5 Fastest-Growing Software Companies

1. Salesforce.Com, Inc. (NYSE: CRM)

    Revenue(2015): $5.37 billion

    Revenue(2020): $17 billion

    Employees: 49,000

Salesforce is a SaaS(Software as a service) company that provides Customer Relationship Management(CRM) services and other applications that optimize analytics and marketing automation. Salesforce provides a platform for users and developers to customize and create their software. The company offers a range of Cloud services in Sales, Marketing, Service, Commerce, Analytics, and more.

The Salesforce software can be integrated with several applications. It also has applications that allow developers to test out their software and programs. The company provides a platform that enables the creation and exchange of customized software. The Salesforce software is used by more than 150,000 companies, including Adidas, Toyota, and others.

Polen Capital Management’s Focus Growth Fund, in their Q4 2020 Investor Letter said that their position in Salesforce.com, inc. was one of the bottom contributors for the fund during the fourth quarter of 2020, but they maintain an optimistic view for the company. Here is what Polen Capital Management stated:

“We discussed Salesforce.com in the third quarter, but the former went from our top contributor last quarter to the largest detractor this quarter. The double-digit share price decline in the quarter seemed mostly driven by investor reaction after Salesforce announced it would acquire Slack, a collaboration software company, for approximately $28 billion, a high purchase price. While the purchase price is higher than we expected, we believe Slack and its functionality fit well strategically with Salesforce’s suite of enterprise software offerings. At a high-level, Slack offers the ability to make both Salesforce’s and other third-party applications work better for their respective customers. In addition, Salesforce’s world-class selling organization and already large customer base should be beneficial for Slack’s subscription revenue growth, which has been more customer-referral based up to this point. It is too early to know if this acquisition will prove to be a smart allocation of investor capital. That said, Slack has a unique value proposition and was growing nicely on a standalone basis. We believe the Salesforce-Slack strategic vision is on point; and although the purchase price is high in absolute dollars, it represents less than 15% of Salesforce’s market capitalization.

We maintain an optimistic view of Salesforce’s business, its competitive positioning within enterprise software, and the rationale behind the Slack acquisition. We expect strong, continued earnings and free cash flow growth many years into the future.”

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