Salesforce Enters Ecommerce Fray
September 27 2016 - 6:06PM
Dow Jones News
By Rachael King
Salesforce.com Inc. on Tuesday introduced a new e-commerce
service based on its $2.8 billion acquisition of Demandware Inc. in
July.
The Salesforce Commerce Cloud is intended to help customers set
up online storefronts and in-store tablets and kiosks, adding
commerce functions to the company's portfolio of software delivered
as a service over the internet.
Salesforce is best known for applications that help salespeople
track customer contacts and marketers plan campaigns.
The new service faces stiff competition from Oracle Corp., SAP
SE, and International Business Machines Corp., which have strong
digital commerce offerings, according to research firm Gartner
Inc.
Many larger companies have purchased on-premises commerce
software and hardware from these vendors. In contrast, the
Salesforce Commerce Cloud operates only as an online service.
Demandware focused mostly on sites for retailers and brands
targeting consumers. It counted more than 350 customers, mostly
larger retailers, before being acquired by Salesforce, it according
to Brent Thill, an analyst with UBS Group AG.
Salesforce, which claims over 100,000 customers, has said it is
looking to spur growth.
For Commerce Cloud to aid in that goal, Salesforce will need to
adapt Demandware's software to accommodate sales from one business
to another, said Gene Alvarez, managing vice president at Gartner.
For instance, the new service will need to tie in to corporate
procurement and purchase order systems, he said. It doesn't yet
have these features.
Moreover, Salesforce will need to convince some potential
customers to jettison systems they've already bought, Mr. Alvarez
added.
The world-wide market for digital commerce software will grow to
$5 billion in 2018 from about $3.8 billion in 2016, according to
market watcher International Data Corp.
By 2020, the U.S. business-to-business digital commerce market
is expected to top $1.1 trillion from $780 billion in 2015, a
compound annual growth rate of 7.7%, according to Forrester
Research.
Other experts see a short-term potential for Salesforce to
attract consumer-focused retailers smaller than those that
dominated Demandware's customer base of large retailers.
"The big opportunity is to broaden the scope of the solution to
address a larger pool of customers in the midmarket," said Mr.
Thill of UBS.
Salesforce.com plans to broaden the focus beyond consumer
retailers and big brands, said Stephanie Buscemi, the company's
executive vice president of product and solution marketing.
The Commerce Cloud will reinforce other Salesforce services,
said Ms. Buscemi. For instance, it will help users of the company's
Marketing Cloud target shoppers after they've abandoned an online
purchase, she added.
Write to Rachael King at rachael.king@wsj.com
(END) Dow Jones Newswires
September 27, 2016 17:51 ET (21:51 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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