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Research report date: 2017-10-19
A leading company in global cloud services. As of August 31, 2017, Salesforce had a market capitalization of $68.2 billion, becoming the world's largest cloud services company, and the first software company to exceed $10 billion in revenue and the fastest to reach $5 billion in revenue. The company is the undisputed leader in the CRM field.
Products are priced on a step-by-step basis: the company's products are charged in four versions, from $25 per month per user to $300 per month per user, and the features are more versatile as the charges are more powerful. The current main products are Sales Automation, Service, Platform, and Marketing Automation. In the future, the company will expand its new areas, including CommerceCloud (unified cloud business software), Community Cloud (customer community collaboration software), IoTCloud (Internet of Things solution), Analytics Cloud (analysis tool), Salesforce Quip (content collaboration platform).
Focus on mergers and acquisitions in the CRM field to achieve business synergies. Since 2011, the company has accelerated the pace of outreach. Especially in 2016, the company acquired 7 companies. The investment in 2012-2016 was as high as $8.2 billion. The company's M&A focuses on the CRM field and acquires sales, service, marketing and other companies based on its own product line. In recent years, the company has increased its acquisitions in the fields of artificial intelligence and machine learning.
The future development direction is aimed at artificial intelligence. Salesforce Einstein is CRM's first comprehensive AI product. Einstein is used in Sales Cloud, Service Cloud, Marketing Cloud, Salesforce Platform, Analytics Cloud, and Community Cloud through a full suite of AI technologies. With Salesforce's AI product Einstein. Sales staff can predict the needs of customers to predict potential business opportunities and exceed customer expectations; service personnel can avoid proactive services before potential problems occur; marketers can carry out predictive activities to further expand personalized customer sales; IT People can put intelligence into every corner and create smarter apps for employees and customers.
Investment suggestion: Salesforce, as the leading company of cloud services, still maintains a high growth rate of 25%. The global software industry is becoming more and more cloud-oriented, and global investors have also responded positively. As of this week, the Nasdaq index rose 16.39% this year, the Dow Jones Industrial Average rose 10.38%, Salesforce rose 37.45% this year, Autodesk rose 55.34%, Adobe rose 47.11%, not only outperformed the index, but also outperformed this year. The FAAMG, which excels in the market, has received the full attention of the entire SaaS sector in the United States. Focus on Guanglianda, UFIDA, Shiji Information, Henghua Technology, SuperMap software, etc.
Risk warning: industry development is less than expected, industry competition is intensifying [Essence Securities]
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