, CMO and CEO of NextGen Business at Tata Communications

Tata Communications have stolen a march on some of their rivals with this deal and Julie Woods-Moss, CMO and CEO of NextGen Business at Tata Communications is clearly excited by the deal, commenting: “Tata Communications’ partnership with Salesforce represents another milestone around IZO™, our cloud enablement platform. Our recent, independent research confirms that organisations are experiencing benefits they didn’t expect from cloud services and realizing competitive advantages from cloud deployments.

“We are committed to creating a global ecosystem that harnesses our extensive global network and enables global organisations to meet the needs of their businesses and drive customer success by adopting the cloud confidently and securely.

Taychakhoonavudh believes that this is less about winning new customers but more about servicing those existing Tata customers who may wish to use Salesforce but are reluctant to committing their data on the public internet. This may be the case, but it is a powerful weapon in Tata’s armoury when they go against other network providers in tenders for Salesforce customers.

Salesforce strategy in Asia

Taychakhoonavudh refused to be drawn on whether the intention of this deal was to increase the revenues from Asia. Salesforce have found Asia tougher than Europe. Growth figures for the last three years have been lower than both Europe and the US and geographical share revenues dropped from 14% to 10% between 2012 and 2015.

Taychakhoonavudh, when asked about this answered the question: “Well I do not know that there is a direct tie but I think it is providing more options. “. She continued, elaborating further: “ In Asia, there is obviously a little bit more of a conservative approach to putting data in the cloud, and it varies country by country. So if you think about Asia, we are taking down each country at a time.”

This country by country approach is sensible and has worked for Salesforce in the past. Taychakhoonavudh gave the example of Thailand, the country of her birth where she has also spent some time working. Thailand can be a hard country to penetrate business wise, Salesforce managed to find a sponsor bank, who handheld the process through the regulator and now Salesforce is used by five Retail banks in Thailand.

Each Asian country has different governance and compliance regulations and each one needs to be approached separately. This agreement with Tata, and in fact the wider agreement with Tata Consulting (TCS) which Taychakhoonavudh was also keen to acknowledge will help in this penetration of Asian markets.

Data Centres

Salesforce takes time to open data centres. The locations in Germany and France are still to open, two years after they were first announced. There are no immediate plans for another data centre in Asia according to Taychakhoonavudh but with the Tata agreement in place one suspects it is closer. Whether this will be another NTT data centre (as Japan and Singapore are) or whether it will be a Tata data centre in India is yet to be seen. No doubt this will depend upon how much growth Salesforce experience in the region over the next few years and where it occurs.

Tata Communications IZO™

News about IZO™ has been subdued since the announcement last year but this latest partnership announcement proves that Tata are providing exactly what customers want. There will be costs in delivering these connections and Tata seem willing to make the investments that others are shying away from. IZO™ now connects to four of the largest cloud platforms, including Salesforce, Amazon Web Services, Microsoft® Azure™ and Google Cloud Platform, and over 50 data centres across the globe.

Customers want connectivity to the cloud and this deal makes sense for both Salesforce and Tata. There is a risk for both companies that the investment will not pay off. For Salesforce this seems unlikely though as one imagines that there are a growing number of telecoms companies wanting this kind of partnership. From talking to Taychakhoonavudh it felt that the restriction was one of internal architectural resource and common sense rather than the lack of suitors. For Tata, that they have beaten several others to this deal will be satisfying.

Partnerships win business

Taychakhoonavudh also alluded to the opening up of wider markets. These private networks open up opportunities for Salesforce to take the company to the next step. She spoke about Salesforce success to date, breaking into the Fortune 500 and in talking about the company revenue explained “…it is still a fraction of the world market and our partners give us the capability for extension.

“It is more choice for customers’, it is more options, as we get larger and the spectrum of clients that we serve both from a segment size, industry, geography perspective just gets wider and wider it is incumbent upon us to find these partnerships  to make sure that when a client has a particular need we have a solution and the solution can’t be just Salesforce in many cases and having those partnerships and investing in those partnerships and keeping that ecosystem very vibrant and successful I think is going to be the key to our future growth and longer term success.”

It will be interesting to see as the dust settles on 2015 who has managed to grab partnerships with whom and which of these new relationships are actually beneficial to both companies. This deal seems to be one of them, although there may be an imbalance between the two sides it seems likely that both will gain an advantage in their respective markets.

This is not the last union between SaaS providers and Telco’s and it will be interesting to see how groups of companies build up over time. IBM already have relationships forged with Telco’s but it will be interesting to see how OBS, DT and BT all vie for Salesforce attention over the next few months.

For Salesforce this is another step in their growth away from being an acquisition target and becoming a company that it just too big to gobble up. Earlier this year Microsoft are rumoured to have failed to meet an appropriate asking price, there are now fewer and fewer companies can could meet the asking price and one suspect that by 2016 there might be none.



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