Salesforce plans 9% hike in price of some cloud products

CRM major Salesforce said it will increase prices for some of its cloud and marketing tools by an average 9 percent from August.
Salesforce technology for retailThe prices for Tableau, Sales Cloud, Service Cloud, Marketing Cloud and Industries will cover new and existing customers, Salesforce said.

This will be the first price hike in seven years for the maker of software for customer relations management.

This development assumes significance as Salesforce and several technology companies are increasing their spending to include generative artificial intelligence (AI) to their products and services.

Salesforce has over the past seven years invested more than $20 billion in research and development to add new features, including generative AI tools, to its software.

The price hike comes as revenues from cloud services that grew at a scorching pace during the pandemic lockdown have started to slow.

Worldwide IT spending is projected to increase at 5.5 percent to $4.6 trillion in 2023, according to the forecast by Gartner in April.

“CIOs face a balancing act that is evident in the dichotomies in IT spending. For example, there is sufficient spending within data center markets to maintain existing on-premises data centers, but new spending has shifted to cloud options, as reflected in the growth in IT services,” said John-David Lovelock, Distinguished VP Analyst at Gartner.

“The IT services segment will continue its growth trajectory through 2024, largely driven by the infrastructure-as-a-service market, which is projected to reach over 30 percent growth this year. For the first time, price is a key driver of increased spend for cloud services segments, rather than just increased usage.”

Big cloud players such as Microsoft, and Alphabet have come under pressure as enterprise clients look to optimize their cloud spending amid rising cost of borrowing, Reuters news report said.

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