uploads/2016/05/salesforce-economy1.png

Is Salesforce Changing Its Business Strategy?

By

Updated

Salesforce’s “notable shift” strategy

Earlier in this series, we discussed Salesforce’s (CRM) fiscal 1Q17 results and the company’s growing relationship with Amazon (AMZN). In early May 2016, a Wall Street Journal report stated that Salesforce is developing its IoT (Internet of Things) Cloud on Amazon’s AWS (Amazon Web Services). Salesforce announced its planned IoT Cloud in September 2015, which was newsworthy as Salesforce usually runs its offerings and services on hardware that it operates in its own data centers by using Oracle’s (ORCL) database and other software.

Piper Jaffray analyst Alex Zukin referred to Salesforce IoT Cloud on AWS as a “notable shift” in Salesforce’s strategy, adding that his announcement may mark the onset of a closer relationship between the two players (source: TheStreet).

Article continues below advertisement

Leading players rethink their strategies

Growing competition in the cloud space has urged players to rethink their strategies and alter them to suit the changing business and customer preference requirements. Microsoft is one such player, and it is pursuing the cloud space aggressively. In 2016, Microsoft (MSFT) let go of its Windows-centric strategy and moved towards supporting Linux. In the words of Mark Russinovich, chief technical officer of Microsoft Azure, “It’s obvious, if we don’t support Linux, we’ll be Windows only and that’s not practical.”

You may want to consider investing in the PowerShares QQQ Trust, Series 1 ETF (QQQ) to gain exposure to Microsoft, which makes up 8.4% of QQQ. Investors who would like exposure to application software could also consider this ETF. Application software makes up ~28.4% of QQQ.

Advertisement

More From Market Realist