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Starboard Value goes after 3 tech companies with cost-saving ax • londonbusinessblog.com

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News that activist investor Starboard Value has its eyes on Salesforce which landed with a bang this week. But the well-known investment group, fresh from a bruise with Box, has a few other tech companies in its sights.

Starboard takes on the task three tech shops for what it considers to be underperformance: the CRM giant, yes, but also Wix and Splunk. A more diverse 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 people who want a website without too much to do with coding or design. Splunk, meanwhile, is a legacy software company focused on processing log data for things like security vulnerabilities or performance impacting events.

Obviously, the main draw of the Starboard scrap is Salesforce, but let’s look at the companies one by one to understand why the investor thinks each company is not living up to its true potential.

Salesforce in context

Salesforce is best known for CRM, the original core product. Yet today it is much more than that, marketing tooling, service elements and too many other things to list. In recent years, Salesforce has used its significant resources to move into adjacent territories, spending nearly $50 billion to build Slack ($27.7 billion), Tableau ($15.7 billion) and MuleSoft ($6,0 billion) among others. 5 billion).

What is Starboard’s problem with Salesforce’s performance? The investment giant, in particular, has nice things to say about the CRM king, pointing to its “market-leading position” in a number of sectors, something we can agree on.

But when Starboard looks at the company’s long-term plans, it’s confused that Salesforce offers slower growth than certain competitors — no big surprise given it’s much larger scale — but without a compensating increase in the rate at which it generates operating margin.

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