Cloud // Platform as a Service
11:51 PM
Connect Directly
50% Caps Record Year, Eyes Acquisitions

Fourth quarter and full-year financial results top estimates, but CEO Marc Benioff admits needs more Marketing Cloud services muscle.

8 Ways An SMB Makes Most Of
8 Ways An SMB Makes Most Of
(click image for larger view and for slideshow) reported solid financial results for its fourth quarter and fiscal year 2013 ended January 31, but if there's one area where the company needs to bulk up to keep growing quickly in the year ahead, it's in marketing.

Company CEO Marc Benioff acknowledged as much during a conference call with financial analysts after the close of the market on Thursday. Salesforce has already spent more than $1 billion acquiring Radian6 and Buddy Media, the key components of its Marketing Cloud. But with sales, service and marketing initiatives blurring and marketing spending on the rise, Benioff admitted needs to do more.

"We're trying to build a muscle at Salesforce that will enable us to talk comfortably with chief marketing officers and have a holistic conversation about how they're connecting with their customers," Benioff said. "We need to buy more marketing companies, honestly, because there's more for us to do."

Despite this weak spot, Salesforce reported strong results. Fourth quarter revenue reached $835 million, 32% over the year-earlier period and surpassing analysts' average estimate of $831 million, according to Bloomberg. Revenue for the full year reached a new company record of $3.05 billion, an increase of 35% over the prior year.

[ Will's new tag line translate into action? Read's New Message: It's The Customer, Stupid. ]

"No other top-10 software company is growing faster than," Benioff said.

Deals with large companies helped drive the strong results. Salesforce closed more than 150 multi-million-dollar transactions, including nine eight-figure transactions during the quarter.

The strong results led the company to slightly raise its revenue guidance for fiscal year 2014 to $3.82 billion to $3.87 billion (up from $3.80 billion to $3.85 billion previously), which would mark a 25% to 27% year-over-year increase and put Salesforce on a $4 billion annual-revenue run rate by year end.

Benioff fielded plenty of questions about the company's marketing cloud in part because Oracle announced and completed its $870 million acquisition of cloud-based marketing vendor Eloqua since's last earnings call. One analyst pointedly asked whether Salesforce would add business-to -business (B2B) marketing capabilities -- a core focus for Eloqua -- and whether it would look to acquire small or large firms.

"We're going to buy small and big, we're going to be aggressive, and we're going to do a variety of things," Benioff said. "We have to look at B2B, B2C, email marketing and even aspects of social [not covered by Radian6 and Buddy]."

An obvious target for acquisition would be Salesforce partner Marketo, but such a large acquisition would put an equally large dent in the company's finances. lost money in fiscal year 2013, and the $689 million acquisition of Buddy Media didn't help. The company posted a fourth-quarter net loss of $20.8 million, compared with a $4.1 million loss a year earlier.

Benioff made no bones about his plans to keep investing to drive growth. "We have a clear vision of building a unified customer platform," he said, alluding to this week's announcement of the firm's new "become a customer company" tag line.

Responding to a question about Oracle's Eloqua buy and customer experience initiative, Benioff quipped, "Oracle wants to be the Exadata company; Salesforce wants to be the customer company."

Comment  | 
Print  | 
More Insights
Newest First  |  Oldest First  |  Threaded View
D. Henschen
D. Henschen,
User Rank: Author
3/1/2013 | 5:28:56 PM
re: Caps Record Year, Eyes Acquisitions
You might think Benioff unwisely sent Marketo's (and other marketing firms) buy price skyrocketing talking about acquisitions during yesterday's call, but that happened the day Oracle announced its Eloqua acquisition.
Google in the Enterprise Survey
Google in the Enterprise Survey
There's no doubt Google has made headway into businesses: Just 28 percent discourage or ban use of its productivity ­products, and 69 percent cite Google Apps' good or excellent ­mobility. But progress could still stall: 59 percent of nonusers ­distrust the security of Google's cloud. Its data privacy is an open question, and 37 percent worry about integration.
Register for InformationWeek Newsletters
White Papers
Current Issue
Top IT Trends to Watch in Financial Services
IT pros at banks, investment houses, insurance companies, and other financial services organizations are focused on a range of issues, from peer-to-peer lending to cybersecurity to performance, agility, and compliance. It all matters.
Twitter Feed
InformationWeek Radio
Archived InformationWeek Radio
Join us for a roundup of the top stories on for the week of October 9, 2016. We'll be talking with the editors and correspondents who brought you the top stories of the week to get the "story behind the story."
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Flash Poll