Salesforce.com 2005 Annual Report Download - page 14

Table of Contents
We regularly rotate tapes of customer data out of the facilities and store them in a secure location in the event of data loss at the facilities. Additionally, we
also have an agreement with SunGard Data Systems, a provider of availability services, to provide access to a geographically remote disaster recovery facility
that would provide us with access to hardware, software and Internet connectivity in the event the Web hosting facilities become unavailable. Even with the
disaster recovery arrangements, our service could be interrupted.
We continuously monitor the performance of our service. The monitoring features we have built or licensed include centralized performance consoles,
automated load distribution tools and various self-diagnostic tools and programs.
Customers
As of January 31, 2006, our customer base had grown to approximately 20,500, and we had approximately 399,000 paying subscriptions. As of
January 31, 2005, our customer base was approximately 13,900 and our paying subscriptions were approximately 227,000.
Our revenues are divided among small businesses (companies with fewer than 200 employees), medium-size businesses (200 or more employees and
up to $1 billion in annual revenues), and large businesses (over $1 billion in annual revenues). The number of paying subscriptions at each of our customers
ranges from one to more than 6,000.
None of our customers accounted for more than 5 percent of our revenues in fiscal 2006, 2005 or 2004.
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, telesales and field sales personnel. Our small
business, general business and enterprise account executives and account managers focus their efforts on small, medium-size and large enterprises,
respectively. Sales representatives in our small business group sell to smaller companies, primarily over the phone.
Referral and Indirect Sales
We have a network of partners who refer customer prospects to us and assist us in selling to them. These include consulting firms, other technology
vendors and systems integrators. In return, we typically pay these partners a fee based on the first-year subscription revenue generated by the customers they
refer. We have also started to develop distribution channels for our service.
Marketing
Our marketing strategy is to generate qualified sales leads, build our brand and raise awareness of salesforce.com as a leading provider of on-demand
CRM application services. Our marketing programs include a variety of advertising, events, public relations activities and Web-based campaigns targeted at
key executives and decision makers within businesses.
Our principal marketing initiatives include:
• launch events to publicize our service to existing customers and prospects;
• direct mail and email campaigns;
• participation in, and sponsorship of, user conferences, trade shows and industry events;
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