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Salesforce.com Inc. has the e-commerce market in its sights. The cloud giant jumped into the ring this morning after signing an agreement to acquire Demandware Inc., a publicly-traded provider of online retailing software, for about $2.8 billion. The sum breaks down to $75.00 per share, which represents a generous 56.3 percent premium over the stock’s Tuesday closing price.
In exchange, Salesforce gains the Demandware Commerce Cloud, a managed automation suite that promises to streamline every major aspect of digital selling. Retailers can use the platform to create custom online storefronts, have the display tailored for every visitor based on their buying preferences and launch promotions during busy shopping periods. The functionality is complemented by a store management component that extends the value proposition to a company’s physical locations.
The platform’s expansive feature set has helped Demandware maintain sales growth of more than 30 percent sales growth for 10 quarters now, according to data from Reuters. In total, Salesforce expects that the deal will add $100 million-$120 million to its annual revenue by 2017, though this number will likely increase significantly once the outfit’s offering is fully integrated into its portfolio.
Marc Benioff’s firm plans on making the Demandware Commerce Cloud interoperable with every major component of its existing service lineup. The goal is to let retailers easily sync customer data collected through the platform to their Salesforce.com deployments and then incorporate the information into their marketing campaigns. The company also hinted of plans to add integration with its managed analytics tools, which would facilitate more advanced activities like uncovering new customer buying patterns.
The functionality should enable Salesforce to level the playing field against rivals such as Oracle Corp. and SAP SA that already have a well-established presence in the e-commerce world. It will be especially appealing retailers that already use its cloud platform to manage their customers, which constitute a significant portion of the market.
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