Salesforce buys Demandware and took a big step into the business of sales itself. Today the company announced that it would spend $2.8 billion to acquire Demandware, a cloud-based provider of e-commerce services.
“Demandware is an amazing company—the global cloud leader in the multi-billion dollar digital commerce market,” said Marc Benioff, chairman and CEO, Salesforce, in a statement. “With Demandware, Salesforce will be well positioned to deliver the future of commerce as part of our Customer Success Platform and create yet another billion dollar cloud.”
“Demandware and Salesforce share the same passionate focus on customer success,” said Tom Ebling, CEO, Demandware, also in a statement. “Becoming part of Salesforce will accelerate our vision to empower the world’s leading brands with the most innovative digital commerce solutions that enable them to connect 1:1 with customers across any channel.”
This is a massive deal for Salesforce for a few reasons, and not just because of the price. First, the acquisition grows the “funnel” for the company: it extends the types of contracts that Salesforce can forge with existing customers (longtime Marketing Cloud or CRM customers now can be upsold on larger deals that include commerce services). It also gives Salesforce a new group of customers to upsell for the other services that it already offered, from marketing and online analytics through to back-office software for sales and other IT functions. Demandware customers include Design Within Reach, Lands’ End, L’Oreal and Marks & Spencer, the company said.
More interestingly, it also opens up Salesforce to competition with the likes of Shopify, Amazon, eBay and its former service Magento. This group not only provides third parties with commerce software, but some (specifically Amazon and eBay) also want to be the go-to platforms for transactions.
Salesforce says its new Commerce Cloud “will be an integral part of Salesforce’s Customer Success Platform, creating opportunities for companies to connect with their customers in entirely new ways. Salesforce customers will have access to the industry’s leading enterprise cloud commerce platform, and Demandware’s customers will be able to leverage Salesforce’s leading sales, service, marketing, communities, analytics, IoT and platform solutions to deliver a more comprehensive, personalized consumer experience.”