Innovation Is Still King

Understanding tech often produces the desire to buy tech, because when you have product cycles, you understand you can really make a lot of hay. That's why this week on "Mad Money" I brought on the CEOs of Salesforce.com (CRM - commentary - Trade Now) and Tessara Technologies (TSRA - commentary - Trade Now). Both have hard-to-understand products -- cloud computing and miniaturization, respectively -- that defy easy analysis.

What I had the CEOs demonstrate, though, was surprisingly easy to understand. With Salesforce.com, it's pure productivity married to ease and a Google-like interface. With Salesforce.com, you can tell who is selling, what she is selling, who she is seeing, and who she is not. Anyone who has ever been in sales knows that how you are doing has been the great unknown. In a very inexpensive way and in real time, that confusion is over.

Tessara's got two product cycles: the miniaturization of cameras to sizes that will make the mobile phone Internet tsunami have another leg up -- yes, the cameras could barely be seen by our cameras on the set -- and a cooling fan that is much smaller than current ones but cools much better.

Tessara and Salesforce.com are simply better-mousetrap ingenuity plays. They are doing things cheaper and better than anyone else. For that, they are "penalized" with high multiples, but given the consistency of both earnings and innovation, I think both are worth paying up for.

At the time of publication, Cramer had no positions in the stocks mentioned.

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