Salesforce.com Sees Rise In 2Q Revenue - InformationWeek
IoT
IoT
Cloud // Software as a Service
News
8/21/2009
12:07 PM
50%
50%
RELATED EVENTS
Building Security for the IoT
Nov 09, 2017
In this webcast, experts discuss the most effective approaches to securing Internet-enabled system ...Read More>>

Salesforce.com 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? Salesforce.com 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, Salesforce.com 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 Salesforce.com with their own subscription-based software services in the customer-relationship management area. Although SAP also offers CRM on demand, Benioff said Salesforce.com 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 Salesforce.com 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 Salesforce.com after an Oracle On Demand deployment failed.

Analysts have said the biggest threat to Salesforce.com 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 Salesforce.com to continue on its rapid growth rate, it needs to keep moving beyond the CRM area.

Salesforce.com 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 Force.com cloud computing platform) to monitor patient care, including intake and pharmacy needs. Rasmussen College in Chicago built a student enrollment app that runs on Force.com


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
Comments
Newest First  |  Oldest First  |  Threaded View
How Enterprises Are Attacking the IT Security Enterprise
How Enterprises Are Attacking the IT Security Enterprise
To learn more about what organizations are doing to tackle attacks and threats we surveyed a group of 300 IT and infosec professionals to find out what their biggest IT security challenges are and what they're doing to defend against today's threats. Download the report to see what they're saying.
Register for InformationWeek Newsletters
White Papers
Current Issue
2017 State of IT Report
In today's technology-driven world, "innovation" has become a basic expectation. IT leaders are tasked with making technical magic, improving customer experience, and boosting the bottom line -- yet often without any increase to the IT budget. How are organizations striking the balance between new initiatives and cost control? Download our report to learn about the biggest challenges and how savvy IT executives are overcoming them.
Video
Slideshows
Twitter Feed
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