Salesforce.com added more marketing power to its arsenal today with the purchase of ExactTarget for $2.5 billion. It is the company’s largest acquisition to date, second to Buddy Media, which it bought last year for $689 million. In 2011, the company purchased social-monitoring platform Radian6 for $276 million in cash plus additional stock.
The $3.5 billion in acquisitions points to the high costs for Salesforce.com as it makes an aggressive push into the marketing department.
ExactTarget puts Salesforce.com into the email marketing business. The company also offers social and mobile marketing capabilities, as well as a marketing automation platform.
The deal follows Salesforce.com’s announcement last month of Social.com, which was distinct from the social media ad campaign capabilities that it gained with its acquisition of Buddy Media. More so, Social.com pulls data from a customer’s CRM environment to craft targeted campaigns. With Radian 6, the expectation is that companies can also get a view of the social stream with its CRM data. With ExactTarget, Salesforce.com adds an email-marketing platform that it can use with Social.com.
Salesforce.com lacks a true marketing automation platform. ExactTarget does list marketing automation as a capability, but it does not rank as a leader in the category, at least according to Gartner’s magic quadrant.
If Salesforce.com does wish to push deep into lead management, it will need to either invest heavily in its own development or acquire a company, which will bring another hefty price tag. Last month, Marketo, a marketing automation leader, had a successful initial public offering. It opened at $13 per share. Today it is trading in the $22 range with a market capitalization of about $812 million. Eloqua, the other leader in the category, sold to Oracle late last year for $871 million.
Salesforce.com has established a capability in developing an app ecosystem with its acquisition of Heroku and the development of its AppExchange. Its CRM platform is now the industry leader. Expanding into the marketing suite fits into its core strength. The question is how expensive it’s going to be to appeal to the ever more powerful chief marketing officer.
ParStream and Panopticon are partnering to offer data analytics and data visualization by integrating their respective platforms.
ParStream offers an in-memory analytics technology that offers sub-second response. Panopticon is known for its visual analytics and in-memory engine that can push out graphics in an event stream.
ParStream has $5.6 million in Series A funding from Khosla Ventures. It has much to benefit from the Panopticon deal if nothing more than for the markets that will open up. Founded in 1999, Panopticon has an established presence in such markets as financial services and the telecommunications industries. Its longevity stems from its analytics and its well-known tree mapping and heat map-visualizations. It competes with Tableau Software, Tibco Spotfire and the list of data visualization companies popping up in the market.
ParStream is considered a solid player in the database market for its hybrid technology that only keeps the “hot data” in-memory, thereby reducing the amount of data it processes for a query. It does this by creating an index and analyzing the data in a compressed format. Only the hot spots of the index are created.
As I wrote last August: “The data is stored in columns, which is better for analytical purposes, and focuses on fast response times and parallel processing. The company’s targeted use cases are customers that have huge amounts of data that is imported continuously just once and not changed afterwards. Web analytics, fraud prevention, online advertising, telco billing, smart metering and sensor network data analysis are all examples of potential use cases.” According to Gartner, ParStream competes with such players as SAP Hana, IBM and VoltDB.
Salesforce.com met analyst expectations for its first quarter with non-GAAP earnings per share of 10 cents. Total first quarter revenues were $893 million, an increase of 28 percent on a year-over-year basis.
Subscription and support revenues were $842 million, an increase of 29% on a year-over-year basis. Professional services and other revenues were $50 million, an increase of 25%. It had operating cash flow of $283 Million, up 33%. Salesforce also raised its 2014 fiscal year reenues to an estimaged $3.835 to $3.875 billion.
Salesforce.com is on a bit of a roll. Gartner nmed it the number one CRM platform in the world this past quarter. CEO Marc Benioff said in the earnings call that it had a record number of SAP customers moving to Salesforce.
(We will update the story as more information comes available.)
IDC today was the latest to publish its numbers on smartphone market shares after the major handset makers released Q1 earnings, and like Gartner, Strategy Analytics and the rest, it underscores the power of Google’s Android platform at the moment: Android OEMs shipped 162.1 million handsets in the quarter, giving the platform a 75% share of total worldwide shipments, while Apple’s 37.4 million devices put it at an increasingly distant second position at 17.3%. Microsoft’s Windows Phone, driven primarily by its partner Nokia (79% of all WP shipments), grew the most of all platforms, with a rise of 133.3%, but that still puts it at a single-digit share, 3.2% on 7 million devices shipped.
That meant that Microsoft has now overtaken BlackBerry, which declined by just over 35% with 6.5 million shipments, ending with a 2.9% market share.
Important to note that IDC specifies that this is devices shipped, not sold. Some analysts have told me that the two are effectively interchangeable terms, but shipped is also potentially a more optimistic figure: it points to how well retailers and carriers think certain models are likely to sell in the quarter ahead. Occasionally these can lag compared to how well certain handset makers are actually doing if a device ends up selling worse than expected.
What “shipped” numbers like IDC’s say is that Android and iOS continue to, more or less, remain the only games in town in terms of how confident sales channels feel about shifting devices, with other platforms relegated to niche status. This is something that companies like BlackBerry are trying to change, as evidenced by a recent deal to extend a $256 million loan to Telefonica for purchasing BlackBerry devices.
IDC’s numbers show that together these two platforms accounted for nearly 200 million units (199.5 million) shipped, up 59% over a year ago. The smaller players are not to be dismissed, though. Not only is Windows Phone the most rapidly rising of all platforms at the moment, but IDC notes that BlackBerry’s BB10 new range have hit 1 million shipped devices this quarter.
But turnaround will only come with that kind of growth being sustained. “Given the relatively low volume generated, the Windows Phone camp will need to show further gains to solidify its status as an alterative to Android or iOS,” writes Kevin Restivo, senior research analyst with IDC.
For the time being, the message to users, and to app developers, is that these are the platforms where you want to be. Considering how key content has been as a route to attracting users to these devices, that will continue to pose a challenge for the smaller players.
As with Strategy Analytics’ numbers yesterday detailing the profitability of different smartphone platforms in the quarter, IDC notes that Samsung is by far the “clear leader” in Android. It notes that it had a 41.1% market share. As a sign of the ongoing fragmentation of players on the platform, no other single OEM had more than a single-digit percentage market share after that, “and an even longer list of vendors with market share less than one percent.” The fact that it’s still “free” to license Android, and relatively easy to modify it for a more custom experience, will mean that it will continue to be the platform of choice for OEMs looking for more revenues from the ongoing boom in smartphones.
As we saw in Apple’s earnings earlier in the quarter, the company’s sales of iPhones are at an all-time high, but in comparison to the growth of the rest of the market, it’s actually off, with market share down nearly six percentage points. There is some feeling that part of this is due to the fact that the platform appears stale compared to all the change going on elsewhere with software and hardware features, news handsets and more. “Although demand remains strong worldwide, the iOS experience has remained largely the same since the first iPhone debuted in 2007,” IDC notes, pointing to a “massive overhaul” that appears to be on the cards with iOS 7.
IDC also notes that over the last year, shares of the biggest platforms have fluctuated, although Android’s current 75% is the highest in a year. Against that, the last time that Android approached 75%, in Q3 2012, Apple’s share was only 14.5% as people held out for a new iPhone model. That shows that Apple’s growth this quarter was at the expense of declines for other smaller platforms.
Apple continues to lead both as the single-most profitable smartphone maker, and by default the most profitable platform, taking 57% of $12.5 billion in smartphone operating profits in Q1, according to figures out from Strategy Analytics today. Android took 43%, equating to $5.3 billion, Neil Mawston, chief analyst with the firm, tells TechCrunch.
The figures come as analyst houses are releasing various estimates for how smartphones have been selling in Q1. Strategy Analytics have published some numbers that tell the story in a different way.
Yes, Android is dominating smartphone sales (Gartner’s figures yesterday noted that Google’s platform took nearly 75% of all sales in the three month period). Yes, Samsung continues to widen its lead against Apple — now at 31% of all smartphone sales. But it still has a ways to go before it tops Apple, which has built its brand as the premium offering. (One possible reason why it has resisted up to now launching a low-cost, more cheaply made handset.)
Within the Android portion of smartphone profits, Samsung is taking ever the bigger lion’s share. Its $5.1 billion in operating profit works out to 95% of all Android revenues, and 40.8% of all smartphone operating profits overall. Bad news for other vendors/platforms like Nokia and BlackBerry: their collective profits totalled just $300 million for the quarter, working out to a 2.2% share of profits.
This also shows that Samsung has come quite some way in working out its profitability engine in the last year as it has continued to grow. This time a year ago, it was generating only about half the revenues of Apple in mobile devices (and that was counting Samsung’s smartphones as well as its feature phone handsets), and accordingly a thinner proportion of profits.
These numbers largely tally with some released earlier this month by Canaccord Genuity (via AllThingsD). The difference lies at the lower end, where Canaccord Genuity says that vendors beyond the top two effectively took nothing.
With these numbers coming out just as Google I/O kicks off, Strategy Analytics again throws light on just how disproportionate Samsung’s weight is in the Android ecosystem, and how its sales dominance works out to larger economies of scale and profit: its $5.1 billion in operating profits works out to 95% of all profits made on Android, with LG the only other vendor to break out from “others,” with a meagre 2.5% of profit share on $100 million in operating profits.
“An efficient supply chain, sleek products and crisp marketing have been among the main drivers of Samsung’s impressive profitability,” Woody Oh, Strategy Analytics’ senior analyst writes. In contrast, “LG delivered a small profit during the quarter, but it currently lacks the volume scale needed to match Samsung’s outsized profits.”
Just think of what that means for the even smaller Android OEMs.
Mawston believes that Samsung is actually generating even more revenue than Google itself from Android, counting things like mobile advertising and apps revenue.
“We believe Samsung generates more revenue and profit from the Android platform than Google does,” he writes. As Google’s Android head Sundar Pichai today reported during that I/O keynote that there have been some 900 million Android activations worldwide, this begs the question of who is in the driver’s seat on the platform — and by association smartphones worldwide.
“Samsung has strong market power and it may use this position to influence the future direction of the Android ecosystem,” Mawston writes. “For example, Samsung could request first or exclusive updates of new software from Android before rival hardware vendors.” If those kinds of requests are likely to get made, it will get harder and harder for Google to resist and continue maintaining the level playing field it’s tried to create for its mobile platform.
Tablets are not included in any of the above calculations, Strategy Analytics says.