The Technical Reason why Salesforce is buying Steelbrick instead of Apttus

Earlier today, Steelbrick (Steelbrick.com) posted a letter on its website by CEO Godard Abel confirming industry rumors that Salesforce had indeed signed a definitive agreement to buy the remaining shares of Steelbrick that it (Salesforce) does not already own.

This comes as a little bit of a shock to those who watch the CPQ space because Salesforce has, in the recent past made substantial investments in industry leader, Apttus (apttus.com). Today, Apttus leads all others in adoption rates for its CPQ product. Apttus CPQ is the de facto standard for enterprise CPQ implementations. So what justifies the nearly $360 million purchase price that Benioff and team just agreed to spend for Steelbrick?

Most implementers of Salesforce based CPQ products think that the answer lies in the technical synergy between Salesforce and Steelbrick. That is to say that technically Steelbrick integrates into the Salesforce platform much easier (and much more naturally) than does Apttus.

It’s all about the Objects.

While both the Steelbrick CPQ and the Apttus CPQ products are built on Native Salesforce, the two have chosen a fundamentally different technical path. The details of the two products tell the larger story. Within Salesforce, there are approximately 400 interconnected tables called Standard Objects. You get these tables when you first get your Salesforce licenses. These include Objects with names such as “Account” and “Contacts.” In addition to that, the Salesforce platform allows a company’s administrator to define new tables (called Custom Objects in Salesforce lingo) that carry the data that can not be cleanly inserted into one of the Standard Objects. Architecturally, Steelbrick has chosen to leverage and expand upon many of the Standard Objects that Salesforce uses while Apttus has chosen to build it’s own Custom Objects.

So, why should I care?

Most implementation partners have an opinion on Standard vs Custom Objects. On the custom side, Apttus will tell you that their Objects are simply more powerful and better suited to handle the heavy lifting that is CPQ, and that Standard Objects can not be stretched to accommodate the CPQ load. Not so fast,says Steelbrick who has chosen to architect around Salesforce’s Standard Objects. Steelbrick has extended these Standard Objects with Custom Fields to achieve their objectives. In fact, Steelbrick will tell you that the advantage of using Standard Objects allows companies to buy additional products on the App exchange or from Salesforce that expect (for instance) Quotes to be in the Quotes object. Valid point. To further emphasize their point, Steelbrick will point out that Salesforce itself advises that you don’t build Custom Objects unless your task simply can not be accommodated with their out-of-box Objects.

While it will become clear that other deal points are at play in today’s announcement, no doubt integrating Steelbrick into the mainstream of Salesforce’s technical offerings will be much easier than had they tried to do the same thing with Apttus.

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