The server outage that caused Salesforce to go down for almost all day last week could cost the company nearly $20 million, according to a note published by the financial services firm D.A.
"Depending on Salesforce s response and affected customers service level agreements, we estimate this outage could impact current quarter revenue guidance by $20 million," the note said.For a company that's on track to generate over $8 billion in revenue this year, a $20 million hit won't be much of a dent.
But it could lead to more long-term problems, such as trust and reliability issues, as it's almost unprecedented for a cloud service platform to suffer a day-long server disruption.On top of that, as we previously reported, some of the smaller customers do not have service level agreements that would have compensated for the service disruption and data loss.
"While any repercussions arising from this outage remains to be seen e.g., increased customer churn , this outage is clearly a short-term headwind for a company trying to become a standard platform for business-critical enterprise applications that may cause customers to question the reliability of the platform," DiFucci wrote in a note.The estimated $20 million loss won't have any impact on Salesforce's first quarter earnings, as the outage happened during the company's second fiscal quarter.
Plus, the company has been placing more focus on improving profitability in recent quarters, a positive sign for investors.Here is what analysts are expecting, according to Yahoo Finance:Q1 non-GAAP earnings per share EPS : $0.23, up from $0.16 in Q1 2015.Q1 Revenue: $1.89 billion, up about 25.3% from $1.51 billion in the year-ago period.
We view Salesforce.com as the company in our coverage universe most leveraged to this massive technology refresh and expansion cycle across the CRM market," Credit Suisse wrote in a note Wednesday.NOW WATCH: How to see everything Google knows about youLoading video...