Salesforce.com Model Metrics Deal Helps Enterprises Become Social and Mobile
Salesforce.com (NYSE:CRM) is one of the most important players in the on-demand, cloud based enterprise software market, in which it competes with Oracle (NASDAQ:ORCL), SAP (NYSE:SAP) and Microsoft (NASDAQ:MSFT). It announced that it has acquired Model Metrics, a cloud computing consulting and services company which helps enterprises adopt and migrate to cloud based solutions and has a special focus on mobile and social technologies. [1] It has already completed more than 1000 Salesforce.com deployments for its existing customer base, which is helping drive growth. In its earnings revenue grew by nearly 40% in the latest quarter on a year over year basis but the stock is slipping because expenses have jumped as well.
See our earnings note Salesforce.com’s Rising Expenses Keep $120 Lid on Stock
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Cloud based customer service software and other cloud based apps account for more than 90% of Salesforce.com’s $124 Trefis price estimate, which stands nearly 8% below its current market price.
Salesforce.com to Leverage Mobile and Social to Grow in the Cloud Computing Market
Salesforce.com recently launched a new social productivity app – Do.com, and also acquired Assistly, a social customer service startup, to improve its CRM offering.
With the use of smartphones and tablets increasing in the enterprise, mobile is a very crucial area for enterprise software makers. This acquisition will help Salesforce.com add mobile and social expertise to its current offerings.
George Hu, COO, Salesforce.com said:
The addition of Model Metrics’ mobile and social expertise will accelerate Salesforce.com’s ability to lead the shift to the social enterprise and empower partners to develop their social enterprise practice.
Oracle, SAP and Microsoft, are all working on cloud based versions of their traditional offerings, in order to capture a slice of the very lucrative cloud computing market, which is expected to be worth almost $400 billion by 2018. Despite the increased competition, we expect Salesforce.com to increase its share of the rapidly growing cloud computing market either through organic growth, or acquisitions, or both.
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Notes:- Salesforce.com Signs Definitive Agreement to Acquire Model Metrics, Press Release [↩]