Analysts are bullish on long-term vision for Salesforce Inc's (CRM) integration with software platform MuleSoft, but the success of the integration is still challenging to quantify.
Salesforce stock is sliding 2.3% as of 10:30 a.m. in New York, and this comes despite a positive contribution of $122 million in revenue from its largest-ever acquisition. MuleSoft, a software company which aims to integrate older on-premise data centers to the cloud.
In raw number terms, the company is helping expand the platform greatly as company reported that the Salesforce platform grew 32% in the second quarter, but an even more staggering 54% when including MuleSoft.
Jim Cramer's AAP Alerts team was optimistic that this trend will continue.
"It looks like MuleSoft has fit seamlessly with Salesforce.com's mission and has unlocked trapped data from legacy system," they wrote after the earnings last night. "We expect MuleSoft to be an accelerator to Salesforce's businesses."
Company executives talked up integration results and customer interest on the earnings call.
"You can't have a conversation right now with a customer without talking about MuleSoft," co-CEO Keith Block told analysts last night, outlining the key part the acquisition has to play moving forward. "Everybody wants to talk about the importance of integration as it relates to digital transformation."
Still, the exact pace of integration and upside for Salesforce is unclear.
The new subsidiary, which the company purchased for $6.5 billion on May 2, remains a target for caution based on the uncertainty of its short term revenue integration into third quarter earnings, according to RBC Capital Markets AVP Yaoxian Chew.
He said that the ongoing integration of MuleSoft on this basis is adding to uncertainty in projected billings, making them "lumpier", which is contributing to the stock's decline in trading today.
