Salesforce to raise prices of some cloud products from August

(Reuters) – Salesforce, a leading software provider for customer relations management, announced that it will be implementing a price increase of approximately 9% for some of its cloud and marketing tools starting in August. This news has led to a nearly 4% rise in the company’s shares during early trading on Tuesday. This price hike marks Salesforce’s first in seven years and comes at a time when technology companies, including Salesforce, are actively integrating generative artificial intelligence (AI) into their products and services.

Over the past seven years, Salesforce has committed over $20 billion to research and development in order to enhance its software with new features, notably generative AI tools. However, this price increase is also a response to the slowdown in revenue growth from cloud services since the pandemic lockdown. Enterprise clients, in an effort to optimize their cloud spending amidst rising borrowing costs, have exerted pressure on the growth of major cloud players such as Microsoft, Amazon.com, and Alphabet.

The new prices for Tableau, Sales Cloud, Service Cloud, Marketing Cloud, and Industries will apply to both new and existing customers, according to Salesforce. This move will provide the company with additional financial resources to continue investing in research and development and improving its offerings.

Investors have responded positively to the news, with Salesforce shares experiencing a significant boost. As the demand for cloud-based services continues to evolve, it will be interesting to observe how other technology companies respond to this price increase and the ongoing pursuit of generative AI integration into their respective products and services.

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(Reporting by Akash Sriram in Bengaluru; Editing by Shweta Agarwal)

Credit: The Star : Tech Feed