This seems like a lot to pay for company that isn't cashflow positive. Even if we take out 147 million they spend for sales for synergy reasons. Keep the growth rate similar. We end up with FCF of 200 mil. That is paying something like 15x FCF using some crazy assumptions.
Does seem like quite a lot for a software company. Could hire quite a few devs with a billion dollars. I imagine most of the price could be attributed to Demandware's existing customer relationships and Demandware's employees, although the latter is difficult to value especially considering that most folks worth their salt are out as soon as their options vest.
Does Salesforce pursue the same model of customer acquisition as Oracle does? I know Oracle is known to sell to existing customers additional products & services, so Salesforce might be "acquiring" new customers if there is little overlap in current customer base.
It seems highly unlikely this sort of acquisition is for the technology alone.
Perhaps Benioff knows something the rest of us don't about the long-term potential. That or he had the money burning a hole in his pocket and had to spend it on something...
- 11.8x 2015 sales
- Company was growing around 50%/ year
- With -18% opinc margin
- Customer base mostly mid tier and less savy ecommerce customers, read: future Amazon victims
I think he is talking about organisations that are either: A) likely to fail victim to Amazon beginning to sell Amazon branded products under the "AmazonBasics" brand.
B) Increasingly unlikely to be able to compete against the sheer scale of Amazon as a storefront as it expands.
I've not personally touched Salesforce, but demandware centers around "pipelines" which essentially I would equate them to a visual route handler/middleware combination. Which works in combination with their propriety scripting language (javascript based), templating system, etc.
Salesforce has its "server" side language APEX which is sort of kinda based on Java, then they have SOQL which is their own, limited and akward version of SQL, and Visualforce which is their front end. So many limitations that make no sense. Documentation rarely tells you the whole picture. The whole thing is full of gotchas that you only learn through experience. Ugh.
Don't forget Aura/Lightning for one of the weirdest ugh-inducing front end / back end development rides you can find: https://github.com/forcedotcom/aura
For what it's worth, in production Demandware is much better than Websphere Commerce Server. WCS could very well be cleaner in some universe, but the heavily-customized (thanks IBM) versions that run in actual enterprise retailers are hellish.
I worked with a team which put together a complete ecommerce site using mostly their standard http APIs in a couple of months, and unlike the WCS deployment I dealt with, Demandware was usually working. We did run into plenty of bugs, but the account manager got them resolved in short order.
I would agree that, assuming no other context, Demandware is awful. In the context of its competitors, it feels like a breath of fresh air.
Alexa isn't a great indicator for enterprise software. You wouldn't expect them to have any visitors, despite the sites for all their brands having many many visitors.
The comments on this story are really reflective of the kind of people on HN - no idea what's going on with the bigger picture - if it's not completely dev focussed then it's stupid and wrong...... Sad
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[ 0.18 ms ] story [ 58.9 ms ] threadIt seems highly unlikely this sort of acquisition is for the technology alone.
=> Extremely steep price
pipelines:
http://blog.baha.dk/content/images/2015/12/dwpipeline-1.png
general overview:
http://blog.baha.dk/2015/12/19/part-2-developing-demandware/
I worked with a team which put together a complete ecommerce site using mostly their standard http APIs in a couple of months, and unlike the WCS deployment I dealt with, Demandware was usually working. We did run into plenty of bugs, but the account manager got them resolved in short order.
I would agree that, assuming no other context, Demandware is awful. In the context of its competitors, it feels like a breath of fresh air.
http://www.alexa.com/siteinfo/http%3A%2F%2Fbaesystems.com