|From: kyleLennon (Rep: 0)||Date: 03/26/2018 09:44|
|Forum: salesforce - Msg #752||Thread #673999638 (Rec: 0) |
|The acquisition of MuleSoft by Salesforce for around $6.5 billion is the largest in Salesforce’s history. |
This may be expensive, but it’s strategic. It enables CRM to compete with its chief rivals such as Microsoft Corporation and Oracle Corporation.
How so? With its integration capabilities, Mule Soft can help Salesforce migrate competitor workloads to the Salesforce platform. A particular target for this effort is Oracle. While Oracle might have neglected its Marketing Cloud acquisitions, Salesforce is ready to take that business away from it.
Mule Soft has manifested rapid growth through a 58% year-over-year surge in its revenue in 2017. The integration software maker has renowned brands as its customers (e.g., Coca-Cola, Mc Donald’s and Barclays).
Salesforce’s revenue will increase immediately after the acquisition, but not materially. But this aggressive step will help CRM achieve the $20B target by 2022.
How should you react as a Salesforce investor? The acquisition should not fundamentally change your thinking. Although expensive, it also has a lucrative upside.
According to Finstead research, CRM’s average price target is comparable to its current price.
Salesforce's long-term growth potential is evident from its constant effort in business expansion through strategic acquisitions and investments.
Over the last year, CRM returned 50.93%. This return is higher than Application Software sector (31.82%), Technology industry (22.52%), and S&P 500 (14.47%) returns.
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