Salesforce Acquires Assistly

Cloud computing and customer relationship software developer Salesforce.com (CRM - Analyst Report) recently announced that it has acquired an instant customer-service help desk, Assistly, to enhance its cloud offerings. The deal is valued at approximately $50.0 million.

Assistly helps small and medium enterprises and emerging businesses to develop and provide instant customer service solutions, with zero-touch operation.This new cloud-based solution will enable enterprises to manage service cases and engage with customers in real time over a range of channels – including Facebook, Twitter, Web chats, e-mail and phone – all from one, easy-to-use interface.

This acquisition is expected to add a critical dimension to CRM’s modern customer service management, with the help of cloud computing. In particular, the acquisition will enable the company to utilize Assistly's innovative technology and business model, as well as its Service Cloud, which will now enable even the smallest companies to become socially connected.

Moreover, the flexible pricing option adopted by Assistly is preferred by small and medium enterprises, as it provides the customers with the option of migrating to other Service Cloud products and services over time.

We are optimistic on the prevailing opportunities across the entire product line (Sales Cloud, Service Cloud, Platform and Collaboration) and believe that this new acquisition will enhance the service cloud portfolio that the company currently offers.

Moreover, we also expect Chatter to be a key driver of Salesforce.com’s enterprise license agreements. We remain encouraged with the acquisition of Radian6 as it will help the company tap the huge growth opportunity in media monitoring.

Moreover, Salesforce.com reported decent second quarter 2012 results. It also provided encouraging revenue guidance for the third quarter and full-year 2012 based on strong demand for its business software and customer additions. However, higher costs will likely offset revenue growth going forward, in our view.

We, however, caution investors regarding strong competition in the CRM application and cloud-computing space from the likes of Google Inc. (GOOG - Analyst Report) and Microsoft Corp (MSFT - Analyst Report), since they are also vying for government contracts at local, state and federal levels, especially for their online e-mail and other applications.

Currently, Salesforce has a Zacks #3 Rank, which implies Hold rating in the near term.

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