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Salesforce & Google Form Cloud Alliance for Global Expansion


Yesterday, Salesforce.com Inc. CRM and Alphabet Inc. GOOGL announced a strategic partnership, according to which the two tech giants will integrate their software solutions and cloud-computing services. We believe the move is part of the companies’ broader infrastructure expansion plans.

Partnership Highlights

With this deal, the companies are trying to make their respective services more beneficial to customers. The main highlight of the deal includes the integration of Salesforce’s marketing software with Alphabet’s Google Analytics services. These companies anticipate rolling out the integrated service in the first half of the next year. The service will likely be offered for free to the clients.

The aforementioned integration will provide marketers access to Salesforce’s customer data which can be moved into Google’s data crunching services. This will provide marketers even deeper insights into consumer behaviour and patterns, thereby helping them create more personalized sites and ads. Also, this will enable the marketers to help their clients enhance user engagement and sales conversion.

The other important part of the deal is pairing up of Salesforce’s CRM platform with Google’s G Suite. G Suite is an office software platform similar to Microsoft’s MSFT Office 365. Per the agreement, Salesforce clients who don’t use G Suite currently will get this offering free for a year.

Additionally, Salesforce has announced Google Cloud as its preferred cloud partner. This implies it can use Google’s global data centers for overseas expansion just like it uses Amazon’s AMZN Amazon Web Services (AWS).

What this Alliance Brings in for Salesforce?

The collaboration will provide Salesforce another platform apart from Amazon’s AWS to sell its products. The worldwide presence of Google’s data centers will enable the company to expand its footprint in overseas markets.

In addition to this, the enhanced offerings, including Google Analytics and G Suite, will lure enterprises to opt for Salesforce services, in turn bringing in additional revenues.

Notably, Salesforce stock has gained 49.6% year to date, substantially outperforming the 26.8% rally of the industry it belongs to.

Alphabet to Gain the Most

Though the collaboration is beneficial for both companies, we believe Alphabet will gain the most. We see the move as Alphabet’s latest gambit to boost its market share in the lucrative cloud computing business.

The alliance has brought in a new big channel partner for Google Cloud at a time when Alphabet is striving to compete with arch rivals — AWS and Microsoft — in this space. Notably, this is the second big partnership for Google Cloud in the past one month. Last month, it entered into a cloud computing alliance with Cisco CSCO.

Furthermore, the integration of G Suite with Salesforce’s customer relationship services will help Alphabet accelerate the adoption of its office software platform. This will also help it compete against Microsoft Office 365 which is currently the largest office software-platform provider globally.

Also, it is most likely that Salesforce’s customers who will use G Suite free for a year will buy it in the next year as well. This, again, is encouraging since this will bolster the company’s revenue base.

Shares of Alphabet have gained 31.6% year to date, significantly outperforming the industry’s 24.4% rally.

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