Salesforce's Cloud Grows Bigger with Demandware Buy

The $2.8 billion acquisition will help Salesforce stretch its cloud into digital commerce.

Customer relationship management (CRM), the Internet of Things (IoT) and now e-commerce….

Salesforce, the leading business software-as-a-service (SaaS) provider, is now expanding into cloud-based digital commerce. The company announced today that it is acquiring Demandware, a Burlington Mass. e-commerce company, for $2.8 billion or $75 per share. The companies expect the transaction to close by July 31.

Demandware's customers include Design Within Reach, Lands' End and L'Oreal, among several other online retailers. For Salesforce, the deal represents a major expansion of the company's CRM platform into what will be called the Salesforce Commerce Cloud.

"Demandware is an amazing company – the global cloud leader in the multi-billion dollar digital commerce market. With Demandware, Salesforce will be well positioned to deliver the future of commerce as part of our Customer Success Platform and create yet another billion dollar cloud," said Marc Benioff, CEO of Salesforce, in a statement.

Salesforce Commerce Cloud will enable its CRM customers to access a Demandware-powered enterprise e-commerce platform. Demandware customers, in turn, will be able to access Salesforce's analytics, sales, service, marketing and IoT solutions to provide personalized customer experiences, the companies envision.

"When the transaction closes, Demandware will become an integral part of the Salesforce world-class Customer Success Platform," wrote Demandware president and CEO Thomas Ebling in a blog post. "Demandware customers will be able to leverage the platform to deliver a more comprehensive, personalized consumer experience throughout the entire customer lifecycle, while Salesforce customers will gain access to the Demandware leading enterprise cloud commerce solution."

The deal comes as Salesforce's lead in enterprise SaaS is facing increased competition from the likes of Microsoft, Adobe and SAP.

A recent report from Strategy Analytics revealed that Microsoft's business cloud software revenues grew 70 percent last year, compared to 21 percent for Salesforce. Adobe and SAP also notched impressive gains of 55 percent and 73 percent, respectively.

Salesforce isn't standing still, however. In addition to inking deals like the Demandware acquisition, the company is eyeing the fast-growing market for cloud-based IoT solutions. Last month, the company made waves when it was reported that its Salesforce IoT Cloud service would be operated on Amazon Web Services (AWS).

The service uses Thunder, Salesforce's real-time event processing engine, to feed IoT data into Salesforce's business software platform, enables customers to integrated the insights gathered from connected devices into their customer management and engagement efforts.

Pedro Hernandez is a contributing editor at Datamation. Follow him on Twitter @ecoINSITE.




Tags: cloud computing, Salesforce, digital commerce, Demandware


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