Salesforce (CRM) Offers Wave: A New Analytics Solution
Enterprise cloud computing solutions provider, salesforce.com (CRM), announced the worldwide release of its new product at its software event, Dreamforce 2014. The cloud-based product – Salesforce Wave – is an analytics platform, which aims at fulfilling Big Data requirements. The company reportedly expects to get clients over to the new platform by Oct 20, 2014.
The new service from Salesforce enables companies to provide relevant information to their customers through email, mobile, social network and the web. The Salesforce Wave solution represents Salesforce’s first step into the data analytics space. We believe that the analytics platform will help Salesforce to boost its customer base and also increase the company's total addressable market (TAM).
Launching an analytics cloud will help the company shift focus from its core business area -- Customer Relationship Management (CRM) -- to Data analytics.
Data analytics has a greater momentum for sales as compared to customer-relationship management. According to IDC, the TAM for business-analytics software was $37.7 billion in 2013, whereas according to Gartner, the CRM market brought approximately $20.5 billion in revenue that year.
Wave’s cloud-based platform provides cloud-based Software as a Service (SaaS) applications, business intelligence (:BI) solutions and data warehousing. Now, with the new product featuring Wave’s platform, users will easily search any data source and discover new insights by plucking data from any source.
The Analytical Cloud is now available on Apple’s (AAPL) iOS mobile app. Leading data-driven companies such as Equinix, GE Capital and TriCore Reference Laboratories believe that this platform from Salesforce will help them reach out to their customers better.
The need for Big Data is becoming the buzz word in the technology sector. Demand is being further spurred by the mobile revolution that is taking over both customers and employees. The new solution, Salesforce Wave is a tool that facilitates this process of extraction of data and efficient storage, thereby leading to a quick and efficient decision-making process.
According to market research firm IDC, Big Data is expected to generate $16.1 billion in 2014, growing 6 times faster than the overall IT market. The firm also forecasts that the Big Data-related technology and services market will continue to grow at a 27% CAGR to $32.4 billion through 2017.
Per IDG, on an average, enterprises are expected to spend $8.0 million on Big Data-related initiatives and programs in 2014. We believe that this higher enterprise spending will be beneficial to vendors supplying Big Data solutions (software, hardware and services) in the long run.
Therefore, the company’s diverse cloud offerings and the stronger spending projection by research firms are positives, going forward. Salesforce’s strategic acquisitions and related synergies are expected to remain long-term positives.
We are encouraged by Salesforce’s growth prospects in the cloud. However, continuous R&D investments, cost increases and stiff competition from data-analysis and business intelligence vendors such as Microsoft Corp. (MSFT), SAP, Oracle Corp. and IBM Corp. (IBM) could pose challenges, going forward.
Currently, Salesforce has a Zacks Rank #3 (Hold).
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