The cloud-based CRM company said late yesterday that a 33% year-over-year increase in first-quarter revenue from its ecommerce and marketing software, to $561.26 million, helped drive a 24% rise in total revenue to $3.74 billion.
Salesforce doesn’t break out revenue for its ecommerce and marketing software suites. Its Commerce Cloud software is comprised of the CloudCraze and Demandware software it acquired in recent years for B2B and retail ecommerce technology. Although still by far the smallest contributor to revenue, the combined ecommerce and market software suites accounted for the sharpest gains in revenue from the company’s software suites, which also include its flagship Sales Cloud CRM suite and its Service Cloud customer service software.
Growing with ‘Customer 360’
Marc Benioff, chairman and co-CEO, said on a conference call with investment analysts yesterday that a “major growth engine” for Salesforce going forward will come from how companies use data integration across its multiple software suites to better understand and serve their customers. Using its Einstein artificial intelligence software, along with data integration technology from its 2018 acquisition of MuleSoft, Salesforce is promoting a strategy it calls Customer 360. Under this, Salesforce and its customers are developing applications to integrate and use customer data across sales, service, marketing and “customer-engagement” systems to be more responsive to customer needs, Benioff said, according to a transcript of the call from Seeking Alpha.
“We have a powerful vision for the future, with intelligent Customer 360, giving our B2B and our B2C customers a unified 360-degree view of their customers across every touch point,” he said.
Also in the fiscal first quarter, Sales Cloud revenue increased 11.2% to $1.07 billion, and Service Cloud revenue increased 20.3% to $1.02 billion, Salesforce said.
Growth in customer service software
Sales Cloud, the company’s flagship CRM software, is used by sales professionals to manage customer activity, from leads to closed deals. The pace of the business has been slowing and analysts were keen to see it maintain double-digit sales growth.
Service cloud provides customer service software for services that companies provide via phone, website self-service, online chat or email. The service unit has had loftier growth rates than the Sales Cloud of late, as more companies adopt new tools for providing customer service and communicating with field workers.
The remainder of Salesforce revenue comes from the Salesforce Platform, on which companies develop their own software applications, and from the company’s “Other” products category. First-quarter revenue listed under “Salesforce Platform and Other” increased 46.4% to $842 million.
Salesforce doesn’t publicize the fees it charges for its ecommerce and marketing software, which it sets separately for each customer. For its Sales Cloud and Service Cloud, it charges fees ranging from $25 to $300 per user per month. With Sales Cloud, companies can pay an extra $50 per user per month for the inclusion of Salesforce Einstein artificial intelligence software for generating product recommendations and predictions of how customers will respond to offers.
For the fiscal first quarter ended April 30, 2019, Salesforce reported a 14.0% increase in net income to $392 million.
Bloomberg News contributed to this report.
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