For the quarter ending April 2005 the hosted market maker saw revenue soar by 84% compared to the previous year, to $64.2m. Net income grew a headline-grabbing 902% year on year to come in at $4.4m, while also managing a 22% sequential increase.
Although the actual sums are comparatively modest the rate of increase on both a yearly and sequential basis shows that Salesforce.com continuities to tap into an unfulfilled need. With the growth rate also indicating that the market is still in a fairly early stage, there is also plenty of opportunity for continued growth while the lack of a strong direct challenger also confirms Salesforce.com’s position.
Although there are a growing number of hosted suppliers they either have a different proposition such as RightNow Technologies’ CRM service focus or NetSuite’s complete suite; target a different platform as is the case with open source-based SugarCRM; or have failed to gain momentum as illustrated by Siebel and its on demand offering and SalesNet.
We believe the continuing strength of our business and results, in contrast to what proved to be another challenging quarter for traditional software vendors, is further evidence that we are in the next phase of the on-demand revolution, said CEO Marc Benioff.
During the last quarter Salesforce.com increased the number of subscribers by 40,000 to 267,000, an 83% year on year increase and 18% sequentially. As it had 227,000 on January 31, 2005 the numbers suggest that either it is not suffering attrition or perhaps that customers are locked into contracts and a key turnover timeline has not been reached.
As Salesforce.com develops this will be a key metric to watch. Siebel is already showing signs of attrition. Earlier this year it said it had 28,000 subscribers and had added 5000 new subs, but due to attrition its total was hovering at around 30,000.
Salesforce.com expects to achieve revenue of $68m to $70m in the current quarter and has raised guidance for the full year from $282m to $287m, to a range of $297m to $302m.
