Salesforce and Alibaba will join forces and enter the Chinese software market, hoping to chase new Asian business regardless of the US v China trade war. Alibaba will promote and trade the Salesforce cloud-based software for customer service, clients’ sales, and other commerce needs in Hong Kong, China, Taiwan, and Macau.
Before this, Salesforce had a minimal presence in China. However, regardless of where they do business, multinational customers have been crying out for support, according to the statement issued by Salesforce. Allegedly Rival Oracle Corp. has shredded workers in China, and Larry Ellison (the company’s co-founder) said that it was important for the US tech industry and military to be seen to beat China.
Salesforce, a San Francisco-based entity, is one of the leading vendors of software for managing customer relationships using CRM tools. They want to increase their annual revenue to rise to $28 billion by 2023 – which is more than double what it is now. Recently, it has only experienced slow growth.
Keith Block and Marc Benioff are both co-Chief Executive Officers of the company. Under their leadership, the company has expanded across the globe. Their announcements herald various hiring and investments made throughout Europe and Asia. Salesforce has opted to enter China at a period where the US government has deliberately made it more difficult for American technology firms to sell products to any Chinese resident customers, amid a flood of tariffs on any China-made goods.
There are a few investors who were concerned about Salesforce’s low revenue growth rates. While true, it is essential to remember that the company repeatedly reports quarterly sales increases of more than 20%. Salesforce is not averse to splashy acquisitions. Over the past couple of years, such purchases significantly contribute to their revenue, including the $15.3 billion proposal to buy Tableau Software Inc, a data-analytics company, announced by the company last month.
What Gartner says About Alibaba
The $3 billion cloud services arm of Alibaba is quickly becoming an essential driver of its worldwide expansion. This giant of e-commerce widened the gap between themselves and Amazon.com Inc. and Microsoft Corp. How? By becoming the leader of the cloud-computing market in Asia in 2018.
Alibaba’s Chinese cloud business commands more than 50% of the market and is predicted to grow to 55% within 3 years. That would mean growth rising to $331.2 billion. Their cloud business has yielded triple-digit revenue growth during the last 3 years, thus outpacing all others in the industry. Gartner further estimated that Alibaba accounted for almost 20% of the market last year in Asia over 2 forms of infrastructure cloud services. Across the globe, however, Amazon still leads with more than 30% compared to Alibaba’s 4.9%.