Showing posts with label Salesforce. Show all posts
Showing posts with label Salesforce. Show all posts

Wednesday, 13 January 2016

The Cloud Complexity Challenge

Growing acceptance of cloud computing quickly is becoming a double-edged sword for the leading players in the SaaS, PaaS and IaaS marketplaces. As a broader set of customers adopts cloud-first strategies, even the biggest cloud players are being challenged to scale their operations to keep pace with escalating customer demands without becoming too complex for customers to easily utilize their solutions.

The good news is that every market research survey clearly indicates that corporate executives have become comfortable with the idea of moving various parts of their business operations to the cloud. In fact, many increasingly are becoming convinced that utilizing cloud resources is not only a better alternative than investing in traditional data centers and on-premises software, it's an essential ingredient to meeting their customer expectations and remaining competitive.

However, as more organizations move more of their operations to the cloud, they are putting more pressure on their cloud providers to fulfill the promise that the migration process will be relatively painless and the business benefits will be easy to measure.

Although it is relatively easy to meet these expectations initially, it becomes increasingly challenging as the use cases become more complicated and involve a wider array of applications, systems and data sources, especially in an era when time to market (i.e., speed) is a primary measure of success.

Salesforce's Rapid Growth

The clearest example of a cloud company facing these issues head-on is Salesforce.com. It's hard to suggest the company is suffering from its own success as it continues to defy the law of big numbers by posting impressive quarterly results a regular basis.

The company announced in its most recent quarterly financial results 24 percent year-over-year revenue growth and deferred revenue up 28 percent YoY. As a result, Salesforce raised its FY16 revenue guidance to $6.65 billion and its FY17 revenue guidance to $8.1 billion.

Read More: http://www.ecommercetimes.com/story/82964.html

Wednesday, 18 November 2015

Cloud Cover Remains Over Salesforce.com

As Salesforce.com Inc. moves from Internet upstart to technology stalwart, investors should get their heads out of the clouds.

The cloud-computing pioneer specializing in customer-relationship software has a history of managing Wall Street’s expectations appropriately. It has met or exceeded analysts’ profit and revenue forecasts in each of the past six quarters.

But clearing that bar and making money are two different things. Turning an annual profit has been elusive for Salesforce recently; operating expenses have grown faster than revenue in each of the past four fiscal years.

Other metrics, such as free cash flow and the company’s so-called billings, may offer clues to how investors will react to Salesforce’s fiscal third-quarter results Wednesday. With the stock up over one-fifth this year, and trading at a pricey valuation, any misstep could be punished.

Wall Street expects Salesforce’s billings, a measure of its top line that adds revenue plus any change in deferred revenue, to gain 19% to $1.5 billion in the third quarter. Billings are important, particularly for cloud companies, because they are typically viewed as a forward-looking measure of future revenue.

Meanwhile, free cash flow is expected to hit $1.16 billion this fiscal year, up from $883 million last year and $576 million two years ago. But stock-based compensation has hovered around 45% of free cash flow in recent years. Should the stock—which has doubled in three years and risen tenfold over the past decade—suffer any meaningful decline, Salesforce will find it harder to pay employees with stock and options, thereby shifting more compensation to cash.

Salesforce’s price is 37 times the next 12 months’ projected free cash flow, according to FactSet, significantly pricier than tech behemoths Oracle Corp., SAP SE and International Business Machines Corp. Over the past five years, that premium has expanded even as Salesforce’s revenue has quadrupled and those three companies have seen their top lines shrink by nearly 5% collectively.

Read More : http://www.wsj.com/articles/cloud-cover-remains-over-salesforce-com-1447791762