Salesforce.com 2007 Annual Report Download - page 22

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Table of Contents
historically have been packaged CRM software vendors, but who also have directly competitive on-demand CRM application services offerings.
Our professional services organization competes with a broad range of large systems integrators, including Accenture Ltd., BearingPoint, Inc., Deloitte
Consulting and IBM Corporation as well as smaller independent consulting firms specializing in CRM implementations. We have close 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.
Many of our potential competitors enjoy substantial competitive advantages, such as greater name recognition, longer operating histories and larger
marketing budgets, as well as substantially greater financial, technical and other resources. In addition, many of our potential competitors have established
marketing relationships and access to larger customer bases, and have major distribution agreements with consultants, system integrators and resellers.
As a result, our competitors may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, standards
or customer requirements. Furthermore, because of these advantages, even if our service is more effective than the products that our competitors offer,
potential customers might accept competitive products and services in lieu of purchasing our service. For all of these reasons, we may not be able to compete
successfully against our current and future competitors.
Our quarterly results can fluctuate and if we fail to meet the expectations of analysts or investors, our stock price and the value of your investment
could decline substantially.
Our quarterly operating results are likely to fluctuate, and if we fail to meet or exceed the expectations of securities analysts or investors, the trading
price of our common stock could decline. Moreover, our stock price may be based on expectations of our future performance that may be unrealistic or that
may not be met. Some of the important factors that could cause our revenues and operating results to fluctuate from quarter to quarter include:
• the amount and timing of operating costs and capital expenditures related to the operations and expansion of our business;
• our ability to retain and increase sales to existing customers, attract new customers and satisfy our customers' requirements;
• the renewal rates for our service;
• changes in our pricing policies whether initiated by us or as a result of intense competition;
• the cost, timing and management effort for the introduction of new features to our service;
• the rate of expansion and productivity of our sales force;
• the length of the sales cycle for our service;
• new product and service introductions by our competitors;
• our success in selling our service to large enterprises;
• variations in the revenue mix of editions of our service;
• technical difficulties or interruptions in our service;
• expenses related to increasing our data center capacity and expanding our data centers domestically and internationally;
• changes in foreign currency exchange rates;
• changes in the effective tax rates;
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