What’s on Salesforce.com’s shopping list?

Salesforce.com’s move this week to raise US$500 million through a debt offering has observers speculating the on-demand CRM (customer relationship management) vendor is set to go on a shopping spree, but opinions vary on exactly what one will entail.

There’s been a lot of buzz that Salesforce.com will buy Constant Contact, which makes e-mail marketing software for small businesses, said 451 Group analyst China Martens. 

Constant Contact’s current market capitalization is close to $500 million. With 300,000 customers, Constant Contact could shore up Salesforce.com’s standing in the small business arena, where it is under assault from a variety of competitors. And a combined offering could present a “nice little suite of stuff” for those users, Martens said. 

Meanwhile, other speculation has Salesforce.com buying an HCM (human capital management) vendor such as Taleo or SuccessFactors, “but again, these are big companies,” she said. SuccessFactors’ market capitalization was roughly $1.3 billion as of Wednesday, and Taleo’s stood at around $740 million.

SaaS (software as a service) consultant Bob Warfield sees a pair of potential scenarios. 

Either Salesforce.com will scoop up its rival CRM competitor RightNow, which had a market capitalization of roughly $540 million on Wednesday, or is “preparing to go on a spree that will involve multiple little guys,” Warfield wrote in a blog post. “With $500M they could buy a social player, a marketing automation player, and a sales comp player, all of which would be highly complementary to their CRM core.”

While it is difficult to say precisely which companies Salesforce.com may buy, “any prudent CRM CEO has to be looking at the economic realities of the moment,” said analyst Denis Pombriant of Beagle Research. “A conclusion can be drawn, and should be drawn, that CRM needs to be very different from what it is today.”

“Every CRM vendor needs to look at incorporating more technologies that are going to enable to operate in a world that has expensive transportation costs, changing markets that are leaning toward maturity and customers that are increasingly sophisticated,” he added. “The way you go after that is through incorporating things like video, VoIP, and a full suite of in-bound and out-bound social media.”

While Salesforce.com’s recently announced Chatter product set fits into the last category, it’s “just the tip of an iceberg,” Pombriant said.

If history is any guide, Salesforce.com will continue rounding out its portfolio with smaller deals, versus a big-bang, headline-grabbing acquisition. 

In December, it quietly purchased SaaS collaboration vendor GroupSwim. That move followed its purchase of call-center technology vendor InStranet in 2008 and content management player Koral in 2007. 

“What Salesforce.com will be interested in is embryonic companies with advanced ideas,” Pombriant said. “If you look at Salesforce.com’s history, they do tend to buy embryonic companies, and they have a very clear idea about those fit into the CRM master plan.”

Would you recommend this article?

Share

Thanks for taking the time to let us know what you think of this article!
We'd love to hear your opinion about this or any other story you read in our publication.


Jim Love, Chief Content Officer, IT World Canada

Featured Download

Featured Articles

Cybersecurity in 2024: Priorities and challenges for Canadian organizations 

By Derek Manky As predictions for 2024 point to the continued expansion...

Survey shows generative AI is a top priority for Canadian corporate leaders.

Leaders are devoting significant budget to generative AI for 2024 Canadian corporate...

Related Tech News

Tech Jobs

Our experienced team of journalists and bloggers bring you engaging in-depth interviews, videos and content targeted to IT professionals and line-of-business executives.

Tech Companies Hiring Right Now