Salesforce, a cloud-based customer relationship management company, inked a deal to acquire Demandware, which provides cloud-based e-commerce services to businesses.
Salesforce will pay $2.8 billion for Demandware, which was valued at $1.9 billion. The deal is expected to close at the end of the second quarter, enabling Salesforce to create what it’s calling a “Salesforce Commerce Cloud.”
Salesforce said that as a part of its Customer Success Platform, which provides services in sales, service, marketing, analytics and more, the new Commerce Cloud will allow companies to better connect with customers.
“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,” said Salesforce chairman and chief executive officer Marc Benioff.
Demandware retailers include Design Within Reach, Lands’ End, L’Oréal and Marks & Spencer. Demandware ceo Tom Ebling said 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.”
Demandware connects consumers with brands on the web, through mobile and social channels and in stores.
Worldwide spending on digital commerce platforms is expected to grow at more than 14 percent each year, which would reach $8.5 billion by 2020, according to figures shared by Salesforce from Gartner. This acquisition is expected to increase Salesforce’s annual revenue by up to $120 million.
Salesforce’s Customer Success Platform connects Salesforce’s cloud apps for sales, service, marketing, community and analytics, and provides a system of record and a system of engagement for companies. This is the largest acquisition for Salesforce, which will now compete with other companies that provide e-commerce services, like Magento and Shopify, and transaction platforms provided by Amazon and eBay.
Demandware’s 1,000 employees will join Salesforce, and the company, which was founded in 2004, is headquartered in Burlington, Mass. It went public in 2012. Salesforce, based in San Francisco, has annual revenue of $6 billion and is expected to be $8 billion in 2017. It has 20,000 employees.