M+E Connections

Salesforce’s Latest Acquisition is Vlocity for $1.3B

Salesforce is acquiring Vlocity, a provider of cloud and mobile software built natively on the Salesforce platform, for about $1.33 billion in cash net of Salesforce’s ownership in the company, Salesforce said Feb. 25.

“The transaction is expected to close during the fiscal second quarter” of Salesforce and “we expect approximately $50 million in revenue contribution during fiscal 2021,” Mark Hawkins, Salesforce CFO and president, said on an earnings call for the company’s fourth quarter (ended Jan. 31).

“Vlocity has been a phenomenal partner for the last six years, delivering industry-specific clouds and mobile app solutions for the world’s top companies,” Salesforce CEO Marc Benioff said earlier on the call.

The two companies have also been “closely connected with our values,” according to Benioff, who added: “The work we’ve already done together with our customers has been extraordinary and, with this acquisition, will be easier than ever for us to deliver powerful industry solutions to our customers by every vertical.”

Salesforce executives, meanwhile, said they continued to see positive results from its 2018 purchase of software firm MuleSoft and 2019 acquisition of software firm Tableau in 2019.

Noting that Tableau was the “largest acquisition in our history,” Keith Block, who the company disclosed just stepped down as co-CEO, said: “We’re pleased with how well Tableau has performed over the year and certainly in Q4. Tableau had significant wins, including three of the world’s biggest brands in the Internet and retail spaces, two of which are at the top of the Fortune 100.”

Toyota and Volkswagen, meanwhile, were among the companies that he said chose MuleSoft in the quarter “to unlock data and accelerate their digital transformations.”

MuleSoft has “continued to perform beyond expectations,” according to Benioff. “It has become incredibly strategic to so many of our customers, and we’re so thrilled with the progress of their team,” he told analysts.

Salesforce also continued to make enhancements with its Einstein artificial intelligence platform, Benioff pointed out. In Q4, Einstein “powered more than 11 billion predictions per day, up six billion from just a year ago,” he said, adding: “No other company is delivering this level of intelligence.”

Total Salesforce Q4 revenue grew 35% from a year ago to $4.85 billion. Excluding the impact of Tableau and Salesforce.org, Q4 revenue grew 22%, Hawkins said on the call.

Q4 subscription and support revenue increased 35% to $4.56 billion, while professional services and other revenue grew 26% to $288 million.

Sales Cloud grew 17% or about 14% excluding the contribution from Salesforce.org, Hawkins said. Service Cloud grew 26% or about 22%, excluding the contributions from ClickSoftware, which Salesforce bought last year, and Salesforce.org, he said.

Platform and other business grew 74% or about 30%, excluding the contribution from Tableau and Salesforce.org, he said. Marketing and Commerce Cloud grew 28% or about 24% excluding the contribution from Salesforce.org, he told analysts.