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Salesforce.com to Go Public
Morgan Stanley will act as sole book runner for the offering, and comanagers will be Deutsche Bank Securities, UBS Securities, Wachovia Capital Markets, and William Blair.
Posted Dec 18, 2003
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Salesforce.com today has filed with the Securities and Exchange Commission for an initial public offering of common stock valued at approximately $115 million, according to the SEC document. Morgan Stanley will act as sole book runner for the offering, and comanagers will be Deutsche Bank Securities, UBS Securities, Wachovia Capital Markets, and William Blair, according to Salesforce.com. The company did not announce how many shares it will issue, or the initial share-offer price, but says it will do so in the near future. Salesforce.com was unavailable for comment on the IPO, because it is in the required quiet period preceding a public stock offering. "Despite the significant potential benefits that can be attained from CRM, many enterprises have failed to successfully deploy the CRM applications that they have purchased for a variety of reasons, including the difficulty and relatively high cost of implementing and maintaining enterprise applications, as well as the historically low rates of user adoption and lack of ubiquitous access that have contributed to lower returns on investment in CRM deployments," the company stated, in the filing as reasons for going public. Also in the filing Salesforce.com notes that it will use the proceeds of the IPO for "general corporate purposes," which includes working capital and capital expenditures. "We may also use a portion of the net proceeds to fund possible investments in, or acquisitions of, complementary businesses, services, or technologies." Salesforce.com's competition says that the IPO is yet more proof that the hosted CRM model is here to stay. "Salesforce.com has been very successful in building general awareness of the online CRM space, and we congratulate them," says Mike Doyle, chairman and CEO of Salesnet. "The recent activities in the market prove that online, on-demand applications are the preferred model for delivering CRM." Sheryl Kingstone, CRM program manager at the Yankee Group, says that Salesforce.com stands to gain as a public entity. "I am full of hope that the eventual listing will illustrate validation of the subscription and hosting model," she says. "While other tech stocks have not demonstrated success on the public market, Salesforce.com has a substantial customer base, strong product offering, and a financially sound operating mentality. What's critical is to educate the public on the future potential of ongoing revenue streams. As long as they maintain their existing customer base, they are on solid ground from a recurring revenue standpoint."
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