Pricing increase won’t be ‘material growth driver’ for Salesforce, says Wolfe

After Salesforce announced it will be increasing list prices an average of 9% across Sales Cloud, Service Cloud, Marketing Cloud, Industries and Tableau in August, Wolfe Research analyst Alex Zukin said the firm views the announcement as an incentive to drive customer activity in the quarter. However, based on disclosures at the last analyst day, customers with four-plus clouds drive 85% of Salesforce’s ARR and it is the firm’s belief that “the vast majority of those strategic customers are on ELA’s and are not likely to see an impact from this increase,” so it does not believe that this pricing increase will be “a material growth driver for the business.” Wolfe keeps a Peer Perform rating with no price target on Salesforce shares.