Channel Checks Increase Confidence in Salesforce.com (CRM)- Piper Jaffray

Katherine Egbert, Software Analyst at Piper Jaffray, published a note on Salesforce.com (NYSE: CRM) that stating that channel checks show increasing health for enterprise sales, no new price pressure, a strong partnership model, continued focus on the Sales Cloud and increasing integration between the non-Sales offering.

Five years ago, senior management at Salesforce mandated that all deals involve a partner. There is generally a 1:1 relationship between the cost of the license and the professional services that go along with a new cloud implementation. Some of the larger systems integrators now have 100’s of employees and contractors dedicated to their Salesforce practice, usually with front-end sales domestically and delivery/development performed remotely i.e. offshore. Consequently, Salesforce.com is a good example of a company that analysts can derive a lot of information from the channel.

While nearly all customers complain about the high price of using Salesforce’s various cloud solutions, price is often used a negotiating tactic, rather than a reason to switch vendors or discontinue use. The cloud is still viewed by most CIOs as more cost effective than maintaining software on-premise, although the cloud is not cheap.

Reiterated Overweight rating and no changes to estimates. The company is due to report on November 18th.

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 $77.71 yesterday.

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