Tag Archives: crm

Salesforce.com Gets A Nod From IBM, Investors Like Fed Deal More

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.”

Zendesk Attracting Larger Customers For Its Business Software

When you’re “a small player in a large market that is still new, fragmented and growing,” a key to success is “staying one step ahead of the competition,” and that’s what workplace software developer Zendesk ( ZEN ) is doing, said Summit Research analyst Jonathan Kees. Following the upbeat commentary in Kees’ research note, issued Sunday, Zendesk stock was up a fraction in early afternoon trading in the stock market today , but it’s still more than 25% below a 17-month high at 27.52, touched Dec. 4. Like other players in the infamous Software Sag of 2016, Zendesk fell hard in January and early February, hitting a 21-month low of 14.39 low on Feb. 9. Zendesk, which specializes in customer relationship management (CRM) software, went public in May 2014, priced at 9. Initiating coverage, Summit Research gave Zendesk a buy rating with a 25 price target. Zendesk is “executing on its growth strategy in a largely untapped $7.6 billion market, moving successfully toward positive (free cash flow) and profitability, and maintaining revenue growth in the 30%-plus (rate) over the next several years,” Kees said. “Most of Zendesk’s customers are SMBs (small to medium-size businesses), though the company has been moving upmarket, with customer deals with more than 100 seats now almost a third of monthly recurring revenues. Among other benefits, larger customers buy more, tend to purchase annual contracts and raise overall ARPU (average revenue per user). Founded in 2007, Zendesk is the oldest of the vendors targeting SMBs.” Big rivals such as  Microsoft ( MSFT ),   Salesforce.com ( CRM ) and Oracle ( ORCL ) also target midsize businesses. Shares of all three were down a fraction Monday afternoon. “As ZEN moves upmarket, (it) faces deep-pocketed competitors like Salesforce.com and Oracle that can easily bundle customer engagement functionality with their total offerings,” Kees warned. Zendesk is targeting positive free cash flow by 2017, profitability by 2020 and $1 billion in sales by 2020, he noted. For its Q1 ending Thursday, 12 analysts surveyed by Thomson Reuters expect a consensus 10-cent loss, flat with a year ago, on revenue up 56% to $66 million. Zendesk CFO Alan Black is expected to leave this year. Kees said, “We are always a little cautious and little worried when a CFO leaves a company. However, we are cautiously optimistic Zendesk will take appropriate steps to identify a CFO who can take the company to the next level ($1 billion in revenue by 2020).”

Adobe Driving Third Wave Of Enterprise Software Disruption

Digital media software giant Adobe Systems ( ADBE ) is well-positioned to drive the third wave of disruption in enterprise software, Rosenblatt Securities analyst Kirk Adams said in a report Monday. The first software wave was enterprise resource planning (ERP), which transformed back-office operations. Then came customer relationship management (CRM), which changed front-office operations. Adobe is calling the third wave “experience business,” which aims to reinvent how companies create, deliver and market products and services. “Adobe believes that this third wave could be bigger than both ERP and CRM,” Adams said. He reiterated his buy rating on Adobe stock and price target of 112. Adobe was down a fraction to above 92 in midday trading on the stock market today . Its stock hit an all-time high of 98 on March 18, a day after it reported better-than-expected first-quarter earnings and raised its guidance. Adobe outlined how it is pursuing experience business last week at its Adobe Summit 2016 conference in Las Vegas. This year’s conference drew 10,000 attendees, up from about 7,000 at last year’s show. “Adobe is focused on helping enterprises deliver consistent, high-quality experiences for their customers,” Adams said. “There are many point products and solutions from other companies, but only Adobe provides end-to-end solutions from content creation to marketing execution to measurement.” Adobe is the leader in digital content creation with its Creative Cloud offerings. Now it is moving aggressively into the marketing world with its Marketing Cloud, Adams said. Marketing Cloud includes tools for tracking the popularity of online content and the effectiveness of advertising and marketing campaigns. At its Summit conference, Adobe announced an audience measurement partnership with ComScore ( SCOR ) as well as new services and enhancements to its cloud platforms. “The Summit reinforced our view that Adobe continues to distance itself from competing digital marketing platforms,” Baird analyst Steven Ashley said in a report Wednesday. He rates Adobe stock as outperform with a price target of 105. Image provided by Shutterstock .