Checks Indicate Strong Q4 Finish for salesforce.com (CRM); Partners Take to New Offerings

January 17, 2013 11:10 AM EST Send to a Friend
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salesforce.com, Inc. (NYSE: CRM) is comfortably in positive territory Thursday following comments issued by FBR Capital Markets earlier.

FBR noted that recent checks indicate positive feedback from partners. The data hints that deal momentum is still robust and newer salesforce products are driving more new deals.

Partners belong in three tiers: platinum, silver, and gold. FBR noted that the partners were relaxed into the final two weeks of the quarter. Hiring salespeople and consultants was also key.

FBR notes that several said, "head count is up from 30% to 100% year over year, and this greater distribution capacity and a broader product set are driving bookings growth ranging from 30% to 50% year over year."

Newer products were also taking hold. Sales Cloud offerings now accounting for 60 percent to 80 percent of new deals and Service Cloud at 20 percent last year. Those numbers have shifted to 50 percent for Sales Cloud, 30 percent for Service Cloud, and 20 percent for Platform and Marketing (newer offerings). FBR said, "In 2012, channel partners stuck with the proven winners: Sales and Service Cloud, forcing the direct sales team to carry the load elsewhere. Partners go where the money is, and with the newer products driving more deals, their focus has followed."

Having a dedicated sales team for Service Cloud also increased adaptation. salesforce applying the same formula with Marketing Cloud is driving interest there. FBR stated, "we expect as these reps become more productive, this will turn RFIs and RFPs into closed deals in CY13."

Quarter-to-date, salesforce has processed about 56 billion transactions, up 58 percent from the prior year. Transaction growth is strongly correlated to subs and support revs growth. FBR sees implied billings growth about 200 basis points above the consensus.

salesforce last reported quarterly results on November 20th, hinting at a late fourth-quarter 2013 report from the firm. The company has topped analyst EPS expectations over the last nine consecutive quarters.

For an analyst ratings summary and ratings history on salesforce.com click here. For more ratings news on salesforce.com click here.

Shares of salesforce.com closed at $169.64 yesterday.


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