The Birth Of The Salesforce Commerce Cloud: Demandware Acquired For $2.8B

Salesforce took a giant leap into the retail realm on Wednesday with the acquisition of Demandware for $2.8 billion, introducing a new Salesforce Commerce Cloud business division within the company’s cloud ecosystem.

The cloud giant has captured Demandware’s eCommerce platform, a suite of on-demand cloud and marketing services for retailers. Led by the Demandware Commerce Cloud, the company helps retail customers unify cross-channel marketing and sales operations through data-driven customer profiles.

Demandware’s technology is currently in use by a host of leading retail brands, such as L’Oreal and Marks & Spencer, and featured solutions include advanced merchandising and predictive intelligence capabilities. 

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The acquisition marks a move toward retail for Salesforce, which has built its company’s success on supplying software to help salespeople keep track of their customers and outreach. Inspired by the Demandware acquisition, Salesforce also announced a new business division within its cloud ecosystem.

The Salesforce Commerce Cloud will extend Salesforce’s cloud services, expanding current customers’ reach with more retail-driven capabilities. Within the Marketing Cloud arms race, the Salesforce Commerce Cloud also places Salesforce as a more of a competitor to the retail marketing services of Adobe.

With the addition of Demandware, Salesforce has increased its expected 2017 revenue. The company now expects 2017 revenue to reach between $8.26 billion and $8.32 billion, compared to a previous expectation of between $8.16 billion and $8.20 billion.

The all-cash deal values Demandware at $75 a share, and is expected to close by the end of the third quarter. Demandware itself is coming off of a better-than-expected financial quarter that saw revenues rise 33% to $67.1 million. Loss also widened, however, from $5.2 million to $11.7 million.

Demandware ended trading Tuesday evaluated at $47.99 a share, but prices have since jumped Wednesday to hover just below Salesforce’s evaluation.

 

 

 

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