- Cloud giant Salesforce is said to be looking to acquire a company that specializes in robotic process automation, or RPA, technology that helps businesses automate common and repetitive computer tasks.
- The move would help boost Salesforce’s position in the cloud applications market, at a time when the tech giant is going through a period of slower organic growth, partly due to the coronavirus crisis.
- We checked with analysts on the RPA companies that could be potential acquisition targets for Salesforce. Here are the 10 possibilities they mentioned:
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Salesforce, like other enterprise software companies, has so far seemed to weather the pandemic better than those in certain other sectors.
However, the cloud software giant is still being cautious, and in May cut its full-year revenue targets from $21 billion down to $20 billion. That would show revenue growth of 17% from a year prior, as opposed to the higher 23% it was aiming for, which would in turn show some of Salesforce’s weakest growth in recent memory.
Over the last few years, Salesforce has turned to large acquisitions — like Tableau and MuleSoft — to help meet its ambitious growth targets. It has also brought several smaller names into the fold, like its most recent acquisition of Vlocity in February.
While CEO Marc Benioff said in February that he doesn’t “anticipate any major acquisitions in the short term,” he also described the acquisition of Vlocity for $1.3 billion as too good to pass up. And with the company forecasting a slowdown in organic growth, that could mean that another big acquisition is at least under discussion.
“It would make sense that they would be looking for a pretty high profile acquisition, given that they had to adjust their revenue guidance, like every company did, because of COVID,” said Dan Elman, an analyst with Nucleus Research. It would help Salesforce “recover the year” and boost their growth numbers in the long term, he added.
As for what kind of company Salesforce might like to actually buy, a hint may have come in the form of a recent profile of Benioff in The Information, in which an advisor to the company said that there’s some interest in making a deal in the market for robotic process automation, or RPA. A Salesforce spokesperson said that the company doesn’t comment on rumors or speculation.
RPA is technology that helps businesses automate the common, repetitive computer tasks, that are traditionally handled by human employees. It’s a market where titans like Microsoft and its Power Platform compete with leading startups including UiPath and Automation Anywhere. Salesforce, for its part, has already been investing in RPA startups via its venture capital arm, even as it builds those capabilities into its core product.
Analysts tell Business Insider that a heavier investment in RPA would be a smart move for Salesforce, which “is going to want to keep up and accelerate faster,” said Dan Newman, an analyst at Futurum Research.
“It would definitely be a growth opportunity for Salesforce, enabling them to accelerate for customers, the bot capabilities that they’ve already made an investment in Einstein,” said Rebecca Wettemann, an analyst at Valoir. Einstein is Salesforce’s artificial intelligence tool, embedded in all of its apps.
The ultimate goal, is all about making customers stick around, Newman said.
Business Insider asked analysts which RPA companies Salesforce might be eyeing for an acquisition, (with all private company valuations taken from PitchBook estimates, and market caps at the time of writing). Here are the 10 companies they thought would be a good fit:
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