Is Salesforce.com a good investment?



CRM launches new products to retain its competitive edge

Salesforce.com (CRM) is considered a pioneer in the cloud software business. As a result of its strong position in the software business, Salesforce.com is considered a good investment. Let’s see why.

CRM’s success is a result of its software-as-a-service (or SaaS) modules and related offerings. As the following chart shows, it led the market. CRM’s software spending and revenues had a 16.1% market share.

It’s followed by SAP AG (SAP). SAP had a 12.8% market share. The other top players were Oracle (ORCL), Microsoft (MSFT), and IBM (IBM).

It continues to launch new products. It’s recent product is “wave.” Wave is CRM’s first move into the $38 billion analytics market. According to the International Data Corporation (or IDC), the public cloud market was worth $57 billion in 2013. It’s expected to be worth $127 billion by 2018.

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Deal wins and diverse cloud offerings generate optimism

In 3Q15, Salesforce.com stated that it signed seven to eight large deals. The increased number of deal wins and the adoption of its diverse cloud offerings generated optimism about the company. The company’s strategic acquisitions and the resulting synergies are expected to remain positive in the future.

To learn more about CRM’s acquisitions, please read “Acquisitions are significant in Salesforce.com’s revenue growth.”

Expanding horizons to tap rapid growth market

Being a leading company in the cloud and SaaS space, Salesforce.com is able to leverage its strengths to solidify its position in the small and medium-sized business (or SMB) space. As discussed earlier in this series, this will help its growth. It will benefit the company and its shareholders in the long run.

4Q15 expectations

For 4Q15, Salesforce.com expects revenue to be $1.436–$1.441 billion. Generally accepted accounting principles (or GAAP) earnings per share (or EPS) and non-GAAP EPS are expected to be $0.09–$0.10 per share and $0.13–$0.14 per share, respectively.

To learn how Salesforce.com fares as an investment, please read “Must-know: Is Salesforce.com a good investment option?


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