salesforce.com, inc. CRM could consistently perform ahead of expectations by offering an integrated set of cloud suites, BMO Capital Markets’ Keith Bachman said in a report. He initiated coverage of the company with an Outperform rating and a price target of $98.
Analyst Keith Bachman mentioned that saleforce.com could benefit from two scale issues:
- By offering an integrated set of cloud suites: “More specifically, we think customers favor buying sales force automation, service, and marketing suites that are well integrated.”
- The company’s scale provides brand, sales and cost advantages: Offering a competitive edge over other SaaS vendors.
Sales Cloud Growth
Bachman believes Sales Cloud would continue being the market leading SFA [sales force automation] application and expects Sales Cloud to grow 8-12 percent over the next three years. “Further, we believe Sales Cloud will be the market leader in absolute dollars terms, and will help lead to cross-selling of other saleforce.com products.”
Service Cloud To Be Largest Contributor
“The service market is the largest segment within the broader customer relationship market at about a $10 billion total addressable market (TAM),” the analyst wrote. He expects the market to grow 10-12 percent in constant currency terms to reach about $14 billion in 2018.
Salesforce.com’s Service Cloud has been the market leader, and could grow at nearly 30 percent y/y in FY17 and 25 percent y/y in FY18.
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