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Cloud computing vendor Salesforce.com surpasses $2b

Rosemary Cafasso

Marc Benioff, Salesforce.com’s chairman and CEO, said the company is on its way to becoming one of the top five software companies in the world.

“That is our next goal,” Benioff said in an earnings conference call Thursday.

Salesforce.com crossed the $2 billion sales mark when it announced that it brought in $504 million in revenue for the quarter ending April 30, 2011. The quarter’s results are a 34% increase compared with the same quarter last year and, when combined with last year’s revenue of $1.6 billion, give the company a $2 billion revenue run rate.

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Despite the growth, Benioff acknowledged that the rapid changes with Web 2.0 technologies are creating big challenges for companies as they try to figure out how to best incorporate more open, social, and mobile technologies into their enterprise strategies.

“This quarter, I met with 170 customers,” Benioff said. “The reason why is the [Web 2.0] shift is so big, so broad and so unique that I personally felt I had to get out and talk to customers about what they are going through.”

Benioff said he wants Salesforce to continue to partner with companies so they can address these issues together. In the future, this will even include a marketing cloud offering from Salesforce.com.

Benioff confirmed the acquisition of Radian6 , a maker of social media monitoring tools, makes a good start for a marketing cloud, but it is not “an urgent item on my agenda.”

“We just took delivery of Radian6, and we are just starting to understand what customers want,” Benioff added. “Before we rush ahead, we are very cautious about doing that, because if we build that out right now, what will suffer? Will we have our eye off the ball in one of these other critical areas?"

With a marketing cloud lower on the list, Salesforce.com's core CRM application remains central to the company's future, even though Benioff dismissed the idea that it is in fact a CRM application.

Benioff described the development platform as “the heart and soul of the company” during a question-and-answer session of Thursday’s conference call. “It is our third-most-used feature,’’ he said. “We don’t have a CRM app. It really is a platform. It is about our customers getting in there to customize their fields, to write the triggers, to add social networking, to tie into our APIs.”

Salesforce.com also added 130,000 developers to the Force.com platform in the last 12 months, bringing the total developer count to 380,000. The addition of the Heroku development platform, which it picked up in an acquisition last year, is expected to play a big role here, Benioff said.

Meanwhile, Benioff was characteristically dismissive of his competition and claimed to have beat Microsoft and Oracle Corp. on many deals in the past quarter. He said Microsoft’s “desperate strategy’’ of selling “highly proprietary” products has had the same impact on Salesforce.com as Microsoft’s Windows tablet and Zune had on Apple Inc’s iPad and iPod market penetration.

“We call Microsoft’s strategy ‘the Zune strategy,’” he added

Benioff skewered Oracle as well, saying the company is trying to get customers to “load proprietary software onto proprietary mainframes, a strategy made popular by IBM in the ’60s.”

The chairman said Salesforce netted 5,400 new customers last quarter, bringing its total customer base to 97,000. During a question-and-answer session, Benioff was asked to characterize what constitutes a big customer win. “We are regularly seeing eight-digit deals,” he said.

 


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