Salesforce.com: We Remain Long-Term Buyers, Says William Blair


In a research report issued today, William Blair analyst Bhavan Suri assigned an Outperform rating on Salesforce.com (NYSE:CRM), following the ExactTarget Connections event. No price target was provided.

Suri wrote, “Overall, the feedback on the ExactTarget Marketing Cloud was very positive. The vast majority of customers were very satisfied with the product, and many were considering purchasing additional functionality or expanding their usage. When we were at the event last year, many customers we spoke with were somewhat concerned about what would happen with the product after salesforce.com’s acquisition; this year it seems that most of those concerns have subsided. Many customers are satisfied with the product’s road map and believe that the solution has continued to improve. In our opinion, the integration has largely been successful to date, and we believe the product is now one of the most compelling marketing suites in the market.” The analyst added, “We did not detect a change in the competitive environment, and believe that ExactTarget continues to replace legacy solutions, such as CheetahMail and Axiom. Versus other newer solutions (such as Responsys), customers cited ease-of-use, better functionality, lower cost, and integration with salesforce.com as reasons for choosing the ExactTarget Marketing Cloud. Thus, we believe the solution is well positioned to continue to take market share and believe the Marketing Cloud’s growth should continue to be above the company’s overall growth rate. We also believe that the Marketing Cloud has the potential to become a multibillion-dollar annual revenue product, given the size of the market and the product’s positioning.”

The analyst continued, “The one negative we detected is that cross-selling within the ExactTarget customer base remains somewhat limited. Many customers whom we spoke with that were ExactTarget customers prior to the acquisition have not elected to purchase any other salesforce.com products. However, we believe this will be resolved over time as the two separate salesforces (for the Marketing Cloud and for the other solutions) eventually become integrated and move to more of a solution selling approach. In addition, we believe that many customers have put off purchasing decisions while they waited to see how ExactTarget progressed under salesforce.com’s ownership, and now that most of the new ownership fears have passed, these clients could look to purchase additional solutions.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Bhavan Suri has a total average return of 6.6% and a 50% success rate. Suri has a -3.5% average return when recommending CRM, and is ranked #1106 out of 3304 analysts.

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