If you are considering becoming a 1M/1M premium member and would like to join our mailing list to receive ongoing information, please sign up here.

Subscribe to our Feed

Cloud Stocks: Will Salesforce Acquire DocuSign?

Posted on Thursday, Dec 5th 2019

According to a recent report, (NYSE: CRM) was the leader in the global CRM market with 19.5% market share in 2018. Its closest rival SAP was a distant second with 8.3% market share. Analysts believe that 75% of the global spending on CRM in 2019 will be on SaaS-based products, compared with 73% last year. Earlier this week, Salesforce announced its third quarter results that surpassed market expectations. The market was not too pleased with the outlook though.

Salesforce’s Financials

Salesforce’s revenues grew 33% over the year to $4.51 billion, above analyst projection of $4.45 billion. Net loss was $109 million, or $0.12 a share, compared with a net income of $105 million, or $0.13 a share a year ago. On an adjusted basis, EPS was $0.75, again better than the Street’s forecast of $0.67.

By segment, Subscription and support revenues grew 34% over the year to $4.24 billion. Professional services and other revenues grew 22% to $274 million. Revenue growth was led by Service Cloud which grew 24% to $1.14 billion and Sales Cloud, which grew 15% to $1.17 billion.

For the fourth quarter, Salesforce expects revenues of $4.74-$4.75 billion with adjusted earnings of $0.54-$0.55 per share. The market was looking for revenues of $4.74 billion with an EPS of $0.61 for the quarter.

Salesforce expects to end the year with revenues of $16.99-$17 billion and adjusted EPS of $2.89-$2.90. The Street had forecast revenues of $16.92 billion for the year with an EPS of $2.86.

For the first quarter of the next fiscal, Salesforce forecast revenues of $4.8-$4.84 billion, falling short of the market’s expected revenues of $4.85 billion. Salesforce’s expectations of $20.9 billion in revenues for fiscal 2021 were also short of the market’s expectations of $20.95 billion.

Salesforce’s Voice Focus

During the quarter, Salesforce continued to upgrade its AI offering – Einstein. It is embedding Einstein in all customer experiences spanning its Salesforce Customer 360 Platform, especially the voice feature. It is also including new solutions for service and sales teams that will apply natural language processing to voice conversations to drive more personalized customer engagement.

Salesforce had introduced Einstein Voice Assistant nearly a year ago. The assistant allowed sales reps to communicate with Salesforce through a conversation. It is now expanding the abilities of this assistant beyond the salesforce to cover any role in the industry. Additionally, by simplifying the process of app development using Einstein Voice Skills, Salesforce will allow organizations to reimagine workflows and processes to drive productivity.

Salesforce has also included Service Cloud Voice in Service Cloud, thus creating an integrated offering of phone, digital channels, and CRM data available real-time to users on a single centralized console. Service Cloud Voice can also integrate with transcription services to convert voice to text in real time.

For the sales team, it introduced the Einstein Call Coaching feature that is included in the Sales Cloud and will help managers by providing them with insights and trends within conversational data. It will be able to identify keywords and alert managers about trends such as a spike in competitor mentions, or best practices or pricing discussions. Organizations can use these insights to deliver customized coaching to its sales reps.

Salesforce also expanded its tie-ups with Amazon recently. It introduced Service Cloud Voice that integrates Amazon Connect with the Service cloud. Traditionally service agents rely on information from multiple sources to address customer needs. With the new integration, customer assets, orders, support history, and other details will be available at a single place for agents. The integration will also allow Amazon Connect to provide AI-powered speech analytics to agents through Service Cloud Voice. Salesforce Einstein can then leverage this information to give recommended answers to agents, provide contextual knowledge articles, and suggest next best actions for the customer within the Service Cloud console.

Potential Acquisitions

Salesforce is targeting revenues of $35 billion by the year 2024. It hopes to achieve that by both acquisitions and product enhancement. In the last 18 months, Salesforce has spent over $24 billion in acquisitions of companies including Tableau, ClickSoftware, Datorama, and Mulesoft. Its acquisition spree is likely to continue in the coming quarters. It could look at adding more content-focused vendors such as DocuSign to compete with the likes of Adobe in that space.

Salesforce already has close ties with DocuSign. DocuSign offers DocuSign eSignature for Salesforce that allows organizations to send agreements for signature, capture information, tracking, and storing without leaving the Salesforce platform. According to reports, 90% of Salesforce’s contracts using DocuSign are signed and completed the same day. DocuSign has also been investing in growth. Last year, it acquired SpringCM in a bid to take on Adobe. DocuSign is currently trading at $70 a share with a market capitalization of $12.3 billion. It expects to end the current year with revenues of $947-$951 million and billings of $1.063-$1.083 billion.

Salesforce’s stock is trading at $161 with a market capitalization of $141.7 billion. It had touched a record high of $167.57 earlier this April. The stock has climbed from its 52-week low of $120.16 that it had fallen to in December last year.

Photo Credit: Open Grid Scheduler / Grid Engine /

This segment is a part in the series : Cloud Stocks

. Smartsheet Acquiring Bootstrapped Startups to Drive Growth
. Bootstrapped Unicorn Atlassian is Acquiring Capital Efficient Startups
. Netflix Price Hike Ruffles Competition
. How Will Carbon Black Differentiate?
. ServiceNow Grows Through Addition of Capital-Efficient Startups
. Zendesk and Freshworks Follow Different Acquisition Strategies
. Tableau Grows Through Small Acquisitions
. Open Platform Strategy Stands Intuit in Good Stead
. Will GoDaddy Follow the PaaS Route?
. Adobe Delivers Via PaaS
. A Look at Oracle’s 2018 M&A Activity
. What Apps Will Drive More Traction for Cloudera?
. Slack's App Focus Will Be Key to Post-IPO Success
. IBM Counts on its Cloud and Platform for the Turnaround
. Atlassian Acquires From its PaaS Marketplace
. What Should SAP Acquire to Triple its Value by 2023?
. Expect ServiceNow to Acquire From App Marketplace
. Should Follow a PaaS Strategy?
. How Upwork Can Leverage the Virtual Company Trend
. Qualys Scouting For Acquisitions
. Should SAP Acquire Zendesk or Freshworks?
. HubSpot Counts on its API Strategy
. SurveyMonkey Eyes Acquisitions for Growth
. Workday Wants to Disrupt Cloud Computing Using Machine Learning
. Einstein and Open-Source Platform Lead the Charge for Salesforce
. DocuSign Prepares to Beat Rival Adobe
. Veeva Soars, But Dassault Acquires Medidata for $5.8 Billion
. Tableau Acquisition Signals Massive Analytics Push for Salesforce
. Oracle Joins Hands with Microsoft to Take on Amazon
. GoDaddy is Making Strategic Acquisitions for the Next Level of Growth
. Alteryx Sees Strong Momentum
. Adobe Leveraging Magento and Marketo to Deliver Blockbuster Performance
. Is Slack Overvalued?
. How Will Cloudera Address the Competition?
. Zoom is Not Bothered by Cisco or Microsoft
. Domo Counts on Enterprise Revenue for Growth
. Netflix Plays with Pricing and Games to Attract Subscribers
. CrowdStrike Has a Successful IPO
. Atlassian Crosses the Billion Dollar Revenue Milestone
. ServiceNow Believes Strength Lies in Tie-ups
. Partnerships are the Mantra for BlackLine
. SurveyMonkey Counts on Enterprise Segment for Growth
. HubSpot Soars to a New High
. Intuit Pushes AI to Simplify Tax Filing
. Splunk Sees Strong Cloud Momentum
. Forescout Partners with Big Names
. Smartsheet Tapping into the Government Sector
. Salesforce Continues its Shopping Spree
. Palo Alto Networks Targets the IoT Security Market
. DocuSign Focuses on the Mortgage Sector
. Oracle Brags About Autonomous Database
. Blackbaud Acquires YourCause to Grow Addressable Market
. The Market Expects a Lot More from Adobe
. Anaplan Makes its First Acquisition Post IPO
. Activist Investor Drives Market Interest in Box
. MongoDB's Formula for Success
. Coupa Aims for $1B Revenue
. Dropbox on a Rocky Road
. Medallia Banks on Acquisitions
. IBM Banks on AI
. Time For Skepticism with Netflix
. SAP Riding High on the Cloud
. Amazon's Faster Shipping Hurting its Earnings
. ServiceNow CEO Change Signals Focus on Acquisitions
. Will Google Acquire Fitbit?
. HubSpot Focuses on Its Platform
. BlackLine Partners with Google Cloud
. Rapid7’s Focus on Cloud SIEM Pays Off
. Splunk Bets Big on Data Streaming
. Intuit's QBO Scores Big
. VMware Builds Up With Acquisitions
. Palo Alto Targets $5B Revenue by 2022
. Workday Targeting Procure-to-Pay Cycle
. Will Salesforce Acquire DocuSign?
. Okta Targets Enterprise Customers
. MongoDB Eyeing China With Alibaba Partnership
. Twilio Counts on API Upgrades for Growth
. Adobe Revs up its Experience Platform
. Top 20 for 2020
. Anaplan Sees Expanding Use Cases
. Dropbox Gears Up to Regain Lost Valuation
. Forescout Fails to Deliver
. Enterprise Bet Pays Off for SurveyMonkey
. SAP Bets Big on Experience Management
. Twilio Steps up Investment in 2020 to Preserve Growth Momentum
. Zendesk, Freshworks Focus on Marketplaces and Integrations
. Proofpoint Targets Insider Threats Through Acquisition
. RingCentral's Powerful Partner Strategy Would Augment with PaaS
. Qualys Counts on Google and Microsoft for Growth
. Shopify Soars on Improved Merchant Offerings
. HubSpot Believes in the Importance of PaaS
. BlackLine Remains Focused on SAP Integration
. Recently Public Cloudflare has New Edge
. GoDaddy is on a Shopping Spree
. Intuit Targets Online User Base Through Acquisition
. Should Palo Alto Networks Acquire ZScaler?
. Why Salesforce Buying Vlocity Proves the Growing Importance of PaaS
. Datadog Performing Well Post Recent IPO
. Workday Should Open Up About its PaaS Success
. Anaplan Focuses on API Connectors for its Platform
. Veeva
. Five9 Strengthens its PaaS Focus
. RealPage Brings AI and SaaS to Real Estate
. Splunk Should Open up About its PaaS Metrics
. Okta Benefiting from App Diversity
. Oracle Sees Growth Momentum
. Xero Focuses on a PaaS Strategy
. DocuSign Resilient to COVID-19
. Smartsheet Looking up to Enterprise Customers for Growth
. Paylocity Delivers Solid Results
. Q2 Holdings Expands TAM with Acquisitions
. New Relic Focuses on PaaS
. AppFolio Leverages AI for Product Enhancement
. Will Adobe Open Up About its PaaS Statistics?
. Change Healthcare Pushes APIs
. Dropbox Needs to Share API Metrics
. Upwork Improves Monetization
. MongoDB has Miles to go
. Nutanix Needs to Define a PaaS Strategy
. Cloudera Focuses on Hybrid Cloud
. Atlassian Gears Up for Growth, Unfazed by Covid-19
. Shopify Helps Merchants Pivot to Online Stores
. ServiceNow Steady in Turbulent Seas
. RingCentral Sees Strong Traction
. Twilio Hits 52-Week High Amidst COVID Crisis
. HubSpot Lowers Outlook Amidst Virus Concerns
. Proofpoint Acquiring Even Amidst Crisis
. BlackLine Looks Solid At The Face of Covid-19
. GoDaddy Continues to Acquire
. Qualys Expands Cloud Offerings to Soar to New Highs
. Zendesk Struggling Amidst the Downturn
. Alteryx Bounces Back Despite Low Outlook
. Palo Alto Networks Continues to Acquire
. Workday Extends its PaaS Strategy
. Splunk Rides High on Cloud Initiatives
. Salesforce Partners with Workday to Address the New Normal
. Veeva Scales New Highs
. Is Smartsheet’s Pullback a Buying Opportunity?
. MongoDB Soars Even in the Crisis
. Okta Reiterates Outlook
. Is Anaplan a Prospect for Oracle, SAP?
. Oracle Relies on Autonomous Offerings
. Adobe Shifts its Focus
. Paycom Confident Under Current Conditions
. DocuSign Soars to Record Highs
. Paylocity Acquires Amid Crisis
. Datadog's Integrations and Upgrades Help it Soar
. AppFolio Improves Offerings for Current Conditions
. SurveyMonkey Should Get Into PaaS
. Model N Soars to a Record High
. Appian Focuses on RPA for Growth
. Slack Beefs up its Portfolio
. Coupa Expands into Treasury Services
. CrowdStrike Soars to Record Highs
. Guidewire Expands Cloud Offerings
. Dropbox Should Focus on PaaS
. Talend Expands Data Offering Through Partners
. IBM Expands Cloud Partners
. One Medical Supports COVID-19 Care Digitally
. Microsoft Rides High on Teams and Gaming
. Investors Say Yes to nCino’s IPO
. Nutanix Focuses on Government and Media Verticals
. SAP Rethinks Qualtrics Acquisition
. Tenable Expands Into Industrial Cyber-Security
. ServiceNow Expands Ties with Zoom
. Cloudera Powers its Data Platform with Partnerships
. Atlassian Continues to Acquire from PaaS Ecosystem
. Shopify Soars to an All-Time High
. The PaaS Landscape
. HubSpot Focuses on the Enterprise Segment
. GoDaddy Restructures During COVID
. Akamai's Security Solutions Thriving
. Blackline Needs a PaaS Strategy
. Twilio - A Successful PaaS Story
. Zendesk Invests in the Future
. Qualys Continues to Acquire Indian Startups
. ZoomInfo Lists Despite COVID-19
. Analysis of Alteryx PaaS Strategy
. Fastly Needs to Diversify from TikTok
. Way to Go, Salesforce
. Intuit Continues to Acquire
. VMware Continues Buying Spree
. Analysis of Five9's PaaS Strategy
. Okta Expands Alliances to Attract Enterprises
. Palo Alto Continues to Acquire
. Analysis of Splunk's PaaS Strategy
. BigCommerce Goes Big with IPO
. Analysis of Workday's PaaS Strategy
. Analysis of Anaplan's PaaS Strategy
. Sees Strong Demand
. Analysis of MongoDB's PaaS Strategy
. Analysis of Wix's Platform Strategy
. New Relic Product Upgrades Deliver Growth
. What Should Proofpoint Acquire?
. Smartsheet Should Follow Atlassian’s Example
. Adobe's Relentless Growth Continues
. SurveyMonkey's PaaS Prospects
. DocuSign Acquires Amid COVID
. Paylocity Counts on Video
. The Unstoppable Veeva
. Magic Software Acquires to Expand in Europe
. What Can Cloud Startups Do To Raise Seed Capital in 2021?
. Guardant Seeks to Disrupt Oncology Testing
. Dropbox Adds Security Capabilities
. Domo Growing Steadily
. Nutanix Focuses on the Hybrid Cloud
. IBM Fails to Impress

Hacker News
() Comments

Featured Videos


[…] expects to end the year with revenues of $16.99-$17 billion. Further analysis is available here and […]

Top 20 Cloud Stocks 2020 - AI+ NEWS Monday, January 20, 2020 at 4:05 PM PT