Salesforce.com 2009 Annual Report Download - page 24

Table of Contents
Our business could be adversely affected if our customers are not satisfied with implementation and customization services provided by us or our
partners.
Our business depends on our ability to satisfy our customers, both with respect to our CRM service and platform and the professional services that
customize our CRM service and platform to meet our customers' business needs. Professional services may be performed by our own staff, or by a third party
or a combination of the two. Our strategy is to work with third parties to increase the breadth of capability and depth of capacity for delivery of these services
to our customers. If a customer is not satisfied with the quality of work performed by us or a third party or with the type of services or solutions delivered,
then we could incur additional costs to address the situation, the profitability of that work might be impaired, and the customer's dissatisfaction with our
services could damage our ability to obtain additional work from that customer. In addition, negative publicity related to our customer relationships,
regardless of its accuracy, may further damage our business by affecting our ability to compete for new business with current and prospective customers.
Any failure to protect our intellectual property rights could impair our ability to protect our proprietary technology and our brand.
If we fail to protect our intellectual property rights adequately, our competitors might gain access to our technology, and our business might be harmed.
In addition, defending our intellectual property rights might entail significant expense. Any of our trademarks or other intellectual property rights may be
challenged by others or invalidated through administrative process or litigation. While we have a few U.S. patents and many U.S. and international patent
applications pending, we may be unable to obtain patent protection for the technology covered in our patent applications. In addition, our existing patents and
any patents issued in the future may not provide us with competitive advantages, or may be successfully challenged by third parties. Furthermore, legal
standards relating to the validity, enforceability and scope of protection of intellectual property rights are uncertain. Effective patent, trademark, copyright and
trade secret protection may not be available to us in every country in which our service is available. The laws of some foreign countries may not be as
protective of intellectual property rights as those in the U.S., and mechanisms for enforcement of intellectual property rights may be inadequate. Accordingly,
despite our efforts, we may be unable to prevent third parties from infringing upon or misappropriating our intellectual property.
We might be required to spend significant resources to monitor and protect our intellectual property rights. We may initiate claims or litigation against
third parties for infringement of our proprietary rights or to establish the validity of our proprietary rights. Any litigation, whether or not it is resolved in our
favor, could result in significant expense to us and divert the efforts of our technical and management personnel.
If we fail to develop our brands, our business may suffer.
We believe that developing and maintaining awareness of the salesforce.com brand and our other brands is critical to achieving widespread acceptance
of our existing and future services and is an important element in attracting new customers. In the past, our efforts to build our brands have involved
significant expense. Brand promotion activities may not yield increased revenue, and even if they do, any increased revenue may not offset the expenses we
incurred in building our brands. If we fail to successfully promote and maintain our brands, or incur substantial expenses in an unsuccessful attempt to
promote and maintain our brands, we may fail to attract enough new customers or retain our existing customers to the extent necessary to realize a sufficient
return on our brand-building efforts, and our business could suffer.
Sales to customers outside the United States expose us to risks inherent in international sales.
Because we sell our service throughout the world, we are subject to risks and challenges that we would otherwise not face if we conducted our business
only in the United States. For example, sales in Europe and Asia Pacific together represented approximately 30 percent of our total revenues for the year
ended January 31, 2010,
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