Salesforce announced it would raise the prices of some of its products, which was good news for the company’s stock, which quickly surged more than 3% as a result.
The software company made an announcement that night, announcing an average 9% price increase for Sales Cloud, Service Cloud, Marketing Cloud, Industry, and Tableau.
The breakdown is as follows.
- Professional version: 80 USD (5 USD increase)
- Enterprise Edition: US$165 (US$15 increase)
- Unlimited $330 ($30 more)
Salesforce says these new prices will be similar in other countries, such as Australia.
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The changes will take effect in August.
Salesforce last raised its list price in 2016, and since then has reduced prices on 22 new releases. Since then, the company says it has invested more than US$20 million in research and development.
AI appears to be at the forefront of price volatility, and the company highlights its recent efforts in this area. As we all know, AI doesn’t come cheap. Even the graphics cards (GPUs) required for AI startups, especially at the business level, are expensive and hard to come by. Even Elon Musk is rumored to have bought thousands of them for his AI business.
As we saw in May, leading GPU maker NVIDIA saw its share price rise 24.37% after its quarterly earnings release, revealing a potential US$11 billion mark by the end of July. This is largely due to the surge in demand for GPUs for AI applications.
As for cost, the company’s top-of-the-range H100 chipset, which focuses on generative AI, costs $40,000. And some third-party sellers are selling at even higher prices.
“Customer success is at the heart of Salesforce. Today, nearly every company in the world is exploring how generative AI can help their business become more efficient and productive. We are at the forefront of delivering generative AI that is capable and helping customers across all industries adopt and deploy AI,” the company said in a statement.
Salesforce has ramped up its AI efforts in recent months. In March, the company announced a partnership with OpenAI to bring ChatGPT to Slack. It also announced his EinsteinGPT, his GPT-generated AI pilot that was unique at the time.
Both Slack GPT and Einstein GPT were introduced to Slack in May with the goal of embedding AI natively into the platforms you use for your business.
And the news is certainly positive for Salesforce’s stock, which was up 3.93% at the time of writing. This is an expected outcome with price increases, but shareholders should be happy with it.
