Please ensure Javascript is enabled for purposes of website accessibility

Salesforce.com Inc Throws Its AI Hat Into the Ring With Acquisition

By Tim Brugger - Apr 8, 2016 at 10:11AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The cloud-based customer relationship management king ups its AI game with another acquisition.

CEO Marc Benioff has made no secret of the fact that Salesforce.com's (CRM 1.62%) future will include comprehensive artificial intelligence (AI) capabilities to enhance the customer experience. Benioff's commitment to AI isn't new: He and Salesforce.com president Keith Block have been raving about its analytics cloud for nearly a year now. Deep learning, or AI, is a natural fit for Saleforce.com to assist its customers in utilizing the reams of sales and service data collected on its industry-leading CRM platform.

Salesforce.com fans may recall last summer when Benioff shared the news that its new analytics cloud was the fastest-growing product introduction ever. Benioff's conference calls are known for his over the top "rah-rah" feel, but when it comes to deep learning, Salesforce.com is doing a lot more than shouting from the rooftops.

Salesforce.com has confirmed its commitment to AI with yet another acquisition, in addition to aligning itself with some of the tech industry's biggest AI players, including Microsoft (MSFT 2.76%) and IBM (IBM 1.74%).

Image source: Salesforce.

The latest AI push
Salesforce.com recently acquired MetaMind, a relatively new AI research provider that, for the past year and a half, has been developing "state of the art deep learning technology to simplify, improve and automate decision making." As one of MetaMind's first investors, Benioff is intimately familiar with what it brings to the AI table.

MetaMind's deep learning technologies will extend Salesforce.com's existing AI capabilities. As it's done with prior acquisitions, Salesforce.com is shutting MetaMind down to existing and future customers. MetaMind's web users have until May 4 to utilize the technology, and recurring customers will lose access on June 4.

Salesforce.com intends to keep the folks at MetaMind working to further its "groundbreaking discoveries that advance our deep learning platform's accuracy and capabilities," but now advancements in its AI technology will be specific to the reams of data housed in Salesforce.com's marketing, sales, and service clouds. Financial terms were not disclosed.

The deal for MetaMind comes shortly after Salesforce.com wrote a check for another machine learning start-up, PredictionIO, in February. Benioff didn't share financial terms for the PredictionIO deal, either.

Running with the big boys
Salesforce.com has a long-standing relationship with Microsoft that has expanded over the last several years to include the seamless integration of software including Office 365 and Skype, among others. Microsoft, not surprisingly, also recognizes the potential of AI as the world becomes increasingly digital, and it's ramping up its own deep learning capabilities to add to its already impressive cloud capabilities.

How long before Salesforce.com and Microsoft partner on AI-related features and products? Neither Benioff nor Microsoft CEO Satya Nadella have confirmed such an arrangement, but with a successful partnership that spans several years, the two would make a powerful AI combination.

No speculation is needed in terms of Salesforce.com working with AI industry leader IBM. IBM recently acquired cloud implementation specialist Bluewolf, Salesforce.com's first consulting partner. Salesforce.com and Bluewolf began their long-standing relationship in 2001. IBM has also been busy building out its AI capabilities, largely via its cognitive computing wonder Watson and a litany of acquisitions that have totaled over $5 billion in the last year alone.

When the IBM-Bluewolf deal was announced, Benioff said, "The powerful combination of our strategic partners, IBM and Bluewolf, will help clients transform and demonstrate the growing client demand for our Customer Success Platform." The alignment with IBM via its Bluewolf deal isn't specific to AI development, but it will "extend IBM's analytics" leadership.

Salesforce.com doesn't need to work with the Microsofts and IBMs of the world to further its AI capabilities, as its string of acquisitions and fast-growing analytics cloud make clear. But as business customers begin to recognize the value AI brings to the data analytics party, comprehensive deep learning functionality will become a necessity, rather than a nicety. And Salesforce.com is actively positioning itself to garner a fair share of what is conservatively expected to become a $5 billion market in just four years.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

salesforce.com, inc. Stock Quote
salesforce.com, inc.
CRM
$165.10 (1.62%) $2.64
International Business Machines Corporation Stock Quote
International Business Machines Corporation
IBM
$139.27 (1.74%) $2.38
Microsoft Corporation Stock Quote
Microsoft Corporation
MSFT
$273.24 (2.76%) $7.34

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
344%
 
S&P 500 Returns
120%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/27/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.