Salesforce.com growth forecast?
Edy
dollars revenues, can the company continue its meteoric rise - or is
this the time to sell some of that 'CRM' stock?
Therese
to the globally depressed economic environment. However, unlike its
primary on-demand competitors such as NetSuite (which has not grown
over the last 4 quarters), the company continues to achieve
impressive, double digit growth – just not the hyper growth
demonstrated in earlier years. While I expect Salesforce.com to
continue to do very well, the stock (NYSE: CRM) clearly sells at a
premium making the investment upside very questionable. If the company
fails to successfully venture out beyond CRM, or if and when CEO Marc
Benioff retires (which I personally expect will occur in 2010), the
company will find itself at a new crossroads and the stock may become
very volatile – possibly representing a great investment opportunity.
Then there is always the possibility of SFDC being acquired. Earlier
rumors suggested that the company wanted to become acquired by Google
and then Oracle. I don’t see Google getting into the enterprise
software business and Oracle’s Ellison seems to show little interest
in Salesforce.com. The list of additional acquirers is not that long,
making a salesforce.com acquisition seem less likely.
Amy Lee
however, I think the company can compliment its organic growth with
growth by acquisition.
Dennis
salesforce.com has chosen not to emphasize, the company’s
predisposition to acquiring complimentary technologies. In April 2006,
salesforce.com purchased wireless application maker Sendia for $15M in
cash. In reality, the acquisition of that technology was not
successful as Salesforce had to ultimately rewrite the solution as it
was repackaged from AppExchange Mobile to Salesforce Mobile to
Force.com Mobile. The current product bears little resemblance to the
acquired product.
In August 2006, Salesforce.com acquired PPC/adwords integration
startup Kieden for an undisclosed sum. The acquisition of the four
person company resulted in the rebranded Salesforce for Google AdWords
solution.
In January 2007, Salesforce.com acquired CrispyNews also for an
undisclosed sum. In fact this acquisition actually went unannounced
for several months. The acquired technology later became the much
publicized Salesforce.com Ideas social media solution.
In March 2007 the company acquired content management system maker
Koral Technologies, again for an undisclosed sum and without
announcement. The acquisition of this nine person startup and their
AppExchange product culminated in the Salesforce Content solution.
In August 2008, Salesforce.com acquired knowledge management company
InStranet for $31.5M. The on-premise call center software was
converted to the multi-tenant SaaS model and rebranded as the
ServiceCloud2 Knowledge module. InStranet’s founder, Alex Dayon, has
since taken the rains for the company’s customer service and support
operation.
While SFDCs acquisition success is checkered, I suspect the company
has learned along the way and may try to supplement a falling organic
growth with increased acquisition growth.
> > this the time to sell some of that 'CRM' stock?- Hide quoted text -
>
> - Show quoted text -
Amy Lee
growth by acquisition yesterday. The CRM SaaS leader completed a $500M
sale of convertible senior notes due in 2015. As the company has
nearly $1 billion in cash and liquid assets, you have to ask yourself
why they need an extra $500 million. The private placement lists the
use of proceeds as the always quoted 'general corporate purposes', but
also indicates possible investments in or acquisitions of
complementary businesses, joint ventures, services or technologies. I
suspect as salesforce.com stock (NYSE:CRM) is trading at 80 times
earnings, the company is concerned that acquisition candidates may not
want stock-heavy deals as the stock may be far more likely to fall
than rise - and therefore will need large cash components to make
acquisition deals happen.
On Nov 29 2009, 9:06 pm, Edy <edy.he...@gmail.com> wrote: