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Salesforce, WDAY Merge Product Lines

Zacks Equity Research

The world’s leading CRM platform provider Salesforce.com, Inc. (CRM) and Workday (WDAY), a leading provider of enterprise cloud applications for human resources and finance, recently announced the integration of their product lines to better support businesses.

The partnership will help Salesforce to standardize all its solutions for Workday applications and vice versa. The integration of Salesforce solutions with that of Workday Human Capital Management (:HCM), essential for analyzing performance and trends in customer relationships, will maximize service delivered to customers.

Additionally, the assimilation of Salesforce Chatter into Workday’s product line will provide greater security to customers and enable Chatter users to receive updates directly from Workday.

Moreover, Workday Financial Management users will be able to make faster decisions on the basis of the financial and operational performance data provided by Salesforce.

Salesforce reported revenues of $957.1 million in the second quarter of 2013, up 30.8% on a year-over-year basis. During the reported quarter, the company witnessed continued demand across all of its cloud solutions supported by a decline in attrition rate.

The higher number of deal wins were encouraging and so were the geographical contributions. Overall, the company’s diverse cloud offerings and the stronger spending projection by Gartner are positive.

Although, the company is growing reasonably in the cloud market, growth prospects have been tempered to a considerable extent by the renewed efforts of other tech giants such as Dell Inc. and International Business Machines.

Competition from Oracle Corporation (ORCL) and SAP AG (SAP), continued weakness in Europe, currency headwinds and an increase in investments could pose near-term challenges.

Currently Salesforce has a Zacks Rank #3 (Hold).

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