Long-Term, This Stock Could Move Higher
Salesforce.com provides CRM (customer relationship
management) software “on demand.” Many have hailed this as something
quite new; however, software sales “on demand” used to be called “the
subscription model” during the bubble years. Like most business models, it’s a
great concept for some users and some software, but not for others.
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Act! for
considerably less than Salesforce.com is asking. Alternatively, the company
could buy a more capable application like
SalesLogix for
about the same amount of money when looking at a four- or five-year
amortization.
Websense, some
sell quarterly, and some sell monthly. Typically the on-demand pricing is set at
an equivalent to a three- to four-year amortization of the equivalent license.
Concur Technologies
(travel management) are selling more of an ongoing service rather than a big
chunk of code, and not owning it is not an issue. For ERP (enterprise resource
planning) applications, such as accounting, it doesn’t work for all but a niche
group for a number of reasons, not the least of which is the software can last
10 to 15 years. Why would I lease a car for 10 years at $600 month rather than
buy it (or finance it) for $40,000? Why not buy QuickBooks for $120 rather than
renting it for $20 per month?
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Melanie
Hollands
melaniehollands@yahoo.com