Can, Inc. Stay Atop the Exploding CRM Market?

According to some new research, CRM is expected to remain a key business initiative for years to come, and the competition will be fierce.

Feb 16, 2014 at 12:00PM

Information technology execs may waver when it comes to purchasing big-ticket enterprise hardware and software tools, but there's one thing that virtually all companies are willing to pay for: CRM. Though the latest data from research firm Gartner forecasts a relatively flat 2014 after several years of explosive growth, CRM is still expected to be a $23.9 billion market this year, and will grow to over 50% $36.5 billion by 2017.

What's driving the CRM market? First and foremost is cloud technology. But utilizing the cloud to manage sales, marketing, and business initiatives is only part of the equation. Social media, mobile access, and incorporating big data analysis are all key components that IT gurus require of their CRM systems. And let's face it, some are better than others at delivering what the CRM market is demanding, and right at the top of that list is (NYSE:CRM).

Who are these guys?
When CEO and co-founder Marc Benioff started in 1999, out of his apartment no less, it was a revolutionary concept: providing access to software and services without the need for expensive and time consuming CD-ROM's, and huge investments in hardware. Essentially, implemented the cloud before there even was a cloud. It's no wonder then that Benioff's dream has become the industry's reality -- and is still leading the way.

You don't lead the market by standing still, and certainly isn't. Mobile, which was once a weak point in's arsenal, will, by most accounts, become another one of its strengths in the coming quarters and years. After failing in earlier attempts to make compatible with mobile devices, its new Salesforce1 solution appears to be the answer. Unveiled late last year at its Dreamforce gathering, Salesforce1 is now integrated with iOS and Android mobile devices, and could be the mobile answer has been searching for. It's still early, but it will be interesting to see how's mobile ambitions fare on Feb. 27's earnings announcement.

If Benioff and team's recent guidance for this year and next -- $4.05 billion in 2014 and $5.15 billion to $5.20 billion in 2015 – are any indication, is expecting big things and investors should, too.

The competition
It's not like has the CRM playing field to itself, there are some big players who'd like nothing more than to knock it off its pedestal. Microsoft (NASDAQ:MSFT) is one of the first that comes to mind, and its Dynamics CRM poses a serious threat to's CRM leadership position.

There were several reasons Microsoft's recently announced fiscal 2014 Q2 impressed, including growth in its devices and consumer unit. But just as telling, if not more so, was Microsoft's $12.67 billion in revenue from its commercial division, including a more than 100% jump in cloud-related revenues, which includes Dynamics CRM. The seamless integration of Dynamics with it wildly popular Office 365 is a natural for small and large businesses alike, and will have looking over its shoulder for years to come.

Oracle (NYSE:ORCL) is another big boy on the CRM block contending with Despite only so -so fiscal 2014 Q2 results, including flat overall cloud revenues, Oracle's CRM sales were a bright spot. According to Oracle CEO Larry Ellison, its cloud-based Fusion Salesforce Automation revenues jumped over 100% last quarter, and there's little reason to believe that growth is going to stop any time soon. Add in Oracle's enterprise solutions, and implementing big data into its CRM is a natural.

Final Foolish thoughts
At just under $38 billion in market capitalization, is just a blip on the radar compared to Oracle and Microsoft. But when it comes to the exploding CRM market, stacks up against anyone and everyone. If Gartner's forecast for the future of CRM is even close to being right, there's room for all the players in the game to continue growing. But it will be that leads the way, just as it always has.

Let's face it, every investor wants to get in on revolutionary ideas before they hit it big. Like buying PC-maker Dell in the late 1980's, before the consumer computing boom. Or purchasing stock in e-commerce pioneer in late 1990's, when they were nothing more than an upstart online bookstore. The problem is, most investors don't understand the key to investing in hyper-growth markets. The real trick is to find a small-cap "pure-play", and then watch as it grows in EXPLOSIVE lock-step with it's industry. Our expert team of equity analysts has identified 1 stock that's poised to produce rocket-ship returns with the next $14.4 TRILLION industry. Click here to get the full story in this eye-opening report.


Tim Brugger has no position in any stocks mentioned. The Motley Fool recommends Gartner and The Motley Fool owns shares of Microsoft and Oracle. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information