Salesforce CRM has been benefiting from the strong adoption of its cloud-based products and solutions as customers are undergoing a major digital transformation amid the ongoing hybrid work environment. Moreover, the cloud-based customer relationship management (CRM) software provider’s sustained focus on acquisitions and partnerships is helping it enhance its product offerings and expand across newer markets.
Accelerated Digitalization Driving Salesforce’s Software Demand
The accelerated digital transformation amid the pandemic-induced growing hybrid working trend is spurring demand for Salesforce’s cloud-based solutions. Its ability to provide an integrated solution for customers’ business problems is the key driver.
Salesforce’s focus on introducing more aligned products per customer needs is driving its top line. The firm’s products, like Trailhead and myTrailhead, are helping companies through their transformation processes and increasing business scale with modern technology.
We believe that accelerated digital transformation will consistently open a huge growth opportunity for Salesforce. As enterprises progress with digital transformation efforts, the use of cloud services is expected to significantly shoot up in the upcoming period.
Per Gartner estimates, the spending on public cloud services will grow 20.4% to $494.7 billion in 2022 from $410.9 billion in 2021. Per a Grand View Research report, the global CRM software market is projected to witness a CAGR of 13.3% during the 2022-2030 period. With its SaaS-based CRM and social enterprise applications, we believe Salesforce is well-positioned to lead the market.
Acquisitions Expanding Portfolio & Market Reach
Salesforce has been strengthening its core competencies by pursuing strategic collaborations and acquisitions. The buyouts of Slack, Tableau, ClickSoftware, Mulesoft, Datorama and CloudCraze over the last couple of years have been significantly beneficial for the company.
The Slack acquisition has enhanced Salesforce’s team collaboration software capabilities and added several global customers. Apart from this, the buyout is helping the company better compete with Microsoft MSFT, which is growing as a chief rival with its Dynamics CRM apps.
The acquisition of Tableau is in sync with the company’s strategy to diversify beyond customer relationship management and provide more data insights to clients.
The acquisition of the tech startup — Vlocity — has helped Salesforce enhance its capabilities and expand its customer base across the communications, media, healthcare, energy, insurance and financial services and entertainment industries.
We believe that Salesforce’s sustained focus on expanding its business through strategic acquisitions and investments will fuel growth in the long run.
Expanding Globally Through Partnerships
Salesforce's partnership agreements with the likes of Alphabet GOOGL and Amazon AMZN for the firms’ cloud services have been helping it expand its international operations. The company has also entered into an alliance with Apple through which it is offering new apps for iPhones and iPads.
Salesforce has also expanded its global strategic alliance with Amazon Web Services (“AWS”) to focus on new product integrations that will simplify secure data sharing and synchronizing across the AWS and Salesforce services.
Per the partnership agreement between Salesforce and Alphabet’s Google, the latter offers its G suite licenses to the former’s eligible customers for free for up to a year. The collaboration also integrates Salesforce with Google Analytics, thereby allowing customers to connect sales, marketing and advertising data across both platforms.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
Salesforce Inc. (CRM) : Free Stock Analysis Report
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research