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Open Sesame – Can Alibaba Open the Door of Chinese Market for Salesforce?

by Olive Huang  |  July 25, 2019  |  1 Comment

Today Salesforce announced a strategic partnership with Alibaba.

Very little was said in the announcement. Two things I think are quite important – The partnership includes Salesforce running Sales Cloud, Service Cloud, Commerce Cloud, and Salesforce Platform on Ali cloud instances in China. The partnership also includes Salesforce will become the exclusive enterprise CRM product suite sold by Alibaba.

China put in place its first cybersecurity law on 1 June 2017, followed by issuing various implementation rules. The law has a broad scope ranging from data residency and privacy to security organization and practice. In general, the law requires that data created or collected for business activities in China should be stored in mainland China, especially personal and critical information. Copies of the data could be transmitted to offshore locations however business cases for doing so needed to be reviewed and the mechanism to protect the transmitted data has to be assessed as well.

The supporting implementation standards and guidelines of this law are fast moving and they created a great deal of uncertainty for organizations operating in China – particularly for many multinational companies – in terms how to get compliant and at the same time support one of their most important overseas markets. Gartner estimates by 2021, 80% of enterprises that sell products/services in China will need to engage or partner with consulting or local Chinese security firms to manage risk, security and privacy (for more details, read Gartner Research Address Chinese Cybersecurity Law With This Playbook. Gartner membership required).

Salesforce’s partnership with Alibaba is another example of international cloud vendors finding solutions to offer privacy-compliant software services to serve their customers in China.  The exact date of the availability of the services was not announced by Salesforce nor Alibaba. Also what is yet to be disclosed is the exact details of Salesforce and Alibaba’s collaboration and partnership model, i.e. how would they work together.

For multinational organizations who have Salesforce users in China, what remains important is to understand the status of privacy-compliance of the solution, the migration support from Salesforce and the available resources in China from Salesforce partner ecosystems to support the migration.  Similar as GDPR, for an end user organization, vendor solution  compliance doesn’t mean the job is done, it is only one of the boxes ticked. I would encourage Gartner clients to discuss best practices with our CRM, privacy and security analysts who are familiar with this matter.

The strategic partnership between the largest CRM vendor in the world and the largest digital commerce ecosystem and IaaS player in China surely leaves space for additional imagination. The synergy that these two providers can create may at the same time introduce a competitive environment amongst themselves. This will be a delicate matter between the parties. In the world of digital dragons (Read Gartner research Winning in a World of Digital Dragons. Gartner membership required.), “frendenemy” is common. Can Alibaba cast a magic spell to open the door of Chinese market for Salesforce? Time will tell and surely the story won’t be a boring one.


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Category: crm-software-industry  crm-strategy-and-customer-experience  crm-strategy-and-customer-experience-for-technical-professionals  digital-commerce-technologies  

Olive Huang
Research Director
1 years at Gartner
16 years IT Industry

Olive Huang is a Research Director in Gartner Research and is part of the company's CRM software research team. Her research area focuses on customer services and support, contact centers, CRM vendors and service providers, and CRM strategy and best practices in the Asia/Pacific region. Read Full Bio

Thoughts on Open Sesame – Can Alibaba Open the Door of Chinese Market for Salesforce?

  1. Frances Zhao-Perez says:

    Time will tell and surely the story will not be a boring one. Really like your blog. The details on privacy-compliant hits the point.

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