Are any of you invested in CRM (or following it)? I became a bit worried after the last quarter when earnings, bookings, and guidance were disappointing. Then, a week ago, HP moved from CRM to Microsoft. I know that CRM dominates its field, and is introducing AI integrated in its programs (“Einstein”), but I’m still concerned. Do any of you have any thoughts either way?
Saul
Saul - I didn’t even know Msoft offered CRM. Almost every CRM play in my industry is either SFDC or an SFDC based software app. I don’t think they have lost their mojo. Jon might be the best placed SFDC expert to comment.
Ant
Hi Saul,
I sold out of my CRM position on the 6th
Frank
I never did have a lot of conviction on this one.
Bought @ $77 back in June and sold @ $75
Not so good on my part. …but I put the money elsewhere and have since gained back what I lost.
Are any of you invested in CRM (or following it)? I became a bit worried after the last quarter when earnings, bookings, and guidance were disappointing. Then, a week ago, HP moved from CRM to Microsoft. I know that CRM dominates its field, and is introducing AI integrated in its programs (“Einstein”), but I’m still concerned. Do any of you have any thoughts either way?
Saul,
Even though this article is several months old, I found it helpful. Seems it has been very accurate (perhaps prescient) thus far.
http://www.crmsearch.com/crm-market-share.php
My take is that this picture hasn’t actually changed much. Salesforce is #1 and growing, MSFT is growing toward being #2, and SAP and ORCL are languishing.
Sure the HP deal is a win for MSFT, but that is exactly in line with what is/was expected. Salesforce has had plenty of wins, too. I’m not particularly worried, but I’d love to hear what others think too.
Thanks for asking,
Bear
Hi Saul.
I have no position in CRM, but I do follow the industry. Here is what I wrote back in July about Microsoft’s successful bid to buy LinkedIn (winning a bidding war that included CRM as a participant).
All of the companies mentions – Microsoft, Salesforce, Facebook, Google – would have been immensely better off had they won this bidding war. Adding a true “professional network” and the associated data to a CRM (MS Dynamics, Salesforce) or a community platform (Facebook, Google+) would instantly add value.
Imagine using a CRM in a sales organization, and as you make a call, you can pull up the LinkedIn profile within the CRM software. Or how much more robust Google+ would be if it could step out of the shadows of Facebook and position itself as the Professional Network… essentially becoming an instant rival to Microsoft’s Skype for Business.
But the clear winner is Microsoft, which had all the pieces to complement LinkedIn. If you use Dynamics as your CRM, Skype for Business as your unified communications platform, an Exhange/outlook as your email/calendar solution, LinkedIn profiles will work seamlessly between those environments, tying everything together and adding a rich layer of information on each person you might contact. Heck, even the Office 365 suite will have tie-ins to LinkedIn… imagine auto-generated ‘author’ pages on every PowerPoint slide deck taken directly from your LinkedIn bio, or footers on every word doc with a link to your LinkedIn profile. The integration points are endless, and range from subtle to profound. Give Microsoft credit for this one. In five years, I think this acquisition will prove to be a real difference maker.
I really believe that Microsoft will begin take serious market share away from CRM once it starts to roll out the integration with LinkedIn. It is a highly competitive business, and Salesforce is a good product, but MSFT has such a HUGE entrenched business base that it has an integration advantage going forward. The market for this kind of product is very fluid right now, and the valuation of CRM as a company is insane, even after adjusting for recurring revenues. If MSFT does succeed even remotely, that valuation will tumble.
Just some thoughts in response to your question.
Tiptree, Fool One guide, no position in CRM or MSFT. Long FB and GOOG. Formerly long LNKD.
Thanks so much to all of you who responded to my question. Continuing to welcome more comments if anyone has them.
Saul
I was thinking about investing in Salesforce, so thank you for the insights here. Now I think I’ll keep waiting and seeing.
Microsoft has a way of selling a lot of their stuff, despite that stuff often being second-rate at best.
I can offer an anecdotal data point. I’m an executive at a medium-sized company in the defense aerospace sector and we recently chose Microsoft Dynamics as our CRM platform. We evaluated several CRM products and the final choice was between Salesforce and MS. We went with MS because of integration with our existing IT enterprise and tighter security.
Chris
My company uses Microsoft CRM as well FWIW.
Our IT department stated it allows for more flexibility around specific business than Salesforce.
However, I don’t want anyone to glean anything from this. My company could be using that to hide the fact they decided to use Microsoft based on price.
A.J.
We evaluated several CRM products and the final choice was between Salesforce and MS. We went with MS because of integration with our existing IT enterprise and tighter security.
Mind if I was what your ERP system is? I support SFDC but never used MS Dynamics so curious what you were integrating it with and why your company thought it was easier to do if you happen to know.
Microsoft has me very concerned as competition. Not because of any specifics of this industry, but because of my general experience with how Microsoft is viewed in corporate environments:
Microsoft has both a long legacy in corporate environments and generally good integration across corporate products. They are frequently no longer the best choice but the fact that both IT personnel and management are familiar with their products mean it is very hard to convince established companies to consider other products. This also means Microsoft products are often the first considered when these companies look for a new tool. This has been slowly changing since the emergence of OSX, Linux and cloud-based software as viable corporate solutions but I still see this pattern playing out in corporate environments.
Just my experience. YMMV.
This has me very wary any time I see Microsoft as competition for a company I am evaluating for investment.
That said, CRM does seem to have a good product, a good business model, a good reputation and lots of room for growth. I am not yet certain if I trust management, but I can’t point at anything obviously negative either.
All this has me feeling very neutral on CRM as an investment. I have a small position right now, but I don’t see any compelling reason to keep it if a better opportunity comes up.
Microsoft has me very concerned as competition.
It has me more interested to look at Microsoft. I’v never compared the SFDC to MS Dynamics platforms but looking at the basic price, MS seems to be $10 cheaper per user.
SFDC seems to be a lot more powerful in options but costs a lot more to utilize.
Standard MS Professional Price: $65 per user
Standard SFDC Professional price: $75 per user
But the most popular flavor of SFDC is Enterprise version, not professional that jumps to $150 per user per month
But here is were MS starts to get interesting, they have an ERP systems as well as communication systems. They may finally start to get the return on their purchase of Skype.
We are using Skype for all our meetings as a conference provider. Now longer using Webex or other Call Bridges for all participants to dial into.
When I schedule a meeting that will involve a conference call through Outlook, I click to add Skype, it copies a link and dial-in information to the meeting for everybody to join.
They can click the link and launch Skype of Business or dial in with a phone to a conference code.
It has not been without some issues but savings over previous solutions has been quite large.
I believe it is even possible to implement Skype as the corporate phone system.
I’m convinced. Thanks to all of you for all the help. It’s decided me to gradually deploy my money in CRM into other choices as they come up. I really appreciate all the help.
Saul
As I’ve stated previously on these boards, I’ve never really gotten the valuation of Salesforce: http://discussion.fool.com/questions-about-salesforce-crm-323435…
That’s probably mostly a failure on my part to properly understand and value deferred revenue though, so don’t take that as a knock on Salesforce.
I did go long Microsoft this past summer however. After seeing how they won the LNKD sweepstakes against Salesforce, I thought it was a fair bet that their cash hoard might come in handy again in future bidding wars. I like Microsoft’s CEO, balance sheet, and their growth potential. FWIW, Hochfeld likes MSFT too. It just seemed like a safer bet on the cloud with plenty of upside to boot.
I also wonder if CRM’s AI platform Einstein can really compete with the big boys’ AI platforms in this space like MSFT, GOOGL, AMZN, etc. Maybe it can. Not saying it can’t. But it just struck me as quite the underdog in the market and something I wasn’t willing to bet on without understanding their valuation better.
Matt
Long AMZN, GOOGL, MSFT
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