Salesforce.com 2009 Annual Report Download - page 13

Table of Contents
and over $700.0 million as of January 31, 2009. Unbilled deferred revenue represents future billings under our non-cancelable subscription agreements that
have not been invoiced and, accordingly, are not recorded in deferred revenue. We expect that the amount of unbilled deferred revenue may change from
year-to-year for several reasons, including the specific timing and duration of large customer subscription agreements, varying billing cycles of non-
cancelable subscription agreements, the specific timing of customer renewals, foreign currency fluctuations, the timing of when unbilled deferred revenue is
to be recognized as revenue, and changes in customer financial circumstances. For multi-year subscription agreements billed annually, the associated unbilled
deferred revenue is typically high at the beginning of the contract period, zero just prior to renewal, and increases if the agreement is renewed. Low unbilled
deferred revenue attributable to a particular subscription agreement is often associated with an impending renewal and may not be an indicator of the
likelihood of renewal or future revenue from such customer. Accordingly, we expect that the amount of aggregate unbilled deferred revenue will change from
year-to-year depending in part upon the number and dollar amount of subscription agreements at particular stages in their renewal cycle. Such fluctuations are
not a reliable indicator of future revenues.
Sales, Marketing and Customer Support
We organize our sales and marketing programs by geographic regions, including North America, Europe, Japan, and the Asia Pacific region other than
Japan.
Direct Sales
We sell subscriptions to our service primarily through our direct sales force comprised of inside sales, which consists of personnel that sell to customers
primarily by phone, and field sales personnel, that are primarily based in geographic territories comprising customers and prospects. Both our inside sales and
field sales personnel are supported by telesales representatives who are primarily responsible for generating qualifying leads. Our small business, general
business and enterprise account executives and account managers focus their efforts on small, medium-size and large enterprises, respectively.
Referral and Indirect Sales
We have a network of partners who refer customer prospects to us and assist us in selling to these prospects.
The network includes consulting firms, other technology vendors, systems integrators and partners in markets where we do not have a large direct sales
presence. In return, we typically pay these partners a fee based on the first-year subscription revenue generated by the customers they refer. We expense these
fees at the time the customer signs the subscription service contract.
We also continue to develop distribution channels for our subscription service.
Marketing
Our marketing strategy is to continually elevate our brand and generate significant demand for our offerings. We use a variety of marketing programs to
target our prospective and current customers, partners, and developers.
Our primary marketing activities include:
• press and industry analyst relations to garner third-party validation and generate positive coverage for our company and product strategy;
• user conferences and launch events, as well as participation in trade shows and industry events, to create customer awareness and prospect
enthusiasm;
• search engine marketing and online and print advertising to drive traffic to our Web properties;
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