Salesforce.com 2012 Annual Report Download - page 14

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additional functional areas and business units within the customer organization, and ultimately pursue
enterprise-wide deployments. Our goal is to have our customers renew their subscriptions at the end of
their contractual terms and we run customer success and other programs in an effort to secure renewals
of existing customers.
•Encouraging the development of third-party applications on our cloud computing platforms. Our
Force.com and Heroku cloud computing platform enables existing customers, ISVs and third-party
developers to develop and deliver cloud applications they have built in our multi-tenant environment. It
is a platform on which applications can be created, tested, published, and run. In addition, these
applications can be listed on the AppExchange, our online marketplace of cloud applications, or sold
by ISVs. We believe the ecosystem of cloud developers and ISVs will address the business
requirements of both current and potential customers.
Technology, Development and Operations
We deliver our service as a highly scalable, multi-tenant application. We use commercially available
hardware and a combination of proprietary and commercially available software to provide our service. We have
optimized our services to run on specific databases and operating systems using the tools and platforms best
suited to serve our customers rather than providing software that must be written to different hardware, operating
system and database platforms, or that depends upon a customer’s unique systems environment. Performance,
functional depth and the usability of our service drive our technology decisions and product direction.
Our service treats all customers as logically separate tenants in central applications, databases and other
resources. As a result, we are able to spread the cost of delivering our service across our user base. In addition,
because we do not have to manage thousands of distinct applications with their own business logic and database
schemas, we believe that we can scale our business faster than traditional software vendors. Moreover, we can
focus our resources on building new functionality to deliver to our customer base as a whole rather than on
maintaining an infrastructure to support each of their distinct applications.
Because of our multi-tenant and logically separated architecture, we are able to provide all of our customers
with a service based on a single version of our applications. We are able to upgrade all of our customers at the
same time with each release. As a result, we do not have to maintain multiple versions of our applications.
Our research and development efforts are focused on improving and enhancing the features, functionality
and security of our existing service offerings as well as developing new services. In addition, from time to time
we supplement our internal research and development activities with outside development resources and acquired
technology.
Our customers access our service over the Internet through supported Internet browsers and mobile devices.
We currently serve our customers from third-party data center hosting facilities located in the United States
and other countries.
Customers
We sell to businesses of all sizes. The number of paying subscriptions at each of our customers ranges from
one to hundreds of thousands. None of our customers accounted for more than five percent of our revenues in
fiscal 2012, 2011, or 2010.
Sources of Revenue
We derive our revenues primarily from subscription fees from our customers and support revenues from
customers purchasing additional support beyond the standard support that is included in the basic subscription fee.
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