IoT Could 'Greatly Expand' Salesforce's Market Opportunity

Brean Capital analyst Yun Kim expects the Internet of Things could greatly expand salesforce.com, inc. CRM's market opportunity. His comments came on the back of attending a conference this week and maintained a Buy rating with a price target of $110 on shares.

Kim said that based on his conversations with different high-profile industry attendees, "we believe customer relationship management market is a key beneficiary of market adoption of IoT technology. Given salesforce.com's (SFDC) strength in customer relationship management and customer-facing functions, we believe SFDC is well positioned to benefit from emergence of IoT."

Related Link: Salesforce Is 'Innovating Like An $8 Billion Startup'

The brokerage viewed that several people to whom it spoke at the conference are planning to incorporate SFDC as the business platform to deliver new business functions enabled by IoT. Therefore, in its view, the emergence of IoT greatly expands the current customer relationship management market opportunity for SFDC. The analyst is also confident it opens up fresh market opportunities. That included advanced data analytics and event-processing/business rule engine.

Brean thinks "Service" aspect of IoT is likely to be the key driver of user/market adoption. Kim said his discussions with key players in the IoT industry at the conference indicated the "service" element of user experience is likely to be the catalyst behind early market adoption of IoT technology.

The brokerage also believes analytics likely to play a role in every phase of IoT processes. The analyst said, "We note that raw data generated by IoT products need to be analyzed to unlock their value. In that regard, we expect data analytics to play a key role in IoT."