Salesforce.com (CRM) Stock Up, Expanding Internationally With Amazon.com Web Services

NEW YORK (TheStreet) -- Salesforce.com (CRM)  shares are rising 0.63% to $84.10 on Thursday as the company is planning to use Amazon.com (AMZN) Web Services to extend into international markets like Canada and Australia. 

The deal with the e-commerce giant is valued at around $400 million. 

By picking Amazon's cloud computing service as its "preferred public cloud infrastructure provider," Salesforce will begin using Amazon Web Services (AWS) across all of its core products, like Sales Cloud, Service Cloud, and App Cloud, for parts of its international services.

Overtime, Salesforce could build a data center in the international markets, but it is possible that it could stick with Amazon Web Service because it's more cost-effective. 

The recent deal is a sign that the two companies are taking their existing partnership to the next level. While Salesforce has been already using Amazon's cloud computing service, this is the first time its key applications will be on someone else's computers, the New York Times reports.

"We do not expect the expanded AWS relationship to have a dramatic impact on Salesforce.com's gross margin, but it is likely to be beneficial over the long term," Pacific Crest Securities analysts noted.

Amazon.com (AMZN) stock is advancing 0.75% to $713.67 on Thursday.

Separately, TheStreet Ratings currently has a "Hold" rating on the stock with a letter grade of C.

The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

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