News that activist investor Starboard Value has its eyes on Salesforce landed with a bang this week. But the well-known investing group, fresh off of a bruising fight with Box, has a few other tech companies in its sights.
Starboard is taking to task three tech shops for what it considers to be underperformance: The CRM giant, yes, but also Wix and Splunk. A more varied set of companies is hard to find in the technology market.
Salesforce needs little introduction at its current scale, but Wix and Splunk are different beasts. Wix is a website builder for folks who want a website without dealing too much with coding or design. Splunk, meanwhile, is a legacy software company concentrating on processing log data for things like security issues or events that affect performance.
Obviously, the main draw to the Starboard scrap is Salesforce, but let’s examine the companies one by one to understand why the investor thinks that each one is failing to meet its true potential.
Salesforce in context
Salesforce is best known for CRM, its original core product. Yet it’s much more than that today, offering marketing tooling, service elements and too many other things to name. Over the last several years, Salesforce has used its considerable resources to move into adjacent areas, spending almost $50 billion to acquire Slack ($27.7 billion), Tableau ($15.7 billion), and MuleSoft ($6.5 billion), among others.
What’s Starboard’s beef with Salesforce’s performance? Notably, the investing giant has kind things to say about the CRM king, noting its “leading market position” across a number of sectors, something that we’d agree on.
But when Starboard looks at the company’s long-term plans, it is confused that Salesforce offers up slower growth than certain peers — not a huge surprise, given that it has far greater scale — but without a compensating increase in the pace at which it generates operating margin.