Salesforce is democratising complex computing
The global enterprise software market currently generates approximately $200bn in annual industry revenue, just 13% of total IT expenditure.
We believe spend will grow at a CAGR of 12% through to 2022 as software gradually replaces legacy infrastructure.
Meanwhile, the confluence of cloud computing with emerging technologies, such as artificial intelligence and the Internet of Things, is democratising complex computing workloads, making them more accessible to companies across all industries.
A pioneer in cloud computing technology, Salesforce has redefined its core market, CRM software, and established a dominant leadership position in enterprise software.
The company’s platform provides tools that enable companies to drive innovation, efficiency and flexibility within their business.
Due to its subscription-based business model, 95% of Salesforc's revenues are recurring, meaning the company has a predictable and defensible revenue stream.
Salesforce's scale and technological breadth provides ammunition for the company to capture market share and expand reach. Recently, the company has underperformed peers. Shares now trade at a discount to closest peers Adobe and Splunk, despite a far superior growth profile.
We view the recent contraction in valuation as an attractive entry point.