Salesforce.com Inc. rose to its highest in two months after Piper Jaffray & Co. said the software company had signed the largest sales contract in its history.
The deal exceeds a $140 million sale to State Farm Life Insurance Co. that Salesforce booked earlier this year, and is notable because it comes in the middle of its fiscal year, not in the fourth quarter, when many large transactions close, Piper Jaffray analyst Mark Murphy said in an Aug. 12 note to clients. Salesforce is scheduled to report fiscal second-quarter earnings Aug. 23.
Shares of San Francisco-based Salesforce were up 3.8 percent at $145.15 at the close in New York, the highest since May 29, according to data compiled by Bloomberg. The shares have lost 9 percent from the end of a rally on April 19.
Salesforce, the biggest supplier of online customer management software, is adding programs for managing human resources and handling customer support and marketing on social media websites to its core software that tracks sales leads and quotas. The company today said it completed its $689 million acquisition of Buddy Media Inc., which lets companies create fan pages on Facebook Inc. and post marketing materials there.
Chief Executive Officer Marc Benioff is diversifying Salesforce beyond its base as competitors Oracle Corp. and SAP AG emulate its business model and make acquisitions of companies that also deliver business software through a Web browser. At its annual Dreamforce conference on Sept. 18 in San Francisco, Benioff plans to detail a new human resources offering called Work.com.
Salesforce and Workday Inc., which sells online HR and accounting software, have been winning deals against Oracle and SAP in recent months, selling clients on the lower costs of renting software on a monthly or annual basis, instead of installing and maintaining it themselves.
“The unprecedented cluster of multi-year mega-deals for Salesforce.com likely signifies a changing of the guard in the enterprise software industry,” Murphy wrote in his note.
Andrew Schmitt, a spokesman for Salesforce, didn’t immediately return a phone call seeking comment on the report.
Tomorrow, Salesforce is expected to unveil a new version of its Chatter business-networking software called Chatter Communities for bringing customers, partners and employees into online conversations, two people familiar with the matter said.