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Acquisitions help bolster Salesforce revenue

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November 20
12:11 AM 2013

Acquisitions aided Salesforce.com Inc in boosting sales of its marketing tools. In a statement, the biggest maker of customer-management software said that its third quarter revenues increased 35% compared to year-earlier figures to reach USD 1.08 billion. This exceeded the USD 1.05 billion estimates given by analysts. Salesforce also predicted that its sales in the period that will end in January will be in the range of USD 1.12 bill to USD 1.13 billion.

Salesforce spent over USD 3 billion in acquiring marketing software companies, led by Chief Executive Officer Marc Benioff. These purchases included the USD 2.42 billion deal with ExactTarget Inc in July. Since August, Salesforce shares have increased 27%, fueled by the optimism that new products would lead to better revenues and bookings. Salesforce spokesman Andrew Schmitt also said that the firm had also acquired Cloudconnect, an application development startup. It had also partnered with Hewlett-Packard Co to enable the biggest customers of Salesforce to buy more computing power for their software which uses Hewlett-Packard gear.

MKM Partners Analyst Israel Hernandez told Bloomberg that the outlook is good for Salesforce. He added,"The stock has had a massive run this quarter and expectations were running hot through this week because of Dreamforce."

Salesforce is vying with Oracle Corp, Microsoft Corp and SAP AG in the market for technology that enables businesses to manage their customers. It is currently a USD 20.7 billion market, Bloomberg reported.

Benioff said Salesforce will not be making more acquisitions for the meantime. In a press conference, Benioff said it will be concentrating to certain industries to increase its market share. He said, "We've really been tempering our desire to acquire."

Meanwhile, Salesforce also recently unveiled Salesforce1, a mobile software that allows for easy customization of the company's services in mobile devices like tablets and smartphones. Benioff is hoping that Salesforce 1 will be more successful than its predecessor Salesforce Touch.

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