Salesforce has announced that it will be raising its prices on some products, which has been great news for its shares which quickly jumped over 3% as a result.
The software company made the announcement overnight, stating that it will be increasing prices across Sales Cloud, Service Cloud, Marketing Cloud, Industries and Tableau by an average of 9%.
Here’s the breakdown:
- Professional Edition: US $80 (up US$5)
- Enterprise Edition: US$165 (up US$15)
- Unlimited Edition US$330 (up US$30)
According to Salesforce, these new prices will be comparable in other countries, such as Australia, as well.
Get daily business news.
The latest stories, funding information, and expert advice. Free to sign up.
The changes will come into effect in August.
The last time Salesforce increased its list price was back in 2016 and since then it has dropped 22 new releases. According to the company it has invested more than US$ 20 million in research and development in the years since,
AI appears to be at the forefront of the price change, with the company highlighting its recent efforts in the space. As we know, AI isn’t cheap. The graphics cards (GPU) alone that are needed for AI ventures, particularly at a business level, are both expensive and hard to get ahold of. Even Elon Musk was rumoured to have purchased thousands of them for his own AI business.
As we saw back in May, leading GPU manufacturer, NVIDIA, saw a 24.37% stock jump after posting its quarterly results, revealing a prospective US$11 billion by the end of July. This was largely due to the surging demand for its GPUs for AI purposes.
As for the cost, its premier H100 chipset, which has a focus on generative AI, has a price tag of US$40,000. And some third-party sellers are flogging it for even more.
“Customer success is at the core of Salesforce. Nearly every company in the world right now is exploring how generative AI can help drive efficiency and productivity for their business. Salesforce is leading the way in delivering trusted generative AI for the enterprise and helping customers in all industries adopt and deploy AI,” the company said in a statement.
Salesforce has been pushing harder into AI over the past few months. Back in March, it announced a partnership with OpenAI to bring ChatGPT to Slack. It also announced its own GPT generative AI pilot at the time, EinsteinGPT.
In May both Slack GPT and Einstein GPT were introduced to Slack, with an aim to build AI natively into the platform for business use.
And this news has certainly been good for Salesforce’s stock price, which at the time of writing had seen a 3.93% jump. While this is an expected outcome with a price increase, shareholders have to be happy with that.