Salesforce ready to take on Microsoft?

Salesforce, the leader in Customer Relationship Management (CRM) & Cloud Computing, is now officially the first enterprise cloud computing company to hit $1 billion in annual revenues.

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For the full fiscal year 2009, the company reported revenue of approximately $1.077 billion, an increase of 44% from the prior year. Subscription and support revenues were $984.6 million for the year, an increase of 45%, while professional services revenue rose 35% to $92.2 million.

This is a major achievement for both Salesforce as well as the Cloud Computing in general. With 55400 customers, 800+ applications, Salesforce expects a cool 30% growth on revenue this year as well!

Way back in early Jan, 2008 the CEO of Salesforce, Marc Benioff had mentioned “We’re working hard to become the first software-as-a-service company to reach $1 billion”. An event he predicted would happen sometime in Salesforce’s fiscal year 2009 and that has just been accomplished!

How Salesforce is able to this Miracle?

Is it because Salesforce is very innovative right from the beginning? Perhaps they understood quit early that the SaaS is the way to go. They understood that many enterprise users have been affected by the expensive on premises CRM suits with high operating costs to maintain. So, they offered a very easy to use and highly RM suits that customers loved. In addition to that they exposed their APIs to third party developers to integrate and collaborate.

Salesforce introduced a new concept Software development as a service via Force.com where Integrated Development Environment was via Browsers and connect to resources that are part of its Force.com’s platform. A cool idea.

Salesforce introduced Cloud Computing Architecture’s Development-as-a-Service, a long name for what is currently a repackaged Eclipse IDE that’s tied to Salesforce platform resources. The Force IDE is in “developer preview” with no delivery date other than later in 2008. Eclipse is an open source programmer’s workbench into which Eclipse-compatible tools may be plugged and used together.

The Force IDE lets the browser window serve for editing code, tacking errors, storing code in a change control system, or deploying it to servers. Their innovative idea of price per login etc have been highly successful.

Salesforce and Google Apps Alliance?

In Appril, 2008, they even partnered with Google Apps. With integration of Google Apps (Docs, Calendar, Gmail, and Gtalk) with Salesforce online enterprise apps, they are strategically placed to take on Microsoft. Google Apps got exposure to Salesforce’s one million paying business subscribers, and Salesforce in turn became more attractive to the “tens of millions” of business users on Google Apps. Google documents, spreadsheets, and presentation can be created from within Salesforce’s CRM application. GTalk works as the de facto instant messenger within Salesforce.

Salesforce CEO, Marc Benioff mentions that he is embracing Google as another way to undercut Microsoft:

You’ve seen what we have been doing is slowly integrating all of our services with theirs. Certainly the enemy of my enemy is my friend, which makes Google my best friend. I have spoken with a lot of customers who want to get off of Microsoft Word.

With Salesforce for Google Apps, you can now run your favorite desktop applications and your Salesforce applications side by side by accessing Gmail, Google Calendar, Google Talk, and Google Docs all seamlessly from within Salesforce.

Check this wonderful video demonstration by Salesforce here.

All these innovative ideas and alliances must have boosted Salesforce’s revenues and it is evident in the financial results.

Do comment on our view if you disagree!

Source: TechCrunch, InformationWeek and Salesforce

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