Scalper1 News
Nothing quite like a BPA — blanket purchase agreement — from the federal government to pick up your Wednesday. So on Thursday morning, investors in enterprise software developer Salesforce.com ( CRM ) didn’t seem overly impressed with IBM ‘s ( IBM ) vote of confidence in Salesforce by buying a loyal Salesforce business partner. After riding Salesforce stock up 2.8% to 74.30 on the BPA announcement Wednesday, sellers let the stock ease back a fraction, as of early afternoon in the stock market today , to near 74 — still only 11% off a record high of 82.90 set Nov. 19. “While neither announcement is necessarily ‘needle moving’ on its own, we believe the combination helps to support our long-term view that CRM is becoming an increasingly strategic partner to its customers, driving ‘stickier’ relationships and larger deal sizes,” Evercore ISI analyst Kirk Materne said in a Thursday research note. IBM confirmed Thursday it will buy New York City-based Bluewolf, Salesforce’s first consulting service partner in 2001, now with 500 employees and 12 global offices. It’s still one of Salesforce’s top cloud implementation services. Terms were not disclosed. The leader in customer relationship management software, Salesforce is one of the highest-rated enterprise software companies. IBM stock was up 2.5%, near 152.50, in afternoon trading Thursday. “I’m so proud of Eric, who built Bluewolf from a startup,” said Salesforce CEO Marc Benioff in IBM’s announcement, referring to Eric Berridge, CEO of Bluewolf. Bluewolf will join IBM Global Business Services’ Interactive Experience (iX) practice “to form a deeper consulting capability for clients adopting the innovative Salesforce solutions,” IBM said. Salesforce Notches Big Federal Contract Salesforce on Wednesday said the federal Health and Human Services Department’s BPA was worth $100 million. “HHS operating staff and divisions can purchase Salesforce through a central purchasing vehicle to help digitally transform and connect with their citizens in new ways,” Salesforce said in its announcement. The $100 million pact is equivalent to about 1.5% of Salesforce’s $6.67 billion in annual sales. In December, Salesforce announced it had landed a $503 million BPA from the federal General Services Administration. Evercore ISI maintains a buy rating on Salesforce.com, with a 95 price target. “We believe the continued roll-up of systems integrators specializing in Salesforce deployments is a positive sign in terms of the demand for the company’s solutions among larger enterprises, while the government contracts highlight the continued success of CRM’s vertically focused go-to-market strategy,” Evercore ISI’s Materne said. “All in all, we continue to believe that the long-term narrative based on (about) 20% top line growth, 100-200 (basis points) of annual operating margin expansion, and mid-20% (operating cash flow) growth remains intact and continue to see a compelling risk/reward when looking out over the next 12 months.” Scalper1 News
Scalper1 News