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5/22/2008
10:33 AM
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Salesforce.com Reports 50% Revenue Growth

Salesforce.com reported net income of $9.56 million on revenues of $247.6 million in the first quarter and said it signed 2,600 companies and organizations as new customers.

Any pullback in software spending because of a poor economy isn't affecting Salesforce.com -- at least not negatively. The ambassador of software-as-a-service reported a revenue increase of 52% for its first fiscal quarter ended April 30 compared with the same quarter last year, and an increase in its customer base of more than 6%.

Salesforce.com reported net income of $9.56 million, up from $730,000 last year, on revenue of $247.6 million. It signed on 2,600 companies and organizations as new customers in the quarter, and experienced strong growth both inside and outside the United States, particularly in Asia.

Significant customer wins for Salesforce.com's CRM service included Nippon Telephone and Telegraph in Japan, and Areva, a large nuclear power company in France, which Salesforce.com won following a competition for the business with SAP, said Saleforce CEO Marc Benioff in an earnings conference call Wednesday. The Asia Pacific region made up 10% of Salesforce.com's revenue in the quarter, rising 94% from last year's quarter to $24.1 million.

To support its growing Asian customer base, Benioff said Salesforce.com is setting up a new data center in Singapore to deliver its SaaS offerings. Salesforce.com currently operates out of two data centers in the United States. In addition, Salesforce.com is building a network operations center in Singapore to monitor the uptime of the three data centers.

Benioff took a few pot shots at his competitors in the conference call. He claimed he never runs into Microsoft Dynamics CRM Online as competition in the marketplace and has never had a customer ask him about it. In regard to SAP, "their whole on-demand strategy is a huge train wreck," he said. Benioff was referring to SAP's decision earlier this month to delay the further rollout of its Business ByDesign software service while it works out financial and infrastructure kinks.

The jury is still out on how successful Salesforce.com will be with Force.com, its platform as a service offering. Benioff said he's been on a year-long road trip promoting Force.com. He cited Ryder and NBC Universal among the users of Force.com, and said 450 third-party software vendors are selling more than 800 applications that run on Force.com on the company's AppExchange.

But it's hard to know the profitability or sales growth rate of Saleforce.com's offerings related to Force.com since it doesn't break out those numbers in its earnings report and wouldn't provide details about them when asked by analysts during the conference call.

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