) is a pure cloud computing player offering a number of
cloud-based products including customer relationship management (
) software as well as its development platform Force.com.
Salesforce.com competes with SAP (
), Oracle (
), Microsoft (
) and IBM (
) in the CRM software market.
Force.com is a development platform and infrastructure for
corporate IT departments and independent developers to build
business applications. It provides an environment to develop custom
applications beyond CRM applications.
We estimate that CRM software and other cloud computing products
account for around 66% and 26% of our
$116 price estimate for Salesforce.com stock
. Our price estimate stands about 5% below market price.
Force.com Prospects Looking Brighter
Salesforce.com's presence in the cloud computing space outside
of the CRM software market is currently small, with few meaningful
revenue opportunities until now. But given that the cloud computing
market could see rapid growth in the near future, even a small
presence should provide notable upside.
Cloud Computing Market Share (Excluding Cloud-Based CRM
See our full analysis and $116 price estimate for
To increase its presence in the cloud computing market, the
company has started to increase focus on popularizing products like
Force.com, AppExchange and Database.com. Management was most
bullish on Force.com's prospects during the company's most recent
earnings conference call. Management noted:
"We see momentum building in the platform as a service
category as companies demand more social, mobile and open
applications to serve their employees and customers. We have the
only platform for building quality applications that is a
trusted, proven solution for the enterprise. And with our
strategic news towards an open multi-language, multi-develop
strategy in the last 90 days, we believe Force.com is positioned
to be a long-term leader in the platform as a service
Management also stated:
"Force.com achieved some truly impressive milestones. This
year, we attracted an additional 100,000 developers creating a
global customer community of more than 340,000 developers writing
on the Salesforce.com platform."
These statements both point to upside in Salesforce.com's cloud
computing market share. The interactive chart above illustrates how
changes to Salesforce.com's cloud computing market share outlook
(excluding cloud-based CRM software) could affect the company's