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Salesforce's Stock Needs to Hit Reverse Though Chatter Integration with CA Lifts Shares

By: Trefis
Posted: 7/7/2011 3:30:00 PM
Referenced Stocks: AMZN;CA;CRM

CA Technologies ( CA ) announced today that it is integrating Salesforce.com's ( CRM ) Chatter with its existing project portfolio management solution, which is used by many organizations to manage their projects, products and services. Salesforce Chatter is a private social networking platform like Facebook or Twitter which is aimed at enterprises. Salesforce.com competes mainly with Oracle (NASDAQ: ORCL), Google (NASDAQ: GOOG) and now Microsoft (NASDAQ: MSFT) in the cloud computing market.

We have a $122 price estimate for Salesforce.com, which is about 20% below the current market price.

Chatter Adoption Could Drive Cloud Product Sales

Since the Chatter announcement was made by CA, Salesforce.com stock is up more than 3%. Though Chatter itself comprises only about 2% of the Trefis price estimate for Salesforce.com stock, increasing adoption of Chatter by enterprises could provide upselling opportunities to Salesforce.com. This could drive greater sales of its core products like cloud based CRM applications, as well as platforms like Force.com and Database.com, which constitute almost 90% of the Trefis price estimate for Salesforce.com.

See our full analysis here