Salesforce.com 2004 Annual Report Download - page 15

Download and view the complete annual report

Please find page 15 of the 2004 Salesforce.com annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 125

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125

Table of Contents
Competition
The market for CRM applications and enterprise business applications generally is highly competitive, rapidly evolving and fragmented, and subject to
changing technology, shifting customer needs and frequent introductions of new products and services. We compete primarily with vendors of packaged
CRM software, whose software is installed by the customer directly or hosted by a first generation ASP on the customer's behalf, and companies offering on-
demand CRM applications. We also compete with internally developed applications and face, or expect to face, competition from enterprise software vendors
and online service providers who may develop and/or bundle CRM products with their products in the future. Our current principal competitors include:
• enterprise software application vendors including Amdocs Limited, E.piphany, Inc., IBM Corporation, Microsoft Corporation, Oracle
Corporation, PeopleSoft, Inc., which has been acquired by Oracle, SAP AG and Siebel Systems, Inc.;
• packaged CRM software vendors, some of whom offer hosted services, such as BMC Software Corporation, FrontRange Solutions, Inc., Onyx
Software Corp., Pivotal Corporation, which has been acquired by CDC Software Corporation, a subsidiary of chinadotcom corporation, and Sage
Group plc;
• on-demand CRM application service providers such as Siebel Systems, NetSuite, Inc., RightNow Technologies, Inc. and Salesnet, Inc.; and
• enterprise application service providers including British Telecom, IBM and Corio, Inc., which has been acquired by IBM.
We believe the principal competitive factors in our market include the following:
• speed and ease of implementation;
• ease of use and rates of user adoption;
• low total cost of ownership and demonstrable cost-effective benefits for customers;
• product functionality;
• performance, security, scalability, flexibility and reliability of the service;
• ease of integration with existing applications;
• quality of customer support;
• availability and quality of implementation, consulting and training services;
• vendor reputation;
• sales and marketing capabilities of the vendor; and
• financial stability of the vendor.
While some of our competitors offer CRM applications with greater complexity than our service, we believe none of them addresses all of the
limitations of traditional CRM applications adequately. In many cases, we believe CRM applications with greater complexity have a higher total cost of
ownership, take significantly more time to implement and are harder to use than our service. However, many of our competitors and potential competitors
have greater name recognition, longer operating histories and significantly greater resources. They may be able to devote greater resources to the
development, promotion and sale of their products than we can to ours, which could allow them to respond more quickly than we can to new technologies and
changes in customer needs. Additionally, our competitors may offer or develop products or services that are superior to ours or that achieve greater market
acceptance.
Our professional services organization competes with a broad range of large systems integrators, including Accenture Ltd., BearingPoint, Inc. and IBM
as well as smaller independent consulting firms specializing in CRM implementations. We have relationships with many of these consulting companies and
frequently work cooperatively on projects with them, even as we compete for business in other customer engagements.
12