NEW YORK (TheStreet) -- One of the key technologies that has helped businesses of all sizes thrive and stay organized is enterprise software services (SaaS). The current SaaS cloud computing leader reports earnings after the markets close on Thursday, and chances are it won't disappoint analyst or investors.
Salesforce.com (CRM) knows how profitable the SaaS cloud business can be. With its cloud businesses creating gross margins above 80%, CRM has set the pace for its competitors.
This is why bigger tech giants including Microsoft (MSFT) are jumping on the cloud business hand-over-fist to drive revenue growth. The demand is so big that there's more than enough business for CRM and MSFT, which has already created gross margins from its cloud enterprises of around 70%.
It was MSFT's cloud business that prompted UBS' Brent Thill on Tuesday to reiterate a buy rating on MSFT and raise the price target from $34 to $40 a share. Thill made the following observations: "On its recent [fiscal third-quarter] earnings call MSFT finally broke out some surprising financials that Office 365 is on a $1 billion per year run rate and on April 29 MSFT disclosed its Azure business including associated software provided to partners to create related Windows cloud services had surpassed $1B as well."Translation: MSFT's cloud services added to its higher stock valuation target! CRM has a big jump on MSFT, which has enabled it to secure the business of more than 100,000 different customers globally. As its delightfully educational Web site states , "Our social and mobile cloud technologies -- including our flagship sales and CRM applications -- help companies connect with customers, partners, and employees in entirely new ways."
The Salesforce.com stock symbol "CRM" and the CRM applications referred to above is all about Customer Relationship Management. In fact CRM claims to have the #1 CRM sales app, which clients can test-drive and "kick the tires" without obligation. CRM claims its sales app helps improve sales productivity, boost win rates and increase revenue. "With Salesforce.com Sales Cloud you get all the CRM capabilities you need to connect with customers and close bigger deals faster, anytime, anywhere" the company's Web site promises. That's a big claim! From an investor's perspective, CRM has knocked the ball out of the park for years now. Look at the five-year chart to see what I'm referring to. Quarterly revenue growth has helped fuel the stock's amazing ascent. CRM data by YCharts
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