Accounting Solutions from Salesforce

• By Zacks Equity Research
• On 2:42 pm EDT, Wednesday September 30, 2009

Salesforce.com (NYSE: CRM - News) continues to capture the headlines. The web-based software maker and a player in the "cloud computing" space now ventures into the business of selling accounting software in collaboration with a Dutch company.

Salesforce has set up a company named FinancialForce.com in association with Unit 4 Agresso (UNI4), the parent company of financial software specialist CODA, that sells accounting software. Both the companies will invest in FinancialForce.com, which in turn will use CODA’s cloud accounting application previously known as CODA 2go and will deliver finance and accounting solutions in the cloud.

This brings Salesforce to an area where the company has not ventured before. This new accounting application is expected to provide finance professional and CFOs with better efficiency and confidence to perform complex accounting operations. Both Salesforce and non-Salesforce customers will be able to use this application through FinancialForce.com.

On the other hand, Salesforce is expected to face tough competition from established players like Microsoft Corporation (NasdaqGS: MSFT - News), Intuit Inc. (NasdaqGS: INTU - News) and Sage Group Plc (NasdaqGS: SGE - News), which sell accounting software to Small and Medium Business (SMB) customers.

We clearly see that cloud computing is an area where the company is making progress at a very fast pace. Recently, the company’s cloud computing applications were selected by the General Services Administration’s (GSA) cloud computing storehouse named Apps.gov. This online cloud computing site introduced by GSA will help US government organizations to buy and use the cloud computing applications already agreed upon by GSA.

This apart, the company introduced the Service Cloud 2, an enhanced solution to customers, including Salesforce Knowledge, Salesforce Answers and Salesforce for Twitter. The "Contact Manager," a new edition from Salesforce.com, provides the essential tools needed to manage business contacts and customers in the cloud, and is mainly introduced to cater to the needs of the SMB customers.

Through this new product introductions and innovations, Salesforce.com is slowly but surely enhancing its reputation in the cloud computing space. Although the intention is there, we believe that the company has to overcome hurdles to achieve success. Competition is intense as major technology players like Google Inc. (NasdaqGS: GOOG - News), International Business Machines (NYSE: IBM - News) and Oracle (NasdaqGS: ORCL - News) have realized the business potential of this segment.

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