Salesforce.com & Their Competitive Acquisition
When Salesforce.com (NYSE: CRM) crossed the 20-billion-dollar revenue mark last year it also came with an announcement that they would acquire Slack (NYSE: WORK) the enterprise communication application. As per Mark Benioff this is a match made in heaven. With the current work from home environment going to continue for the foreseeable future, the need of a futuristic communicator for enterprise needs is going to be there for a long time. With the acquisition of Slack, the CRM Powerhouse now competes with the likes of Microsoft in the enterprise application arena. Microsoft’s Team is a key competitor for Slack and both are eyeing to integrate with as many enterprise software as possible.
With the recent acquisition Salesforce has made it abundantly clear of its intentions to be one of the leading players in the enterprise software as a service space. This San Francisco based; cloud-based software company has been the mainstay of many Fortune 500 companies by providing state of the art technology solution for their Customer Relationship Management (CRM) service. It also provides enterprise applications for marketing automation, analytics, and application development. Also, Salesforce has introduced Force.com which is a Platform as a Service (PaaS) which allows add on applications which integrates with the main Salesforce.com application.
Discovering Value in CRM
With a decent profit margin of 12% Salesforce.com is one of the leading technology companies which is going to benefit from the digitalization of the enterprise space. In the last 5 years the revenue has grown exponentially from almost 10 billion dollars to 20 billion dollars. With a total cash of more than 12 billion the company is well placed to sustain the short-term shocks of the macroeconomic disturbances.
With the current ratio of 1.14 it has decent short-term financial position. In the last 6 quarters the company has positively surprised the analyst expectations. The revenue is expected to increase by around 22% in 2021 and approximately 44% in 2022. The company is projected to have around 17% annual revenue increase in the next 5 years. Considering the strong financial position and Salesforce’s leadership in enterprise software the outlook looks positive for short term and medium-term investors.