salesforce.com, inc. (NYSE:CRM) is one of the companies benefiting amid the ongoing digital transformation accelerated by the pandemic. The company’s ability to provide integrated cloud solutions is one of the key drivers. Likewise, the proposed acquisition of Slack looks set to strengthen the company’s push for enterprise clients.
Growth in Cloud
Growth across all the four major cloud service offerings led by Sales Cloud, Service Cloud platform, and marketing & commerce cloud all but affirm a company in a phase of robust growth amid the pandemic. However, a decline in spending by small and medium businesses could take a toll on the bottom line.
Competition is another tailwind that stands in the way of Salesforce achieving its goals. Oracle and Microsoft's competitive edge on the cloud is one of the biggest risks to earnings topping estimates in addition to forex headwinds.
Growing innovation and expansion into international markets as well as investments in data centers should help Salesforce curtail any downside action on the bottom line heading into year-end. The company also boasts of a big clientele base as compared to its peers. Any company involved in sales is a potential client.
Slack Acquisition
The proposed Slack acquisition would take Salesforce's competitive edge to another level. For starters, it will help the company pitch its solutions to Slack’s enterprise clients the same way Microsoft sales within CRM and enterprise data-sharing space.
While buying Slack won’t be a cheap endeavor, it is highly needed if Salesforce is to strengthen its business empire. The company has in the past relied on acquisitions to accelerate revenue growth, having completed a $16 billion deal for data-visualization specialist Tableau software in 2019.
In 2018 it paid $6.5 billion for MuleSoft, conversely strengthening its prospects as an enterprise SaaS company. Salesforce has already surpassed the $20 billion mark in annual revenue thanks to its impressive acquisition track record. The Slack acquisition would be a big deal as it will expand Salesforce cloud enterprise product offering as well as the revenue base.