Wall Street thinks Salesforce could fix one big flaw in its business by following Oracle

Salesforce is one of the largest and fastest growing cloud software companies in the world. It's no surprise that its share price is at a record high, giving it a market cap of $53 billion.

But there seems to be one glaring weakness in Salesforce's business that could potentially hurt its long-term growth: slow overseas sales.

According to market research firm Trefis, Salesforce's business is too concentrated in the Americas region and that could serve as "the one chink in the company's armor," as it seeks to become the fastest software company to get to $10 billion in revenue.

"The company remains firmly rooted in North America with very limited operations in Europe, Asia Pacific and Japan," Trefis wrote in a recent note. "For consistent long term growth, it needs to expand its horizon beyond the Americas and establish a foothold in these lucrative overseas markets also."

Indeed, in its latest quarter, Salesforce saw over 73% of its $1.7 billion revenue come from the Americas region. Within the region, 95% of the sales came from the US. No other country represented more than 10% of total revenue, according to its quarterly filing.

The bigger problem may be that growth is slowing in the non-American markets. Europe, which accounts for about 18% of total revenue, only grew about 17% year-on-year in the first nine months of this year, compared to 37% in the year before that. Asia Pacific, likewise, saw its growth decelerate to 12.4% year-over-year from 22% the previous year, during the first nine months of the year.

Contrast to Oracle

Trefis points out that Salesforce's weak presence overseas is in stark contrast to Oracle, one of its biggest rivals that's playing catch up in the cloud software space. Oracle has been aggressively expanding its sales teams in overseas markets, where more than 40% of its total sales comes from (but it's unclear how much of that is from selling cloud software).

"Salesforce's strategy of focusing almost exclusively on its home ground is in contrast to rivals like Oracle, which is steadily expanding its presence in the emerging markets," Trefis wrote. "While Oracle is far behind Salesforce in terms of presence in cloud, the latter still stands the risk of losing out on the first mover's advantage by ignoring overseas markets."

Salesforce seems to be aware of this. It built new data centers in the UK, France, Germany, and Japan over the past year, while Salesforce CEO Marc Benioff has been spending more time in the European region lately. During its August earnings call, Benioff said he's spent the majority of his time in Europe and the company's paying more attention to the region more than ever before.

But the numbers haven't been translating into robust growth yet, and it may take a while until we see significant progress.

"Salesforce is a relatively young company. It'll be natural to expand next to Europe, and the CEO spending more time over there is probably designed to help accelerate that," Wedbush analyst Steve Koenig told us previously. "But do I expect a big boost? No. I think it'll be more of a slow and steady progress."