Saturday, October 18, 2008
Salesforce to cut prices
As the article suggests, the reason must be competition and it must be biting. My only question is how do they plan on cutting the price when their margin, on average, falls around the 5% mark? I'm thinking cutting their price by 5% won't do much for them.
The big expense for Salesforce is 'sales and marketing', so if you're an 'account manager' at salesforce its time to get that resume up to date. Cutting their sales and marketing function by 10%, while short-sighted and unimaginative, should do the trick.
Salesforce share price at time of writing? $31.59. If you bought Salesforce shares a year ago you would have done as well buying into an index fund tracking the Dow. Those that bought 3 years ago are still ahead though, for now.