Salesforce ended the regular trading session up $6.20 at $17.20. That was substantially higher than the company's, set late Tuesday, when it raised $110 million from investment bankers.
Salesforce, which provides subscription-based customer relationship management software online, outdid the first-day performance of Blackboard, an online educational-software company that posted a 43 percent gain on its first day of trading. Blackboard's IPO debuted last Thursday and generated a 44 percent gain from its IPO price of $14 a share.
To date this year, 16 tech companies have launched IPOs, according to Thomson Financial.
On hand to ring the opening bell at the New York Stock Exchange was Marc Benioff, Salesforce's chief executive. For Benioff, the moment capped a lengthy process to take his company public, after the Securities and Exchange Commission had forced ato address concerns about accounting methods and a profile of Benioff that appeared in The New York Times.
Salesforce firstplans in December.
The IPO is seen as a test of a new business model that could shake up the software industry. The company uses a subscription-based method to sell software that businesses install to help manage their customer relationships, a sales model that's gaining popularity among corporate buyers. Analysts predict that the success of Salesforce's subscription model and others like it could pose a challenge to old-guard software companies, including SAP, Siebel Systems, PeopleSoft and Oracle.
And for direct competitors such as Salesnet, Salesforce's successful launch is welcome.
"We're pleased that Salesforce has finally done its IPO and we're pleased with the markets reception," said Salesnet CEO Mike Doyle. "We think it further validates this whole area."
Salesnet is also considering an IPO, but Doyle said the company will probably wait until next year, when the company expects to be larger and substantially more profitable. Salesnet has raised $32 million in three rounds of venture financing to date.
Salesforce, however, has raised $110 million with its IPO, with the bulk of that money going to the company and a smaller portion to investment bankers that helped take it public. Doyle said his company is not threatened by the additional capital Salesforce will have at its disposal to spend on various parts of its business.
Investors also apparently favor the company's model, showing strong demand for the IPO shares prior to the stock's debut. When Salesforce set its IPO price Tuesday, it exceeded the high end of its pricing range of $9 to $10 a share, which itself had been .
Salesforce was only one of three tech IPOs this year to price its offering above its expected range, Thomson Financial's Peterson said. The other two were Atheros Communications, which priced at $14 a share after having set an IPO range of $9.50 to $11.50, and Linktone, which set its IPO at $14 a share, up from a range of $10 to $12. Those IPOs took place in February and March, respectively.
Analysts say that Salesforce may help to reignite the beleaguered tech IPO market, which has fallen on particularly hard times since the Internet bubble burst. In addition to Salesforce.com, there are 16 other IPOs scheduled to price this week in various industries, which would mark the busiest period since August 2000, according to Peterson.
The impending IPO ofalso has captured widespread attention.