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What A Dreamforce Conference Survey Had To Say About Salesforce

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What A Dreamforce Conference Survey Had To Say About Salesforce

Patrick Walravens of JMP Securities maintained an Outperform rating on salesforce.com, inc. (NYSE: CRM) with an unchanged $92 price target after attending the company's "Dreamforce" user conference last week.

Walravens took advantage of the conference to ask over a dozen of salesforce.com's partners four key questions, and the answers helped reinforce the analyst's bullish thesis.

No. 1: Has Salesforce Saturated Its Core Sales Cloud Market?

The analyst asked companies if salesforce.com has saturated its core Sales Cloud market. Of the 11 companies who responded, five said yes and six said no.

Some of the comments from participants include:

  • "We're at 10–15 percent [in terms of] cloud adoption. [We have] 85 percent more to go. But it's definitely a point of inflection. If you're selling on-premise software, it's not that easy to do it anymore. World is shifting fast but there's much more to sell… Still early innings with cloud."
  • "I think the Sales Cloud is saturated. I think that's why they're making a lot of these acquisitions. Certainly, the last two quarters point to that."
  • Related Link: 3 Reasons The Market Is Undervaluing Salesforce

    No. 2: Will Einstein Be A Disappointment?

    The analyst asked participants if salesforce.com's artificial intelligence-branded offering, Einstein, will be a failure.

    Among the 10 companies that answered, four said yes and six said no.

    Some of the comments from participants include:

  • "If they hadn't done Einstein, I would've had to figure this whole machine learning thing out. Now, I don't have to… They're going to plug Einstein in and I'm going to use it. I need machine learning and now… we can check the box."
  • "Will this particular version of Einstein work? No… If you're trying to get prediction and intelligence on top of bad data, you're going to get bad answers… You lose user adoption."
  • No. 3: Would An Acquisition Of Twitter Be Viewed Favorably?

    The analyst received responses from 12 companies when asked if an acquisition of Twitter Inc (NYSE: TWTR) would be viewed favorably.

    Four of the responses said an acquisition would be viewed favorably and eight suggested a positive outcome is unlikely.

    Some of the comments from participants include:

  • "The first question is why [Marc] Benioff would want a social network. Clearly, Marc is interested in social networks… So, would Twitter be useful? For me, I have invested my career on that premise – I believe there's a tone of value in what people are saying online to companies… I don't know much about Einstein, but that product needs lots of data and 500 million tweets a day is a lot of data… It would make sense in the Service Cloud – people complain on Twitter."
  • "LinkedIn would have been a good acquisition for salesforce.com because it's so closely related to the core use case. When we talk to sales people, they live more in LinkedIn than in salesforce.com. Twitter is not particularly relevant for these guys."
  • No. 4: What Is The Tone Of The Business?

    Finally, the analyst asked if the tone of salesforce.com's business is good or bad. A perfect 11 of the 11 companies who responded were positive on salesforce.com's tone.

    One of the comments from participants was:

  • "I ask big companies, ‘Why are you here? Why come to Dreamforce?' They tell me this is the heartbeat of tech… Leaders want to understand what the heck is going on here. The biggest thing that blows me away with Dreamforce versus other tradeshows is the number of high-level executives that come here. You increasingly get the sense that this is a big deal. I don't know that I ever saw that with Sapphire, for example. It's an interesting phenomenon."
  • At last check, salesforce.com was up 6.46 percent at $75.47.

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    Latest Ratings for CRM

    DateFirmActionFromTo
    Oct 2020BarclaysMaintainsOverweight
    Oct 2020UBSInitiates Coverage OnBuy
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