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Salesforce Allies with Twitter

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After making it big in the cloud computing business, Salesforce.com (CRM) recently shifted its focus to the social networking domain and allied with Twitter. As per the alliance, Twitter will provide its entire volume of public Tweets to Salesforce Radian6 customers.

The alliance is expected to help its enterprise customers analyze around 400 million Tweets generated daily, thus enhancing their decision-making process.

This alliance will help in processing the social conversations covering their products, brand and industry that facilitate effective business decision-making, which in turn will strengthen the company’s customer relationships. Customer behavior analysis has emerged as an important requirement in today’s business world and this collaboration is expected to cater to that need.

We believe that this is a natural progression for the company after it acquired Canada-based social analytics company Radian6 for $326 million in March last year. Radian6 has been successful in offering cloud-based services to companies, which help them to monitor users’ comments about their products on Facebook (FB), Twitter, YouTube and LinkedIn (LNKD), and other such social platforms.

Salesforce is always on the look out for technical collaboration or strategic alliances with different companies. A couple of weeks back, Salesforce entered into a fresh agreement with Accenture plc (ACN), which will help to strengthen its long-standing relationship with the IT company. The combined capabilities of both Salesforce and Accenture resulted in a number of management-oriented solutions that have helped organizations to achieve business excellence and cost optimization in the areas of customer service and support, sales force automation, and supply chain and human resources management.

Moreover, the recent acquisition of Buddy Media for approximately $689 million is another prudent move on the company’s part. Though this deal may temporarily result in lower margins and profit for the company, it will help Salesforce to tighten its grip in the social enterprise area, which is attracting the attention of major business enterprises across the globe.

We see continuous product launches and deal wins as positives. However, low-margin government deals, foreign exchange fluctuations and stiff competition from key players such as IBM Corp. (IBM) and Hewlett-Packard Company (HPQ) may challenge the growth prospects of the company to a certain extent.

Currently, Accenture has a short-term Hold rating, denoted by the Zacks #3 Rank.

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