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Salesforce becomes e-commerce power with Demandware purchase


The e-commerce landscape just shifted with the announcement Salesforce will purchase Demandware for $2.8 billion.

Demandware’s recently enhanced flagship Commerce Cloud platform is one of the leading e-commerce solutions on the market. Notable retail Demandware users include Lands’ End, Marks & Spencer, Urban Decay, and True Religion. According to figures released by IHL in December 2015, Demandware is the number two retail SaaS company by installed revenue, trailing only Microsoft.

“Demandware and Salesforce share the same passionate focus on customer success," said Tom Ebling, CEO, Demandware. "Becoming part of Salesforce will accelerate our vision to empower the world’s leading brands with the most innovative digital commerce solutions that enable them to connect one-to-one with customers across any channel."

The e-commerce vendor also has existing partnerships with many other digital platforms, including Pinterest as well as Salesforce. Salesforce has been making inroads into the digital commerce arena, signing retailers such as furniture chain Room & Board to use its Marketing Cloud solution to support omnichannel operations.

However, by purchasing Demandware, Salesforce will instantly become a major e-commerce player. According to the company, what will be known as the Salesforce Commerce Cloud will be an integral part of its Customer Success Platform.

Existing Salesforce CRM and marketing clients will now also have integrated access to an enterprise cloud commerce platform, and Demandware’s customers will be able to leverage Salesforce’s sales, service, marketing, communities, analytics, IoT and platform solutions. This combined functionality should allow Salesforce to compete effectively with any and all e-commerce providers, including Amazon, eBay, Magento, Shopify and BigCommerce.

“Demandware is an amazing company — the global cloud leader in the multi-billion dollar digital commerce market,” said Marc Benioff, chairman and CEO, Salesforce. “With Demandware, Salesforce will be well positioned to deliver the future of commerce as part of our Customer Success Platform and create yet another billion dollar cloud.”

Under the terms of the agreement, Salesforce will commence a tender offer for all outstanding shares of Demandware for $75 per share, in cash. The transaction is expected to close in the second quarter of Salesforce’s fiscal year 2017, ending July 31, 2016.

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