By Rachael King 

Salesforce.com Inc. on Tuesday introduced a new e-commerce service based on its $2.8 billion acquisition of Demandware Inc. in July.

The Salesforce Commerce Cloud is intended to help customers set up online storefronts and in-store tablets and kiosks, adding commerce functions to the company's portfolio of software delivered as a service over the internet.

Salesforce is best known for applications that help salespeople track customer contacts and marketers plan campaigns.

The new service faces stiff competition from Oracle Corp., SAP SE, and International Business Machines Corp., which have strong digital commerce offerings, according to research firm Gartner Inc.

Many larger companies have purchased on-premises commerce software and hardware from these vendors. In contrast, the Salesforce Commerce Cloud operates only as an online service.

Demandware focused mostly on sites for retailers and brands targeting consumers. It counted more than 350 customers, mostly larger retailers, before being acquired by Salesforce, it according to Brent Thill, an analyst with UBS Group AG.

Salesforce, which claims over 100,000 customers, has said it is looking to spur growth.

For Commerce Cloud to aid in that goal, Salesforce will need to adapt Demandware's software to accommodate sales from one business to another, said Gene Alvarez, managing vice president at Gartner. For instance, the new service will need to tie in to corporate procurement and purchase order systems, he said. It doesn't yet have these features.

Moreover, Salesforce will need to convince some potential customers to jettison systems they've already bought, Mr. Alvarez added.

The world-wide market for digital commerce software will grow to $5 billion in 2018 from about $3.8 billion in 2016, according to market watcher International Data Corp.

By 2020, the U.S. business-to-business digital commerce market is expected to top $1.1 trillion from $780 billion in 2015, a compound annual growth rate of 7.7%, according to Forrester Research.

Other experts see a short-term potential for Salesforce to attract consumer-focused retailers smaller than those that dominated Demandware's customer base of large retailers.

"The big opportunity is to broaden the scope of the solution to address a larger pool of customers in the midmarket," said Mr. Thill of UBS.

Salesforce.com plans to broaden the focus beyond consumer retailers and big brands, said Stephanie Buscemi, the company's executive vice president of product and solution marketing.

The Commerce Cloud will reinforce other Salesforce services, said Ms. Buscemi. For instance, it will help users of the company's Marketing Cloud target shoppers after they've abandoned an online purchase, she added.

Write to Rachael King at rachael.king@wsj.com

(END) Dow Jones Newswires

September 27, 2016 17:51 ET (21:51 GMT)