8,000 Words Sum Up Change At Salesforce

J.P. Morgan commented on salesforce.com, inc. CRM Wednesday following discussions with sixteen “key contacts” in the company’s ecosystem and compiling 8000 words of quotes that “provide a frontline view of trends that will shape CRM’s future.”

Analysts led by Mark R. Murphy said the key points included how partners saw a large deal pipeline for 2015, many of the deals with Fortune 500 firms, and possibly a recent transaction in the $10-20 million per a year range.

Murphy also noted that the “multi-product pillar thesis” the firm had mentioned several times was confirmed throughout conversations with partners which highlighted “strength across product lines including Service Cloud, Force.com (including $3M-5M platform wins in Europe) and Communities.”

The company’s partners also believed “Salesforce’s ‘work isn’t done yet’ and have discounted the [M&A] speculation, with only sporadic indications that the noise created hurdles toward the end of the FQ1 close.”

The analysts did not expect “Q1 results to alter the narrative materially,” while feedback demonstrated that Salesforce was “strengthening its leadership of the Cloud landscape,” and the analysts believed “it remains a core long-term holding.”

Below are five positive highlights and quotes from the discussions:

1. “One partner indicates that salesforce likely closed a recent ‘nice sized deal’ with a multi-billion dollar security systems company. ‘It was millions of dollars…. in the $10-20M a year range.’”

2. “Europe, we’ve finally gotten through a lot of the privacy and security laws with the Salesforce cloud over in the EU. That goes a long way toward opening up the European market.”

3. “The platform play for Salesforce is actually getting more aggressive, more noticed.”

4. “If CRM conquers the big data sector… God forbid you’re somebody in that [big data] space.”

5. “The Federal Government just recently issued a blanket order for salesforce.com. What that means is the GSA is requesting a preferred vendor list from salesforce.com so that agencies can buy off of this pre-approved list …”

As for negative feedback, the analysts reported the following from CRM partners:

1.“Q1 has been slower for us, but was about what we expected.”

2. “The work is out there, but hiring people is tough.”

The firm reiterated its Overweight rating on the stock and its $78 price target.

Salesforce.com, Inc. recently traded at $70.12, down 1.90 percent.