Biden's pick of Rhode Island Governor Gina Raimondo for Secretary of Commerce could be good news for Salesforce and other software companies, analysts say

• Biden's pick for Commerce Sectary, Rhode Island Governor Gina Raimondo, brings a close partner of Salesforce and its CEO Marc Benioff into the new administration.
• Early on in the pandemic, Raimondo called Salesforce to help with its pandemic response. What Salesforce built eventually became its Work.com platform for contact tracing and vaccine distribution.
• Raimondo's partnerships with software companies are a good sign the importance of IT modernization to the new administration and the role software will play, analysts said.
• As for Salesforce, analysts say its government business and overall relationship with the new federal government could benefit as a result. 
• Salesforce has steadily been putting more focus on its government business. In December, it quietly acquired Acumen Solutions — a Virginia-based consulting firm that counts the US Army, State Department, and Department of Homeland Security as customers.
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President-elect Joe Biden has picked Rhode Island Governor Gina Raimondo for Secretary of Commerce, the Biden-Harris transition team said in a statement Friday morning.

Raimondo has served as governor of Rhode Island since 2015. Before that, she was a venture capitalist and investor in startups including Nest (acquired by Google), Expensify, and Evergage (acquired by Salesforce).

But it's Raimondo's close partnership with Salesforce and its CEO Marc Benioff that have caught the eye of some observers, saying that it speaks well of her understanding of the tech space, while also giving the cloud software giant a powerful ally in the federal government.

"Her appointment as Commerce Secretary will certainly provide a forward-thinking leader to the office that sees the power of technology to solve complex business and economic challenges," said Futurum Research analyst Dan Newman.

Salesforce's government business and overall relationship with the new White House administration — a priority for the company as it looks to hit Benioff's goal of $50 billion in annual revenue by 2025 — could benefit as a result of their ties, too, analysts suggest.

"Certainly having connections in high places does not hurt," said Valoir analyst Rebecca Wettemann. "I think given Salesforce's continued investment in industries, including government, and they have both the capabilities and, certainly with Raimondo, the network, to be significant in that space."

Raimondo and Benioff first met in April, when she approached Salesforce for assistance with Rhode Island's pandemic response. Ultimately, she convinced Benioff that Salesforce should build the state a contact-tracing app to help contain the spread of the virus. That app eventually became Work.com, a platform that Salesforce is selling to numerous customers in the public sector to help manage contact tracing, vaccine distribution, and the like.

"She's a tremendous visionary," Benioff said of Raimondo at Salesforce's annual Dreamforce conference in December. 

In July, Rhode Island partnered with Salesforce, Microsoft and others on a $45 million investment on an initiative using CARES act funding to retrain thousands of displaced workers with tech skills. Companies participating will pledge to open opportunities to Rhode Island residents. Salesforce is also partnering with Rhode Island Community College to bring Trailhead, the company's free tech skills training platform, into its curriculum.

In her new role as Secretary of Commerce, Raimondo will ultimately oversee a variety of US offices including the National Weather Service, Patent and Trademark Office, and National Institute of Standards and Technology — a role that will see her address issues ranging from climate change to international trade to technology policy.

Her partnerships with software companies are a good sign of how she'll solve problems while in office, analysts said.

Salesforce has been increasing its focus on government 

Salesforce has steadily been putting more focus on selling cloud tools for specific industries, with the government sector a clear priority for the company. In December, Salesforce quietly acquired Acumen Solutions — a Virginia-based consulting firm that counts the US Army, State Department, and Department of Homeland Security as customers.

In the shadow of its $27.7 billion deal to acquire Slack, this acquisition didn't get as much attention but is key to the cloud giant's strategy as it builds its momentum in the public sector, Casey Coleman, a senior vice president for digital transformation in the company's global public sector group, told Insider's Belle Lin last month. Coleman said the deal will help it move faster in serving government customers because Acumen brings "deep Salesforce knowledge" to the company's professional services division. 

That comes as there's signs that the federal government's IT modernization efforts will increase under the new Biden-Harris administration. Salesforce is vying for a piece of that pie, and seems to have both the experience and credibility to net such deals, analysts said. 

Over the last year, Salesforce has built credibility with public agencies and state governments with its Work.com tools for reopening. "What we saw with Salesforce was the ability to really quickly help, not just existing customers, but new customers in the government sector move very quickly," Wettemann said. 

Federal government is a huge opportunity for software companies, and overall government-wide spending on IT has grown nearly every year, with $90.9 billion expected for fiscal year 2021, Business Insider previously reported.

With Raimondo, the administration is gaining someone who "understands the value of SaaS. She understands the value of technology," said Baird analyst Rob Oliver. "Salesforce has a presence in Fed and that presence is certainly not hurt at all by having one of their best customers, who was able to get up and running really, really quickly during a pandemic on new technology in the department of commerce."

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