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Salesforce Looks to Expand UK Presence with $2.5B Investment


Salesforce.com Inc. CRM recently announced that it will be investing $2.5 billion in the UK in the next five years. Notably, the announcement was made ahead of the Tech Investment Roundtable hosted by Prime Minister Theresa May in which Salesforce is a participant.

With the new investment, Salesforce plans to increase its data center capacity, office space and headcount in the UK. Per Gartner’s recent report, Salesforce ‘is the fastest growing among the three largest enterprise software vendors” in the UK.

Salesforce’s Growth Trajectory in UK

Salesforce, a leading provider of on-demand Customer Relationship Management (CRM) software is already a prominent name in the UK. Per Marc Benioff, the Chairman and CEO of Salesforce, UK is the company’s largest market in Europe and the company is putting its best foot forward to tap the growth opportunities in the market.

The company already has some noteworthy UK-based companies on its clients list. These include the likes of Aston Martin and British Airways among others. Notably, in May 2018, Salesforce opened its Salesforce Innovation Centre in Salesforce Tower London aimed at developing innovative solutions in accordance with its customers. The new-age solutions will cover areas such as cloud, artificial intelligence (AI) and Internet of Things (IoT) among others.

The company is also planning to unveil a second data center in UK in 2019. The first one was inaugurated in 2014. Notably, the new one is expected to follow the footsteps of the first data center in using renewable energy sources.

The initiatives of the company are helping to expand its presence in the UK, which will eventually boost its customer base in the country, thereby being a tailwind for its overall revenue growth.

Impressive Financials

Notably, Salesforce has been benefiting from robust adoption of its cloud-based solutions across all geographic regions, which aids revenue growth. The company witnessed a year-over-year increase of 25% in first-quarter fiscal 2019 revenues, which came in at $3.006 billion.

Salesforce.com Inc Revenue (TTM)

Salesforce.com Inc Revenue (TTM) | Salesforce.com Inc Quote

Management is extremely optimistic about enhancement of customer experience that has aided growth of the cloud segment. The company’s diverse cloud offerings, strategic acquisitions and the resultant synergies, expanding partner base and considerable spending on digital marketing are key catalysts for its growth.

These along with planned investments are expected to aid growth of this Zacks Rank #3 (Hold) stock in the long haul.

Some better-ranked technology stocks include NVIDIA Corp. NVDA, Western Digital Corp. WDC and Micron Technology, Inc. MU, all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for NVIDIA, Western Digital and Micron is currently projected to be 10.25%, 19% and 10%, respectively.

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