Salesforce.com Relishing Its New Elasticity

Salesforce.com is one of the companies we write about in the Elastic Enterprise. CEO Marc Benioff believes Wall St doesn’t quite understand what he’s achieving (though his P/E is 90). He added 2,500 employees over the past year, mostly in the U.S., an increase of 47%. He also delivered 37% growth.

The complaint is that Salesforce.com is not delivering the margins. But listen to how Benioff responds to this.

Benioff said in a recent earnings call: “I am very committed to expanding our margins. But I just delivered a 37% growth year. I think it is a mistake to be delivering 25% growth right now. This is the renaissance! This is the great time of the cloud! We’ve all changed how we’re using computers and there needs to be an enterprise company that can deliver this at scale.”

The language of scale is precisely the issue we are addressing in The Elastic Enterprise. If Benioff stays on target Salesforce.com will have increased its revenues from $1 billion in 2009 to $3 billion in its 2013 fiscal year.

Salesforce’s developer platform Force.com now has 480,000 developers, who have built one million applications on Heroku, which is a Cloud application development platform – in other words developers anywhere can use Heroku to develop their applications without having to worry about servers or admin.

Outside developers working on Facebook applications now have the option to use Heroku,  a “huge catalyst” says Benioff. It’s like taking a slice of the Facebook developer community for yourself. Heroku competes with Amazon’s EC2 services.

In our terms Salesforce.com is a classic elastic enterprise, scaling its operations beyond the cost of managing growth. 480,00 developers, 1 million applications reflects a huge partner/customer ecosystem that positions Salesforce.com to switch its activities beyond CRM and in fact to begin radical adjacency moves at will.

The growth prospects are limited mostly by Benioff’s imagination, capacity to lead and strategic judgment. The operating system to supercharge growth is in place.

One thought on “Salesforce.com Relishing Its New Elasticity

  1. Great post Haydn!

    I would add one more limitation to SFDC growth prospects. Benioff has the imagination and the vision here, but his sales force is just selling software. If the goal is to transform legacy companies into Social Enterprises, you need strategy and process people who can help companies evolve.

    It appears that SFDC is trying to add Services Consultants to their System Integration partners, but it isn’t an effort with any sense of urgency. Which means companies with a legacy orientation, will adopt Social Enterprise at their own speed. During this slow-growth period, that speed is dead-slow.

    Michael Glavich
    Business Accelerator
    Next Generation Enterprises ThinkTank

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