Cloud // Software as a Service
12:07 PM
50% Sees Rise In 2Q Revenue

The CRM provider announced a year-over-year revenue increase of 20% for its second fiscal quarter ended July 31.

How competitive is the market for on-demand CRM? CEO Marc Benioff puts it this way: "We are seeing our competitors do just about anything to try to win a deal from us."

While many software companies are struggling to achieve any growth at all, announced Thursday a year-over-year revenue increase of 20% for its second fiscal quarter ended July 31, to $316.1 million, while its net income was up 112% to $21.2 million.

Still, Benioff made it clear in a conference call Thursday that Oracle and Microsoft are working hard to win business over with their own subscription-based software services in the customer-relationship management area. Although SAP also offers CRM on demand, Benioff said hasn't seen it in many competitive bids.

CRM is low-hanging fruit for traditional software vendors trying to beef up a presence in cloud computing. That's because if a customer decides to try out a hosted software service, CRM is typically considered the safest bet and requires the least integration with on-premise software systems.

Benioff pointed to several instances where it has won deals in competitive bids with Microsoft and Oracle. Insurance company Marsh chose over those two for sales and marketing automation in the past quarter, and is integrating Salesforce CRM with news feeds and account contact information. The deal calls for 2,500 subscribers initially, but Marsh plans to grow its subscriber base to more than 10,000 people.

Other wins against Oracle in the second quarter include Comcast, Thompson Reuters, NCR, AT&T, Abbot, Waste Management, Capital One Services, BBVA, Bancomar, the Frank Russell Company, and Developers Diversified Real Estate, Benioff said, adding that another SaaS company, SuccessFactors, signed on for after an Oracle On Demand deployment failed.

Analysts have said the biggest threat to is pricing of its CRM services, which typically run higher than Microsoft or Oracle. Benioff indicated those two consistently try to out-price Salesforce on deals, "but customers come back to us."

Still, Benioff realizes that for to continue on its rapid growth rate, it needs to keep moving beyond the CRM area. is making some progress. The company's "Service Cloud," which includes services for call centers and self-service Web portals, and its "Custom Cloud," for developing and running custom applications, represented more than 25% of new business wins, Benioff said. He did not provide details on how much they are contributing to revenues.

Not all of those Custom Cloud applications fall into the general CRM area. For example, Benioff said, Crescent Health Care has developed seven custom applications that run on Salesforce systems (called the cloud computing platform) to monitor patient care, including intake and pharmacy needs. Rasmussen College in Chicago built a student enrollment app that runs on

InformationWeek has published an in-depth report on why businesses shouldn't shrug off Google's upcoming Chrome OS. Download the report here (registration required).

Comment  | 
Print  | 
More Insights
Newest First  |  Oldest First  |  Threaded View
8 Steps to Modern Service Management
8 Steps to Modern Service Management
ITSM as we know it is dead. SaaS helped kill it, and CIOs should be thankful. Hereís what comes next.
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 September 25, 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.