Tags: Salesforce.com | social | revolution | CRM

Salesforce.com Aims for Social Business Revolution

By    |   Tuesday, 08 May 2012 05:44 PM

Salesforce.com (CRM), an online provider of customer relationship management (CRM) software, aims out to launch nothing less than a social revolution on the business side of the web, a daunting strategy but one that fits well with its low-cost cloud computing focus.

Salesforce.com provides CRM software over the web at the enterprise level to companies of nearly any size. The company offers high-level CRM functionality once only available to the largest corporations by taking advantage of the power of the Internet.

Salesforce.com focuses on cloud versions of software that promote sales, customer service, sales-oriented social networking, and social media monitoring. “Our objective is to help companies put customers and employees at the center of their businesses and transform themselves into social enterprises by the use of our applications and platforms,” CRM management told investors in a recent filing.

“Not only do we want to be the leading provider of the social enterprise solution, we also want to offer additional social applications and have the leading cloud computing platforms upon which our customers and partners build applications.”

The company has a market cap of $20.80 billion in a sector, software, where the average company size is $12.55 billion. Its projected earnings per share growth for the coming year is 29.19 percent, higher than the sector average at 14.12 percent.

Significant competition

Analysts are broadly positive on Salesforce.com. Buy or outperform calls are in from Raymond James, Needham & Co., Deutsche Bank, Morgan Keegan & Co., Goldman Sachs, RBC Capital Markets, Friedman, Billings, Ramsey & Co., Piper Jaffray, Citigroup, Jefferies and Morgan Stanley.

Standard & Poor’s, however, rates the stock a sell. "CRM has risen 56 percent YTD, and is valued at what we view as unsustainable P/E and P/E-to-growth multiples,” S&P analysts wrote on April 28, moving the share to strong sell from sell.

“We acknowledge its growth profile and opportunities, but note investments to ramp new customer deployments, and introduce and acquire new products and offerings is substantial. We also see significant competition from large companies and startups.”

Salesforces.com next reports on May 17.

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Tuesday, 08 May 2012 05:44 PM
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