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International Peripheral Stock - Salesforce

OVERVIEW

Salesforce.com, Inc. is a software-as-a-service vendor that primarily develops customer relationship management, or CRM, products. The firm has a variety of cloud-based tools targeting horizontal markets such as Sales Cloud, to monitor sales leads, Service Cloud, for customer support, Marketing Cloud, to launch digital marketing campaigns, Commerce Cloud, a multitenant e-commerce tool, Quip, its collaboration tools, and the Salesforce Platform, which allows enterprises tobuild applications. Beyond this, Salesforce has various initiatives such as Trailhead, Einstein AI, Lightning, Internet of Things, Heroku, Analytics, AppExchange, and MuleSoft. The firm reports in two segments: subscription revenue and service revenue. Salesforce is the largest pure-play SaaS vendor in the world.

 BULLS SAY

Aggregate CRM spending is expected to outpace other types of application software and SaaS is among the fastest methods for enterprises to cut costs from their IT infrastructure. Salesforce.com remains the largest pure-play SaaS vendor. Salesforce.com has continually expanded its TAM, moving into marketing, commerce, analytics, application development, and the Internet of Things. Secular tailwinds are expected to further propel Salesforce. com, and underlying CRM demand remains robust. The firm’s AI initiatives (Einstein) are starting to manifest.

BEARS SAY

Salesforce.com is expanding into new arenas through acquisitions, such as ExactTarget, Demandware, and MuleSoft, and faces overpayment risk if it continually targets burgeoning startups to continue its top-line growth trend. Resourceful, well-capitalized competitors, such as Microsoft, Oracle, SAP, and Adobe, have continued investing in cloud- serves and new product launches, which could stunt Salesforce.com’s growth and expected margin materialization. Salesforce.com utilized AWS for IaaS and Oracle for databases, limiting the oversights the firm has into its own infrastructure.

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