Salesforce.com 2008 Annual Report Download - page 7

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Table of Contents
infrastructure. These newly developed applications, which are hosted and run on our infrastructure, can then be used for internal operations or sold to third
parties. We also offer the AppExchange, an online directory for SaaS applications, where customers can browse, test-drive and install applications from
salesforce.com and our partners. Since we introduced the AppExchange directory in 2006, more than 800 applications developed mostly by our partners have
been posted to the directory.
Substantially all of our subscription and support revenue comes from subscriptions to our core CRM application services, all of which include the
customization benefits of the Force.com platform. Customers can also build their own application services on the Force.com platform, or install those built on
Force.com by partners from the AppExchange. In order for customers to install and run custom applications, whether built by themselves or by our partners,
they must be a subscriber to our service.
As of January 31, 2009, our customer base had grown to approximately 55,400 worldwide. We provide our service to organizations through our
proprietary, scalable, and secure enterprise cloud computing, multi-tenant application architecture, which allows us to serve large numbers of customers cost-
effectively.
By subscribing to our service, our customers do not have to make large and potentially risky upfront investments in software, hardware, implementation
services and IT staff as they would with traditional software solutions. We believe that our service enables businesses to rapidly achieve the benefits of higher
productivity, and lower their total cost of ownership for their business application.
Key advantages of our solution include:
• Secure, scalable and reliable delivery platform. The delivery platform for our service has been designed to provide our customers with high
levels of reliability, performance, and security. We have built, and continue to invest in, a comprehensive security infrastructure, including
firewalls, intrusion detection systems, and encryption for transmissions over the Internet, which we monitor and test on a regular basis. In
addition, all of our customers' data is replicated in near real-time to help protect the data and ensure service continuity in the event of a major
disaster. We built and maintain a multi-tenant application architecture that has been designed to enable our service to scale securely, reliably, and
cost-effectively. Our multi-tenant application architecture maintains the integrity and separation of customer data while still permitting all
customers to use the same application functionality simultaneously. Our architecture also enables customers to segment access privileges across
their user base.
• Rapid deployment. Our service can be deployed rapidly since our customers do not have to spend time procuring, installing or maintaining the
servers, storage, networking equipment, security products, or other infrastructure hardware and software necessary to ensure a scalable and
reliable service. We believe the average time that a customer requires to deploy our service is significantly shorter than typical, traditional
enterprise software deployments. We also offer consulting, training services, and online resources to assist customers in rapidly deploying and
optimizing their use of our service.
• Ease of integration and development. Our platform is designed to enable IT professionals to integrate our service with existing applications
quickly and seamlessly. Our Force.com platform provides a set of application programming interfaces, or APIs, that enable customers and
independent developers to both integrate our service with existing third-party, custom, and legacy applications and write their own application
services that integrate with our service. For example, many of our customers use the Force.com API to move customer-related data from custom-
developed and legacy applications into our service on a periodic basis to provide greater visibility into their activities. Other customers and
partners have, for example, developed their own talent management solutions and procurement solutions on the Force.com platform.
• Lower total cost of ownership. We enable customers to achieve significant upfront savings relative to the traditional enterprise software model.
Customers benefit from the predictability of their future costs
4