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Salesforce.com sees Microsoft Azure as validating SaaS

Salesforce.com sees Microsoft Azure as validating SaaS

The Asia Pacific is now the fastest-growing region for Salesforce.com -- which this week announced that it had become the world's very first billion dollar enterprise cloud computing company.

For the full fiscal year 2009, the company -- which has the slogan 'Success, not Software' - reported overall revenue of about US$1.077 billion, an increase of 44 per cent from the previous year.

While other software companies are struggling with banking crisis pain, Salesforce.com announced that subscription and support revenues were $984.6 million for the year, an increase of 45 per cent, while professional services revenue rose 35 per cent to $92.2 million.

In Singapore for a company annual sales 'kick off', Lindsey Armstrong, Salesforce.com's executive vice president for international enterprise sales, said that cloud computing was now mainstream.

"For the first time, consumer-led technologies are influencing strongly what goes on in the enterprise," Armstrong said. "Cloud computing has been mainstream for years, it just hasn't been in the enterprise consciousness as much as for consumers and it's been a very difficult flip for a lot of vendors to take, because most of the mainstream vendors are not used to being led by consumers."

Microsoft's 'great validation'

With Microsoft having recently announced that its cloud platform 'Azure' would likely go live this year, Armstrong said that "Any time a known monopolist enters the market place you should sit up and take notice but, firstly it's a great validation".

"When Microsoft, a known follower rather than a leader in most things Internet-related, you can be pretty sure cloud computing is mainstream now, when they've been dragged kicking and screaming to the market," she said.

"Microsoft is a very powerful company with large marketing (resources) and they've done a pretty good job of marketing cloud computing for Salesforce, and I think that's been very helpful to us.

"Any of these big companies, not just Microsoft, in this economy, where your survival depends on you cannibalizing a known and strong revenue stream, it's a very difficult economic decision you are trying to make. I think it's an invidious position and there's no good answer for those companies, whether you're Oracle, SAP or Microsoft.

Armstrong said she believed that Salesforce's 'real competition' was going to be 'pure-play' (cloud computing) companies, that don't even exist yet.

"I think these (current) hybrid companies will find that as long as this economy is uncertain in any way, it's very hard to 'kill your own children' and that's what these guys are being asked to do (by entering cloud computing)."

Customers the best salespeople

Armstrong said satisfied customers were Salesforce's best salespeople -- "one successful customer will tell 10 of its friends" - and CIOs usual found that the cloud services outperformed what they could do on-premise. The current banking crisis made it even more compelling for Asia Pacific enterprises to investigate innovative technologies.

She said, on average Salesforce customers enjoyed a 17 per cent profit margin improvement, their customer win rate goes up 27 per cent, and customer retention, key in this economy, on average increased by 30 per cent. Productivity, she said, went up 36 per cent. The average cloud project took two to six weeks to go live.

Other cloud benefits, says Armstrong, include lower risks, faster innovation and ease-of-deployment of cloud computing, without the need for heavy capital investment.

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