The holiday shopping season this year will bring even more cheer than usual to Salesforce.com Inc., as a growing number of companies and their suppliers use Salesforce cloud-based marketing and commerce applications to better home in on what buyers want.
At least that’s the expectation of Salesforce executives, according to their comments on a conference call with stock analysts yesterday for the third fiscal quarter ended Oct. 31.
Keith Block, vice chairman, president and chief operating officer, said the company’s technology investments in recent years have helped boost growth with clients across several industries, including healthcare, pharmaceuticals and retail. Salesforce offers several cloud-based technology suites for such applications as customer relationship management, commerce, salesforce automation, customer service, marketing and analytics.
Block noted that, in the past year, Salesforce’s investments in commerce and marketing in particular have helped its growth with merchants who use its Commerce Cloud and its Salesforce DMP software, or data management platform, to better understand, interact with and sell to their customers during the holiday shopping season as well as throughout the year.
Marc Benioff, chairman and CEO, said Salesforce is seeing increasing demand for such technology among both business-to-business and business-to-consumer companies. He added that he believes virtually every company is striving to better interact with both their suppliers and their customers, including consumers and business buyers. “I don’t care if it’s a B2B or B2C company, every company is becoming ‘B2B to B2C’ and that is driving this forward,” he said on the conference call, according to a transcript from Seeking Alpha.
Commerce Cloud launched in September 2016 as the result of Salesforce’s $2.8 billion acquisition of the Demandware e-commerce platform, which had built up a strong customer base among retailers and brand manufacturers that sell to consumers. In the third quarter, Commerce Cloud contributed $64 million in revenue from subscriptions and support services, and combined Q3 revenue from Commerce Cloud and Marketing Cloud increased 40% year over year, Salesforce said.
Salesforce DMP is designed to help Salesforce users capture and analyze data on customer activity, and use that data to develop personalized ways of interacting with customers through marketing campaigns and customer service. In 2016, Salesforce paid approximately $700 million for data management technology company Krux and renamed its Salesforce DMP earlier this year.
With both Commerce Cloud and Salesforce DMP, Salesforce now offers a technology platform designed to help online sellers deliver “brand experiences” more personalized to their customers’ interests, Block said. “That’s why international cosmetics retailer LUXit has chosen Commerce Cloud to replace their home-grown e-commerce solution to accelerate global growth.”
Salesforce also announced last week the appointment of two co-presidents reporting to Benioff. Bret Taylor, founder and CEO of Quip, a provider of cloud-based word processing and document collaboration technology Salesforce acquired last year, was named president and chief product officer, succeeding Alex Dayon. Taylor, a former chief technology officer at Facebook, will be responsible for global product “vision, design and development.”
Salesforce named Dayon as the new president and chief strategy officer. Dayon, who has been with Salesforce since 2008, will be responsible for leading strategic initiatives and working with customers to get their input on products.
For the third quarter ended Oct. 31, Salesforce reported:
- Total revenue of $2.6798 billion, up 24.9% from $2.14448 billion a year earlier;
- Marketing and Commerce Cloud revenue of $346.2 million, up 40% from $247.2 million;
- Gross profit of $1.965 billion, up 26.0% from $1.559 billion, resulting in a gross profit margin of 73.3%, up from 72.7%;
- Net income of $51.394 million, compared with a net loss of $37.309 million; much of the difference in net income was related to different provisions for taxes in each year.
For the nine months ended Oct. 31, Salesforce reported:
- Total revenue of $7.629 billion, up 25.1% from $6.098 billion a year earlier;
- Marketing and Commerce Cloud revenue of $952.3 million, up 50.1% from $634.5 million;
- Gross profit of $5.5933 billion, up 24.6% from $4.4899 billion, resulting in a gross profit margin of 73.3%, down slightly from 73.6%;
- Net income of $59.923 million, down from $231.072 million.
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