Salesforce.com 2005 Annual Report Download - page 7

Table of Contents
available or has been difficult to access over the Internet and through laptops and PDAs, full realization of the benefits of sharing access to
information and resources has been hindered.
• Low return on investment. The cost, time and effort required to implement an enterprise CRM application, combined with low user adoption, have
made it difficult for companies to quickly, or ever, realize the benefits of their investment.
• Inability to serve businesses of all sizes. Many small and medium-sized businesses seeking the benefits of CRM have been unable to afford the
costs associated with traditional enterprise software CRM applications.
We believe that the CRM market is one of the first markets to benefit from the new on-demand application services delivery model. As a result of the
high total cost of ownership, low deployment and usage rates, and poor return on investment of traditional CRM software, we believe that businesses are
especially open to a new delivery model for CRM. The emergence of on-demand application services, combined with the deficiencies associated with
traditional CRM software applications, have created an opportunity for a vendor that can provide on-demand CRM application services that have been
specifically designed and built to be delivered over the Internet.
Our Solution
We are the leading provider of on-demand CRM, helping companies better track, manage and share information regarding their sales, customer service
and support, and marketing operations. As of January 31, 2006, our customer base had grown to approximately 20,500 worldwide, and we had approximately
399,000 paying subscriptions. We provide our service to businesses through our proprietary, scalable and secure multi-tenant application architecture, which
allows us to serve large numbers of customers cost-effectively by leveraging a single application code base.
By subscribing to our service, our customers do not have to make large and risky upfront investments in software, additional hardware, extensive
implementation services, and additional IT staff. As a result, our service enables businesses to achieve higher productivity from, and a lower total cost of
ownership for, their CRM solutions.
Key advantages of our solution include:
• Rapid deployment. Our service can be deployed rapidly and provisioned easily, since our customers do not have to spend time installing or
maintaining the servers, networking equipment, security products or other infrastructure hardware and software necessary to ensure a scalable and
reliable service. We believe the average time that a customer requires to deploy our service is significantly shorter than typical, traditional CRM
software deployments. We also offer complementary consulting and training services to assist customers in rapidly deploying and optimizing their
use of our service.
• Enable high levels of user adoption. We have designed our service to be easy-to-use and intuitive. Since our service contains many tools and
features recognizable to users of popular websites such as those of Amazon.com, eBay and Yahoo!, it has a more familiar interface than typical
CRM enterprise applications. As a result, our users do not require substantial training on how to use and benefit from our service. We conduct
extensive surveys of our users to gauge their experiences with our service so that we may determine potential areas of improvement. In addition,
because of the nature of our service, we receive automatic feedback as to which features customers use.
• Lower total cost of ownership. We enable customers to achieve significant savings relative to the traditional enterprise software model. Customers
also benefit from the predictability of their future costs since they pay for the service, which includes upgrades, on a per subscriber basis for the
term of the subscription contract.
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