Salesforce.com 2006 Annual Report Download - page 18

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Table of Contents
Available Information
You can obtain copies of our Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other filings with the SEC, and all
amendments to these filings, free of charge from our Web site at http://www.salesforce.com/company/sec-filings.jsp as soon as reasonably practicable
following our filing of any of these reports with the SEC. You can also obtain copies free of charge by contacting our Investor Relations department at the
office address described above.
ITEM 1A. RISK FACTORS
The risks and uncertainties described below are not the only ones facing us. Other events that we do not currently anticipate or that we currently deem
immaterial also may affect our results of operations and financial condition.
Risks Related to Our Business and Industry
If our on-demand application service is not widely accepted, our operating results will be harmed.
We derive substantially all of our revenue from subscriptions to our on-demand application service, and we expect this will continue for the foreseeable
future. As a result, widespread acceptance of our service is critical to our future growth and success. Factors that may affect market acceptance of our service
include:
• reluctance by enterprises to migrate to an on-demand application service;
• a limited number of service offerings and risks associated with developing new service offerings;
• the price and performance of our service;
• the level of customization we can offer;
• the availability, performance and price of competing products and services;
• reluctance by enterprises to trust third parties to store and manage their internal data; and
• adverse publicity about us, our service or the viability, reliability or security of on-demand application services generally from third party
reviews, industry analyst reports and adverse statements made by competitors.
Many of these factors are beyond our control. The inability of our on-demand application service to achieve widespread market acceptance would harm
our business.
Defects or disruptions in our service could diminish demand for our service and subject us to substantial liability.
Because our service is complex and we have incorporated a variety of new computer hardware and software, both developed in-house and acquired
from third party vendors, our service may have errors or defects that users identify after they begin using it that could result in unanticipated downtime for our
subscribers and harm our reputation and our business. Internet-based services frequently contain undetected errors when first introduced or when new versions
or enhancements are released. We have from time to time found defects in our service and new errors in our existing service may be detected in the future. In
addition, our customers may use our service in unanticipated ways that may cause a disruption in service for other customers attempting to access their data.
Since our customers use our service for important aspects of their business, any errors, defects, disruptions in service or other performance problems with our
service could hurt our reputation and may damage our customers' businesses. If that occurs, customers could elect not to renew, or delay or withhold payment
to us, we could lose future sales or customers may make warranty claims against us, which could result in an increase in our provision for doubtful accounts,
an increase in collection cycles for accounts receivable or the expense and risk of litigation.
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