Is Salesforce Still A Force To Be Reckoned With? An Algorithmic Perspective

Saleseforce (CRM)

The software service giant Salesforce (CRM) is a company unanimously associated with customer relationship management software – so much so, in fact, that it is traded on the NYSE under the symbol “CRM” itself. The world’s largest provider of CRM software, Salesforce serves over 104,000 customers, has more than 5 million users, and boasts a social media following totaling over 782,229 users across Twitter (TWTR), Facebook (FB), and LinkedIn (LNKD). In recent years, pursuing an aggressive growth plan, it has also made numerous acquisitions in the hopes of elevating revenue growth, forming strategic alliances with the likes of Microsoft (MSFT) and Oracle (ORCL). This expansive behavior has not gone unnoticed: Salesforce was ranked the most innovative company in Canada by Forbes in 2013, and Number 7 in Fortune magazine’s “100 Best Companies to Work for in 2014” – it has, to be sure, received no shortage of accolades from global and American business publications in recent years. In addition, I Know First predicts a bullish forecast for the company in the 3-month and year-long periods.

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The Good

There is merit to considering Salesforce in buying decisions. Salesforce itself, for one, appears to believe that its growth strategies will grant it increased success in years to come. In anticipation of expansion, the company recently signed a tremendous lease that will see it taking over the tallest office building west of Chicago. Strategically located, this new office tower is in the center of downtown San Francisco, and is easily accessible to other regions of both the Bay Area and California as a whole. “It’s a great symbol of Salesforce as a company that brings other companies into the future,” says George Hu; Wiegel seconds him, saying that Salesforce’s reaching 500 employees in the local office in five years – twice the jobs committed as part of its Oregon relocation package – is a sign of strength for the regional market.

Despite the flack it has received for its acquisition-based growth, too, Salesforce remains committed to its strategic methodology: a sign, perhaps, that there is more to its business development ideas than meets the eye. Soon-to-be-retired Salesforce CFO Graham Smith acknowledges this, saying, “We’ve been very clear about our strategy to prioritize growth and operating margins over time.” Following his leave, Autodesk’s Mark Hawkins will step into the role. Hawkins is famous for his executive roles at Dell and HP (HPQ), the latter of which he helped build quite dramatically. He joins the company enthusiastically, calling its potential “enormous”: a counter to the naysayers.

Salesforce has also been careful to resolve any criticisms aimed at it. After its phishing attack ordeal in 2007, the company – and CRM in general – was criticized for its insufficient user security: a common problem in CRM. In the aftermath, one particular demand surfaced from consumers and industry experts: Salesforce needed to create a European data center to ensure that European customers’ information was kept as safe as possible. Using American-based cloud solutions for European client data, said Phil Shoesmith – Head of IT at Alzheimer’s Society UK – was just not as secure as operating a locally sited datacenter. “We would like to see [an EU datacenter] for risk mitigation,” he said. Salesforce responded enthusiastically, promising that a datacenter would be opened in 2013; despite a slight delay, it announced finalized plans for a Slough-based datacenter in May 2013. It is expected to open with full functionality by 2014.

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