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CEO Benioff expects Salesforce to overtake SAP in enterprise applications market

CEO Benioff expects Salesforce to overtake SAP in enterprise applications market
Photo Credit: Reuters
31 May, 2021

Global CRM (customer relationship management) major Salesforce’s CEO Marc Benioff believes the company will soon overtake ERP (enterprise resource planning) giant SAP as the world’s number one enterprise applications organisation. 

“We don't really talk so much about SAP since they mostly exited the CRM market so many years ago. But I'll tell you that it's awesome to see not just be No. 1 in CRM, but yes, we're going to be the No. 1 enterprise software applications company in the world passing SAP. This is a moment," Benioff said during the company’s recent Q1 earnings call.   

According to a July 2020 report by market research firm IDC, as of the end of 2019, the top 5 enterprise applications vendors were SAP with a market share of 7.7% followed by Oracle with 5.1% and Salesforce with 5%. Intuit and Microsoft came in at fourth and fifth places with 3% and 2.1% of the market share respectively.  

Salesforce plans to further bolster its enterprise applications portfolio with the acquisition of business communication platform Slack for $27 billion by next quarter.  The intent for the acquisition was first announced in December last year.   

For the first quarter 2022, ended April 30, 2021, Salesforce reported revenues of $5.96 billion, up 23% in the corresponding quarter last year. “We had the best first quarter in our company’s history,” Benioff said in a statement.   

“With incredible momentum throughout our core business, we’re raising our revenue guidance for this fiscal year by $250 million to approximately $26 billion and non-GAAP operating margin to 18 percent. We’re on our path to reach $50 billion in revenue in FY26,” he added. 

The bulk of the revenues were through its subscription and support services, which accounted for $5.54 billion out of $5.96 billion.   

Salesforce recent buys figured in the latest earnings report. While Seattle-based BI firm Tableau Software, clocked revenues of $394 million, an increase of 38% from a year ago, integration software company MuleSoft saw revenues rise by 49% to $380 million.   

Salesforce acquired Tableau in August 2019 for $15.7 billion and MuleSoft in May 2018 for $6.5 billion.  

The CEO also offered his condolences to the lives lost in India, “We just want to let everybody know that our hearts and prayers are with all of our Ohana (Family in Hawaiian) in India. They're on our mind every day, and we're so sorry for everything that they are going through,” Benioff said.