Salesforce.com (CRM -1.10%) is one of the largest enterprise software companies, and it's led the customer relationship management (CRM) industry for eight consecutive years. As businesses continue to struggle with macroeconomic headwinds related labor shortages and supply chain disruptions, staying on good terms with customers will be crucial.
In this Backstage Pass video, which was recorded on Nov. 30, 2021, Motley Fool contributor Trevor Jennewine explains why Salesforce looks like a smart long-term investment. He also highlights why the holiday season could be a near-term catalyst for this software company.
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Trevor Jennewine: Salesforce specializes in customer relationship management, or CRM. Its Customer 360 platform is a suite of applications for sales, customer service, marketing, and commerce. It also includes tools for analytics, data integration, low-code application development. So it really is this end-to-end solution. The goal is to give businesses the tools they need to attract leads, convert those leads into paying customers, and then build lasting relationships with those customers.
Additionally, Salesforce has this platform called Einstein, which is essentially an artificial intelligence layer that supercharges all of its other applications. For instance, Einstein help sales agents forecast conversion rates and prioritize the most promising leads, so it drives efficiency there. It helps commerce teams personalize the buyer experience and make relevant product recommendations on an e-commerce storefront. And I think that capacity for innovation is one of Salesforce's strongest assets.
They were a pioneer in modern CRM. They were one of the first companies to deliver software from the cloud. They jumped on artificial intelligence quickly. Their platform even supports blockchain technology. They continue to stay at the cutting edge of these technologies. I think that's important. I mentioned in an earlier question, the CEO, Marc Benioff, he founded the company back in 1999. This would be a company where if Marc Benioff suddenly left, I would be concerned about Salesforce. If you were watching Beat and Raise show in the previous hour, the company actually named Bret Taylor a co-CEO. He will be working alongside Marc Benioff, and I think that's a great succession plan. Brian Withers and I were talking about that. It's good to see the company planning for the future.
One of the reasons I really like Salesforce, and I think they could do well during the holiday season, is that their software is relevant across virtually every industry. Building those customer relationships is important no matter of what you're selling or what industry you're in. Maintaining a strong relationship with your customers is important. I think -- given the current macroeconomic headwinds with supply chain difficulties, and labor shortages, and inflation, all of those things that may be headwinds for consumers -- I think maintaining those relationships is even more important than it normally is. And Salesforce is the clear leader here. The company has 19.5% market share in the CRM space. That is more than the next four competitors combined. Just a real dominant company.
I mentioned they have that innovative, founder-led management team. This is another company with a strong workplace culture. If you look at Glassdoor, 89% of employees would recommend the company to a friend, 96% approve of the CEO, Marc Benioff. I think that speaks very highly of the type of workplace environment they've created.
The financial performance is consistently impressive. Over the past year -- this is through the second quarter, this does not include the results that Salesforce just released two hours ago --. but through the second quarter, the company's revenue was $23.5 billion, up 21%. They generated $5.5 billion in free cash flow; that was up 57%.
Just to cap all that, Salesforce is, in terms of enterprise software companies, it is the fastest-growing enterprise software company in history. It was the first to reach $5 billion in annualized revenue. It was the first to reach $10 billion. It recently became the first to reach $20 billion, and Benioff has said the company will reach $50 billion, I believe, by 2026. If that happens on that timeline, it will also be the first company to achieve that milestone. It will be the fastest company to achieve that milestone. An enormous company, but I still think there's plenty of potential here for shareholders, and I certainly think the holiday season could be a short-term catalyst.
