Salesforce Strikes Cloud Partnership With HP
Salesforce.com is having sort of a busy day. First there’s the big Dreamforce conference that it’s holding in San Francisco. Then there was the news out of that conference, starting with a big new platform, then some acquisitions, and a potentially significant partnership with computing company Hewlett-Packard.
To top it all off, it’s also the day that Salesforce reported quarterly results. So let’s handle that first.
For the third quarter, Salesforce reported non-GAAP earnings per share of nine cents, which was in line with the consensus view. It also reported its first billion-dollar quarter ever, hitting sales of $1.08 billion, slightly ahead of the consensus which called for $1.06 billion.
Its outlook for the fourth quarter was slightly off the consensus. Salesforce said it expects to report non-GAAP earnings of five cents to six cents a share, slightly below the consensus of seven cents. And for the 2015 fiscal year (it has one more quarter to go in its fiscal 2014), it said it expects revenue of $5.15 billion to $5.2 billion, which is more or less in line.
Salesforce shares fell by three percent during the regular trading session to $55.51 a share, and fell by an additional one percent in after-hours trading. What shareholders probably didn’t like was the 38 percent rise in operating costs and 50 percent surge in research and development costs.
So that’s earnings. Now the news.
First, there’s the partnership that Salesforce announced with HP. More details will be forthcoming tomorrow when HP CEO Meg Whitman will appear onstage with Salesforce CEO Marc Benioff in a big keynote address at Dreamforce, but the plan calls for Salesforce to create and manage within its data centers something called a “Salesforce Superpod” that runs on HP’s converged infrastructure, which is a combination of its servers and networking gear. The first customer? Why, HP itself, which was once Salesforce’s single biggest customer, until the government of Japan took the honor.
The two companies will jointly market what will be considered a premium offering for Salesforce’s biggest customers. Customers who choose the Superpod option will get a dedicated instance of Salesforce all their own, where most customers have their Salesforce installation running on shared infrastructure.
Earlier in the day, Salesforce announced Salesforce 1, a revamped version of its mobile app for tablets and smartphones. One of the big complaints about Salesforce has been that it wasn’t created from the ground up for mobile use. Since its primary users are salespeople who are constantly on the road and who tend to use their mobile devices more than their PCs for the service, going longer on mobile is probably a good bet.
Finally, Salesforce made another acquisition today, picking up Cloudconnect for an unspecified price. It will fold the company into Heroku, its cloud based application development platform. Expect more details tomorrow.
And since today was earnings day, it necessarily follows that Benioff was on CNBC again, fielding questions from his favorite TV host, Jim Cramer, who was in San Francisco for Dreamforce. During their chat, Benioff revealed a new partnership with Philips on its health care gear. He also talked about how GE is a happy customer and partner.