Salesforce to acquire cloud firm Demandware for $2.8B

SAN FRANCISCO — Cloud computing giant Salesforce.com is jumping into the e-commerce game with Wednesday's announcement that it will acquire Demandware for $2.8 billion.

Shares of Salesforce (CRM) were down 1% in midday trading, while Demandware (DWRE) shares surged 55%.

Founded in 2004 and based in Massachusetts, Demandware provides big retailers such as Adidas and Brooks Brothers with their cloud-based e-commerce solutions. Salesforce, founded here in 1999 by Marc Benioff, built its $56 billion market cap by helping companies streamline their sales operations via subscription-based cloud software.

In buying Demandware, Salesforce is jumping into a lucrative space whose players include German giant SAP and Silicon Valley's Oracle, where Benioff was a top salesman. In 2019, U.S. companies will spend $2 billion on e-commerce software, a doubling from 2014, according to Forrester Research.

Salesforce is banking on corporate clients gradually shifting away from hosting their own e-commerce platforms and transitioning to software-as-a-service, or SaaS.

"Salesforce will be well positioned to deliver the future of commerce as part of our Customer Success Platform and create yet another billion dollar cloud," Salesforce CEO  Benioff said in a statement Wednesday.

The all-cash offer values Demandware at $75 a share, Salesforce.com confirmed in a statement. The deal will close during the second quarter of Salesforce's 2017 fiscal year.

Contributing: Marco della Cava in San Francisco

Follow Brett Molina on Twitter: @brettmolina23.