Profitable relationships

There’s a fast-growing kind of software out there —specializing in customer relationship management (CRM) — and the dominant company in the business is salesforce.com (NYSE: CRM). Its systems help companies keep track of and manage their relationships and interactions with customers and potential customers — and analyze that data, too. Shares of Salesforce have more than tripled in value over the past five years, and many analysts expect continued robust growth. Why? Well, the market for CRM software is expected to surge from a recent $72 billion to $123 billion by 2021. According to industry analyst IDC, Salesforce gained more market share than the rest of the 20 largest CRM suppliers combined in 2017. The company’s market share gains are helping to produce tremendous increases in revenue and cash flow, with Salesforce’s revenue popping 25 percent over year-ago levels in the last quarter to $3 billion, along with a 25 percent gain in free cash flow, to $1.3 billion. Looking even further ahead, Salesforce is on pace to hit its goal of generating $21 billion to $23 billion in annual revenue by fiscal 2022. Catalysts for further growth include Salesforce’s incorporation of artificial intelligence in its offerings and its recent acquisition of MuleSoft, which will expand its cloud computing capabilities.