Salesforce.com is arguably the poster boy for software as a service.
The cloud-based customer relationship management offering is the first that comes to mind when SaaS is mentioned, and with good reason: It had sales last year of just over US$4 billion for the fiscal year that ended Jan. 31, 2014, up 33 per cent over the same period a year ago.
Chairman and CEO Marc Benioff expects this fiscal year revenues will hit $5.3 billion.
Still, the company is posting losses — US$232 million this last year, US$270 million the year before. There were small profits in 2011 and 2010.
Chris Kanaracus of IDG News has dipped into the numbers in the just released annual report and found some interesting facts: for example, marketing and sales costs accounted for 53 percent of its total revenue.
Salesforce does have a number of businesses besides CRM. There’s ExactTarget, a marketing automation service; Work.com, for sales performance management; Chatter, an enterprise social network; Service Cloud, a customer service platform and Salesforce 1 for application development.
It is in the nature of cloud services to have losses while chalking up impressive revenues — Amazon comes to mind. As long as revenues are strong, analysts told me in the early years of that company, then profit would not be far behind.
So it was for Amazon. So it may be for Salesforce.