Forbes  Aug 24  Comment 
In an age that celebrates manic entrepreneurs, none is more frenetic than Salesforce founder Marc Benioff, whom we consistently rate as America's most innovative CEO. Come along for a wild ride with the billionaire founder as he tries to turn...
Benzinga  Aug 24  Comment 
Jim Cramer said on CNBC's Mad Money that when the food poisoning incident happened to Chipotle Mexican Grill, Inc. (NYSE: CMG), he advised his viewers that it has to pass 18 months before the stock becomes a buy again. That period hasn't passed...
Benzinga  Aug 22  Comment 
Salesforce.com, inc. (NYSE: CRM) is scheduled to announce its second-quarter results on August 31. In the last one-year period, the company has acquired about 10 companies to strengthen its revenue stream. The acquisition of the companies...
Benzinga  Aug 22  Comment 
Bank of America Merrill Lynch analyst Joyce Yang has a Buy rating on Box Inc (NYSE: BOX) shares. The rating comes ahead of the company's scheduled announcement of the second-quarter results on August 31. The analyst believes that pipeline should...
Benzinga  Aug 22  Comment 
How does salesforce.com, inc. (NYSE: CRM)'s business stack up to the much larger Oracle Corporation (NYSE: ORCL)? According to Global Equities Research's Trip Chowdhry, salesforce is in an "uncomfortable position" compared to its peer, as it is...
Benzinga  Aug 22  Comment 
On August 22, salesforce.com, inc. (NYSE: CRM) announced the acquisition of privately held business analytics solution provider, BeyondCore. BTIG’s Joel P. Fishbein, Jr. maintains a Buy rating on salesforce.com, with a price target of...
Wall Street Journal  Aug 19  Comment 
Surge of M&A deals, with a pricey attempt at LinkedIn, sparks worries that cloud company’s growth is slowing.
Benzinga  Aug 16  Comment 
Patrick Walravens of JMP maintained a Market Perform rating on salesforce.com, inc. (NYSE: CRM) with an unchanged $92 price target ahead of the company's Q2 earnings print on August 31. Walravens is expecting Salesforce's year-over-year...


Salesforce.com provides enterprise cloud computing applications such as customer and collaboration relationship management (CRM) to businesses of various sizes and industries.[1] By providing subscription-based CRM applications to record, track, manage, and analyze data concerning sales, customer service and support, and marketing operations, Salesforce.com's CRM applications provide customers the ability to build these systems without investing in new software, hardware, and other infrastructure.[2] Salesforce.com's main products and services include CRM applications, the Force.com, AppExchange, and related consulting and maintenance services. Salesforce.com has over 92,000 customers worldwide and derives more than 30% of its revenue from overseas sales. While providing a potential less expensive platform, Salesforce.com faces heavy competition from large business customers who have greater resources and entrenched customer relationships with larger businesses.[3] As these businesses compete for cost conscience customers , profit margins continued to remain depressed.[4]

Business Growth

Through the acquisitions of InStranet in 2008 and Jigsaw in 2010, Salesforce.com has increased its offerings of software-as-a-service, or SaaS, and expanded into adjacent markets.[5] Salesforce.com has developed business applications beyond CRM applications that are designed to attract larger businesses as well.[6]

Trends and Forces

High-degree of competition threatens Salesforce.com's market share and profitability

With greater resources and established relationships with large business customers, large enterprise software companies like SAP and Oracle (ORCL) are a significant threat to Salesforce.com's ability to grow into new markets.[7] In addition, these companies have the ability to develop large research and development facilities, which put pressure on Salesforce.com to develop and market new products and services. In response, Salesforce.com has expanded its product lines through key acquisitions in 2008 and 2010.[8]

Salesforce.com's cloud-based platforms also face competition from cloud-computing rivals like Google (GOOG) and Microsoft (MSFT) as well as from open-source alternatives like SugarCRM.[9] These companies are market similar platforms to those marketed by Salesforce.com that have similar price-advantages that attracted small and medium-sized businesses to Salesforce.com.[10]

Salesforce.com declining 2011 profitability margins partially reflect increased competition in the CRM space as software providers compete for cost-sensitive contracts.[11] In addition, many of Salesforce.com's SaaS competitors have the potential of taking away clients and revenue from the Company.[12]

Salesforce.com needs growth to keep pace with high customer acquisition costs

Salesforce.com's marketing expenses represent almost half of the Company's revenue. While marketing expense represent one type of cost, it illustrates how critical scale is to the Company's profitability.[13] Compared to those of its competitors SAP AG (SAP) and Oracle (ORCL), Salesforce.com operating margins are below industry average.[14] With larger deals, Salesforce.com lowers its customer acquisition costs. In response, Salesforce.com has launched products designed to increase investment in the Company's services. Force.com and Chatter Cloud both represent newly-launched products designed to attract customers to a "suite" of Salesforce.com offerings.[15]


Within the CRM-space, Salesforce.com's competitors offer open-source, SaaS, and traditional software solutions.[16] Competition is high,which has led to relatively diminished margins for Salesforces.com. Its key competitors include:

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