Salesforce.com (CRM - Get Report) Chairman and CEO Marc Benioff called out rivals Oracle (ORCL - Get Report) and SAP (SAP - Get Report) during the enterprise cloud company's fiscal first-quarter earnings report on Wednesday after the close.
Shares of Salesforce.com gained $3.25, or more than 4%, to $81.12 on Thursday, after the company topped forecasts. Fiscal first-quarter 2017 sales grew 27% to $1.92 billion, while analysts called for revenues of $1.89 billion. The customer relationship management software developer earned 24 cents per share, a cent above consensus.
"I think that one of the reasons that we are doing so well is because Oracle and SAP are doing so poorly in the cloud, they just have not been able to make that transformation that we've made," said Benioff, who had previously worked in sales, marketing and product development for Oracle for more than a decade.
"We just continue to take market share from them and gain customers at a record levels and you can see that their growth numbers are nothing like we're putting up here," he added.
UBS analyst Brent Thill suggested in a note that Salesforce can continue double-digit percentage growth, noting that the company's $7 billion in revenues for the last twelve months is a small chunk of a $75 billion market.
"The pace of innovation has not slowed, and there appears to be no cracks in its culture of excellence and customer focus. Sizable opportunities remain in large 'Cloud' product categories and international regions," he wrote. UBS raised its target from $92 per share to $100 per share. The new estimate represents 6.8 times of Salesforce's sales, versus the median software-as-a-service valuation of 4.5 times sales.
As cloud rivalries heat up, boasts and barbed comments have become common on earnings calls.
Larry Ellison took some digs of his own at Salesforce during Oracle's fiscal third quarter of 2016 call in March.
In additional to its presence customer relationship management, Ellison noted, Oracle operates in large software markets such as enterprise resource management and human capital management. "ERP has always been a much larger market than CRM," he said. "Salesforce.com is missing all of that ERP market opportunity."
Oracle said that total cloud revenues, including software-as-a-service (SaaS) and platform-as-a-service (PaaS) offerings, grew 43% to $737 million in the fiscal third quarter. The company will announce results for the fourth fiscal quarter in June.
"Oracle is now selling more new SaaS and PaaS annually recurring cloud revenue than any other company in the world including Salesforce.com," Ellison said on the March call. "We are growing much faster than Salesforce.com more than twice as fast, because we sell into a lot more SaaS and PaaS market than they do."
Likewise, SAP CEO Bill McDermott asserted his company's cloud supremacy at its annual meeting in May.
"We are the fastest growing software company at scale in the cloud now approaching 110 million users, more than any other company in the industry," McDermott said, referring to cloud users across SAP's platform, not just in customer relationship management.
SAP's cloud sales grew 33% to €678 million ($760 million) in the first quarter of 2016, which the company says is the 12th consecutive quarter in which cloud growth exceeded 33%. The company forecasts 2016 cloud revenue of €2.95 billion to €3.05 billion ($3.31 billion to $3.42 billion).
An SAP spokesman said the company has the largest portfolio of cloud apps. SAP's Human Capital Market is a market leader, he said. The core SAP SuccessFactors Employee Central product had more than 1,100 customers at the end of the first quarter. SAP's customer engagement and commerce unit goes "way beyond" traditional CRM, he noted, and links into other software channels.
While Oracle and SAP have cloud operations in broader segments of software, UBS analyst Thill noted that the companies are drawing from Salesforce's playbook as they adopt new software models. "Salesforce.com is the largest pure-play vendor in SaaS (software-as-a-service) by more than a 5:1 margin, and the highest profile vendor disrupting the enterprise software landscape," he wrote.