Salesforce.com Picks Up Tiny Assistly

Sep.22.11 | About: Salesforce.com, Inc. (CRM)

By Brenon Daly

Just several months after putting money into Assistly in its second round of funding, Salesforce.com (NYSE:CRM) decided Wednesday to pick up the whole startup for $50 million. The purchase should help the SaaS giant extend its customer service offering, Service Cloud, to small businesses. Founded in 2009, Assistly had drawn in more than 1,000 customers, although not all of those are paying. (Salesforce.com declined to give a breakdown on paying vs. nonpaying customers, but indicated revenue at the startup was a tiny amount.)

The acquisition marks the third time Salesforce.com has stepped into the M&A market to bolster its customer service product. Three years ago, it reached for InstraNet, a startup that was led by Alex Dayton, who continues in an executive role for the customer service offering at Salesforce.com. A year ago, Salesforce.com quietly added Activa Live. (Although terms weren’t disclosed, we suspect the bill for that purchase probably only ran in the single digits of millions of dollars.) The net result of those acquisitions – along with healthy organic growth – is that Service Cloud is now the largest single product outside Salesforce.com’s core sales force automation product.

Additionally, Salesforce.com says Assistly will be part of its upcoming launch of a "small business cloud" product. In that, Assistly will be joining the collaboration offering that Salesforce.com picked up with its acquisition of SMB-focused startup Manymoon in February. The reason for the new downmarket products is pretty clear when you remember that Salesforce.com gets roughly one-third of its overall revenue from small businesses.