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Salesforce Continues to Propagate Lightning With New Tools

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Salesforce.com (CRM - Free Report) recently launched a new set of tools that run on low-codes to expedite app building process by companies. Per Outsystems, low-code is a faster way of designing and developing software with minimal hand-coding.

The new set of tools is devised to run on salesforce’s Lightning Platform, built to avoid obstructions like developer gap and IT backlogs plus deploy next-generation cloud applications.

The new set of tools has been built on the company’s Software-as-a-Service (SaaS)-based application, Force.com, which allows its customers to develop personalized applications using languages of their own choice and convenience.

Per management, Lightning Platform — integral to the salesforce Platform offering — gained wide adoption as it has been used to develop more than 220,000 apps.

Moreover, per a recent study by the International Data Corporation (IDC), salesforce enterprise clients using the Lightning Platform witnessed an ROI of 545% over the last five years. Moreover, the market research firm stated that enhanced productivity of the platform users led to revenue benefits of about $8.8 million per company surveyed.

The salesforce Platform as a whole has seen impressive growth over the years. In the company’s last reported quarter, this service grew 34% year over year. This upside was driven by a continued adoption of platforms like Heroku and the Lightning.
 

Cloud Computing Spurs Growth Opportunity

Salesforce’s strategy of frequent product launches and cloud services are helping it expand its clientele, thereby driving the top-line growth in turn.

The rapid adoption of the SaaS-based salesforce platform demonstrates solid demand for the company’s cloud-based solutions. Moreover, higher enterprise spending on cloud computing is a key catalyst.

According to IDC estimates, spending on public cloud services and infrastructure will reach $277 billion by 2021. Furthermore, per Gartner, the worldwide CRM software market, which generated revenues of $39.5 billion in 2017, is expected to grow by 16% in 2018.

Competition Intensifies

Cloud computing market’s attractive growth prospects are inciting new competition. Although salesforce is undisputedly the dominant name in CRM services, the growing contest from Microsoft (MSFT - Free Report) is a major concern. Salesforce also faces stiff rivalry from Oracle (ORCL - Free Report) in the cloud-based CRM market.

Oracle has strengthened its cloud position via various strategic acquisitions. Microsoft has also added several key companies like LinkedIn to its portfolio to boost its Dynamic CRM platform. Additionally, Microsoft’s special pricing offers for its Dynamics CRM Online service is helping it lure salesforce’s customers.

Nonetheless, with its SaaS-based CRM and social enterprise applications, the company is well-positioned to tackle the escalating competition. Salesforce’s diverse cloud offerings and a strong spending on digital marketing keep it ahead in the CRM game.

Zacks Rank & Key Pick

Salesforce currently sports a Zacks Rank #1 (Strong Buy). Another top-ranked stock in the broader Computer and Technology sector is Fortinet, Inc. (FTNT - Free Report) , also carrying a Zacks Rank of 1. The stock has a long-term earnings growth rate of 16.8%. You can see the complete list of today’s Zacks #1 Rank stocks here.

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