Salesforce needs to show Wall Street some big new customers to keep up its winning streak
But Wall Street wants more, and investor focus during Saleforce's quarterly earnings call Wednesday will shift to the pipeline of big enterprise deals that many hope will fuel the company's next phase of growth.
"The big emphasis here is what are we going to get out of the big transformative enterprise deals," Tom Roderick, managing director of investment firm Stifel, told Business Insider."They're certainly expecting more moving forward for sure."
During the past year, Salesforce has signed deals with marquee customers such as Barclays, AXA and the US Department of Agriculture.
As Salesforce looks to add more big names to its customer list and to expand into new markets, Salesforce's relationship with system integrating partners like Accenture and Ernst & Young will play an increasingly important role. These firms provide consulting services for corporations and government agencies and have a lot of influence over which Salesforce services get adopted.
10-figure relationships
"They have deep relationships: not just 9-figure relationships, but 10-figure relationships with all the major enterprises all over the world," Roderick added. "What we're hearing is that partners like Accenture and E&Y are engaged in pretty sizable transformational deals with major enterprises, and certainly bigger practices around Salesforce, specifically."
This is a point Salesforce president Keith Block made during its last earnings call in August. Block didn't specifically mention the name of the company, but said that Salesforce had signed "a significant deal with a huge global systems integrator."
"The systems integrators globally and the regional boutiques who have influence in the boardroom, who have industry expertise and deep content, are at the forefront of helping our joint customers transform their businesses," Block said during the last earnings call.
Salesforce is expected to grow revenue 23 percent year-on-year to $1.70 billion in the fiscal third quarter, with adjusted earnings per share of 19 cents, according to the average analyst estimate. Those expectations are roughly in-line with Salesforce's forecast of revenue between $1.69 billion and $1.70 billion, and adjusted EPS between 18 cents and 19 cents.
"We believe the growth in system integrator partner practices is indicative of the success that Salesforce is having in large, transformative enterprise deals," wrote RBC Capital recently said in a note to investors, while Credit Suisse wrote that Salesforce is the company "most leveraged to this massive technology refresh and expansion cycle."
Team Oracle
While Salesforce has made nice inroads into the enterprise market already, expectations are growing. The addition of Block, an ex-Oracle executive, and a growing sales team he has assembled, has raised hopes that the company will continue to expand its presence in the lucrative market.