Salesforce Makes a Move on Oracle and SAP

by Tom Taulli | March 15, 2012 1:33 pm

[1]Over the past decade, Salesforce.com (NYSE:CRM[2]) has leveraged cloud-computing to dominate the market for customer relationship management (CRM) software. This technology centralizes applications in off-site data centers, which means lower costs for customers as well as easy maintenance.

But to justify its $21 billion market cap, Salesforce needs to expand its reach. So at its Cloudforce conference today in San Francisco, the company announced[3] a new application to help companies manage their human resources (HR).

It’s certainly a huge market opportunity (hey, most companies have HR departments). But that category also has entrenched players like Oracle (NASDAQ:ORCL[4]) and SAP (NYSE:SAP[5]). Other cloud operators have also been in the market for some time, including NetSuite

(NYSE:N[6]) and WorkdDay (which is expected to come public soon[7]).

Then again, Salesforce is good at ginning up buzz — and landing big-time customers. And its HR offering has some promise. Called Rypple, it’s now seamlessly integrated with Salesforce’s CRM platform as well as Chatter, which is a Facebook-like social network for enterprises. The thinking is that Salesforce’s existing customers may be willing to give Rypple a try.

Yet it could still be a slog to get traction. SAP and Oracle have recently purchased cloud-based HR companies – such as Taleo and SuccessFactors — which will certainly help them lock in customers. Besides, when it comes to these types of applications, the purchase decision takes a long time because of the expense and disruption to existing in-house applications. So don’t expect an extra slug of revenue from Rypple any time soon.

Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of “The Complete M&A Handbook”[8], “All About Short Selling”[9] and “All About Commodities.”[10] Follow him on Twitter at @ttaulli[11] or reach him via email[12]. As of this writing, he did not own a position in any of the aforementioned securities.

Endnotes:
  1. [Image]: https://investorplace.com/wp-content/uploads/2011/11/Salesforce.jpg
  2. CRM: http://studio-5.financialcontent.com/investplace/quote?Symbol=CRM
  3. announced: http://www.bloomberg.com/news/2012-03-15/salesforce-unveils-human-resources-software-amid-oracle-contest.html
  4. ORCL: http://studio-5.financialcontent.com/investplace/quote?Symbol=ORCL
  5. SAP: http://studio-5.financialcontent.com/investplace/quote?Symbol=SAP
  6. N: http://studio-5.financialcontent.com/investplace/quote?Symbol=N
  7. expected to come public soon: https://investorplace.com/ipo-playbook/get-ready-for-these-5-0hot-cloud-ipos/
  8. “The Complete M&A Handbook”: http://goo.gl/aLNDk
  9. “All About Short Selling”: http://www.amazon.com/All-About-Short-Selling/dp/0071759344/ref=sr_1_1?s=books&ie=UTF8&qid=1302184310&sr=1-1
  10. “All About Commodities.”: http://www.amazon.com/All-About-Commodities/dp/0071769986/ref=ntt_at_ep_dpi_10
  11. @ttaulli: https://twitter.com/ttaulli
  12. email: mailto:tom@taulli.com

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