The traditional gap between sales and marketing may have closed significantly late last month, as customer relationship management company Salesforce.com announced its pending acquisition of database information provider Jigsaw Data Corp.
The ramifications will sort themselves out after the close of the $142 million all-cash deal, expected this summer. In the meantime, Salesforce, whose cloud-based applications enable sales reps to rate and nurture leads, said it now intends to become a player in the b2b database arena via the acquisition.
“We see a new growth opportunity in the $3 billion b2b data services industry,” said George Hu, Salesforce exec VP-marketing and alliances, in a conference call announcing the deal. “By delivering a fully integrated application and data solution, we believe we will be well-positioned to capture a growing piece of this business.”
Hu said the traditional divide between data and applications like Salesforce has “been incredibly painful for companies. We look forward to making this experience seamless.”
The marketing database industry, meanwhile, tended to accept the announcement as an affirmation of the power of business information.
“It is a statement by Salesforce that companies' contact databases are, in general, not strong, and that third-party data is critical as part of the core foundation of one's customer database,” said Jay Schwedelson, president-CEO of list management company Worldata.
While Schwedelson didn't see the move as a business threat—”Jigsaw is a data provider like many others in the space, and I don't see this acquisition changing that significantly,” he said—he views the deal as validating the Jigsaw “crowd-sourcing” model of assembling data.
“It certainly gives a stamp of credibility to the methodology,” Schwedelson said. “This has been an area of debate that will likely no longer be as contentious.”
Jigsaw's database of some 21 million business contacts at about 4 million companies has been built by members in a Wikipedia-style collaborative manner, through the exchange of business information. By adding and updating contact information, members can access other contacts. Jigsaw also provides company access to its database on a monthly per-seat cost basis, and through its Jigsaw Data Fusion product maintains data hygiene for its corporate clients.
Jigsaw's method of list building contrasts with other marketing database methodologies, such as magazine subscriber lists, lists assembled by editors and researchers, and Internet “scrubbing” of online names and contact information. Acknowledging the power of the crowd-sourcing model, other database companies such as Demandbase Inc., Dun & Bradstreet and Harte-Hanks have liaised with Jigsaw to augment their own databases.
Jim Fowler, Jigsaw founder and CEO, said the acquisition of his company will have little immediate impact on its day-to-day operations.
“The Jigsaw database is a separate entity, and there will be no integration or sharing of that data with Salesforce,” he said. “No doubt Jigsaw will be very tightly integrated with Salesforce, and that in itself will be a competitive advantage for them—but no more than for anyone else willing to work with Jigsaw.”
Stressing that independence, Fowler said Jigsaw currently has a deal to move data into Oracle's CRM application and this year plans to announce Data Fusion deals with both Oracle and Microsoft Dynamics CRM.
A Jigsaw competitor downplayed the deal, as well as Jigsaw's method of building its database.
“We like crowd sourcing because it gains a lot of scale, but there is more than one method,” said Sam Zales, president of database company ZoomInfo. Zales said his company's model, using a combination of Web scrubbing, member updates of their own contact information and contact swapping, is superior.
ZoomInfo has its own CRM relationship with Salesforce, as well as data integration deals with Microsoft Dynamics CRM and Sugar CRM. And this month the company expects to announce a similar partnership with Oracle CRM on Demand.
How the Salesforce-Jigsaw deal will affect marketers is yet to be determined.
“A challenge will be with larger companies with lots of salespeople,” said Chris Golec, CEO of Demandbase. “If these people update their [Jigsaw-provided] data in Salesforce, would these updates become widely available to others?”
Fowler responded that users who are willing to share their updated data with the universe of Jigsaw users are charged a discounted subscription fee of $79 per seat per month, compared with the usual $99 fee. Neither subscription arrangement currently is dependent on the new Salesforce deal, he said.
Ruth P. Stevens, president of b2b marketing consultancy eMarketing Strategy, also expressed concern about possible Salesforce control of the Jigsaw database.
“Jigsaw is a huge asset to the b2b marketing community, and I would be concerned if that were constrained in any way,” she said. “My question is, will Salesforce require that you be a Salesforce subscriber in order to gain access to Jigsaw data?”
Fowler's answer: “Hell, no.”
“Salesforce completely understands that this is a crowd-sourced model and the more you restrict it, the less value it has,” he said.
Hu compared the combination of Salesforce and Jigsaw with the Apple iPod's integration with the iTunes online store. The Jigsaw acquisition, he said, “will create a market for all kinds of data to power all kinds of applications.” M