Salesforce.com 2004 Annual Report Download - page 4

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Table of Contents
FORWARD-LOOKING INFORMATION
This Annual Report, including the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations" ("MD&A")
contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
Forward-looking statements consist of, among other things, trend analyses, statements regarding future events, future financial performance, our plan to
build our business, our plans to obtain additional business continuity services, additional data center capacity and a separate development and test data
center and related expenses, our anticipated growth, trends in our business, the effect of foreign currency exchange rate and interest rate fluctuations on our
financial results, the potential impact of current or any future litigation, the potential availability of tax assets in the future and related matters, the impact of
the new accounting pronouncement to expense stock options and the sufficiency of our capital resources, all of which are based on current expectations,
estimates, and forecasts, and the beliefs and assumptions of our management. Words such as "expects," "anticipates," "projects," "intends," "plans,"
"believes," "estimates," variations of such words, and similar expressions are also intended to identify such forward-looking statements. These forward-
looking statements are subject to risks, uncertainties and assumptions that are difficult to predict. Therefore, actual results may differ materially and
adversely from those expressed in any forward-looking statements. Readers are directed to risks and uncertainties identified below, under "Risk Factors
Which May Impact Future Operating Results" and elsewhere in this report, for factors that may cause actual results to be different than those expressed in
these forward-looking statements. Except as required by law, we undertake no obligation to revise or update publicly any forward-looking statements for any
reason.
PART I
ITEM 1. BUSINESS
Overview
We were incorporated in Delaware in February 1999. Our principal executive offices are located in San Francisco, California and our website address is
www.salesforce.com. Our office address is The Landmark @ One Market, Suite 300, San Francisco, California 94105.
We are the leading provider, based on market share, of application services that allow organizations to easily share customer information on demand,
according to a March 2004 report by Forrester Research, Inc. We provide a comprehensive customer relationship management, or CRM, service to businesses
of all sizes and industries worldwide. By designing and developing our service to be a low-cost, easy-to-use application that is delivered through a standard
Web browser, we substantially reduce many of the traditional expenses and complexities of enterprise software implementations. As a result, our customers
incur less risk and lower upfront costs. Our service helps customers more effectively manage and share information about critical operations including: sales
force automation; customer service and support; marketing automation; document management; analytics; and custom application development. We market
our service to businesses on a subscription basis, primarily through our direct sales efforts and also indirectly through partners. As of January 31, 2005, our
customer base had grown to approximately 13,900, and we had approximately 227,000 paying subscriptions in over 70 countries. We define paying
subscriptions as unique user accounts, purchased by customers for use by their employees and other customer-authorized users, that have not been suspended
for non-payment and for which we are recognizing subscription revenue.
Industry Background
The Enterprise Application Software Market
Advances in computing and communications technology have enabled businesses to automate and improve their basic business processes. Many
businesses have purchased, built and deployed a wide range of enterprise
1