Salesforce: software service with a smile

Salesforce, one of the world’s top software companies, has a bright future and is currently on sale.

Not too long ago, a company would buy software on a disc and install it on its own computers. These days, they rent their software on the internet, or in the "cloud". This is more secure and cheaper than maintaining hardware on the premises, while the software is automatically updated no more having to go and buy the latest version. This concept is called software as a service (SaaS), and one of the industry pioneers was Salesforce.

Founded in a one-bedroom apartment in 1999, it is now the world's largest pure-play SaaS vendor. Salesforce's SaaS fits into a broader approach called customer relationship management (CRM), which covers a company's relationships and interactions with customers and potential customers. The goal is to stay connected to clients, streamline processes, drive business growth and improve profitability. Salesforce was one of the first companies to offer SaaS CRM, and "CRM" is itsticker on the New York Stock Exchange.

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Salesforce (NYSE: CRM)
Share price$130.5P/E for 202047.8
Market cap$98.8bnNet cash/debt (31/07/18)+$0.2bn
Recent results20182019 estimate% change
Revenue$10.5bn$13.1bn (Salesforce figure)+25%
EPS$1.35$2.51 (MarketWatch figure)+86%
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Dr Mike Tubbs

Highly qualified (BSc PhD CPhys FInstP MIoD) expert in R&D management, business improvement and investment analysis, Dr Mike Tubbs worked for decades on the 'inside' of corporate giants such as Xerox, Battelle and Lucas. Working in the research and development departments, he learnt what became the key to his investing; knowledge which gave him a unique perspective on the stock markets.

Dr Tubbs went on to create the R&D Scorecard which was presented annually to the Department of Trade & Industry and the European Commission. It was a guide for European businesses on how to improve prospects using correctly applied research and development. He has been a contributor to MoneyWeek for many years, with a particular focus on R&D-driven growth companies.