Salesforce.com Enters the ERP Market with Infor
Salesforce.com (NYSE:CRM) is the biggest player in the cloud based, on-demand customer relationship management (CRM) market, but it hasn’t released any major enterprise resource planning (ERP) offering yet. ERP applications facilitate the flow of information between all the major business functions of a company like sales, manufacturing, accounting, etc., making it easier to run the entire company. There are some ERP applications available on AppExchange for the Force.com platform, but none of those have been made by Salesforce.com. SAP (NYSE:SAP), Oracle (NASDAQ:ORCL), Microsoft (NASDAQ:MSFT) and Infor are the major players in the ERP segment. ERP is a very lucrative segment, which is seeing a shift to on-demand applications.
At the Dreamforce 2011 conference, Salesforce.com announced that it will partner with Infor to roll out ERP applications on its Force.com platform. [1] It also announced that it will be investing in Infor. With its ERP offerings, Salesforce.com can not only gain additional revenue by selling subscriptions for the Force.com platform which is used to run cloud apps, but also make money by selling the ERP products by Infor on AppExchange.
We currently have a $124 Trefis price estimate for Salesforce.com, which is almost equal to the market price. Cloud based CRM products account for almost 56% of its Trefis price estimate while cloud based non CRM products account for about 36%.
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With Infor, Salesforce.com Indirectly enters the ERP Market
Infor will be launching three new ERP products on Force.com bundled under the InForce brand.
- InForce Everywhere – This application will enable Salesforce.com CRM users to view information like transaction and customer data from Infor’s ERP apps.
- InForce Order Management – This application will provide order, quote and proposal management capabilities to Salesforce.com CRM users.
- InForce Marketing – This will be a marketing automation application integrated Salesforce.com CRM.
While Infor will sell Salesforce.com’s cloud CRM applications, Salesforce.com will promote Infor’s ERP applications, exploiting the lucrative cross-selling opportunities available to both of them. Infor is currently the third largest ERP vendor after SAP and Oracle. Together, Salesforce.com and Infor will be able to offer a complete suite of CRM and ERP products and compete with SAP, Oracle and Microsoft.
We expect this collaboration to be very beneficial to both Salesforce.com and Infor. It will help Salesforce.com gain additional revenues from the Force.com platform as well as from its core CRM product due to cross-selling by Infor.
Check out our complete price analysis for Salesforce.com
Notes:- Salesforce.com gets into ERP with Infor, Infoworld [↩]