Salesforce.com 2012 Annual Report Download - page 38

additional competitors in our market and improved product offerings by existing and new competitors; the
location of new data centers; third-party developers’ willingness to develop applications on our platforms; and
general economic conditions which could affect our customers’ ability and willingness to purchase our services,
delay the customers’ purchasing decision or affect renewal rates.
To address these factors, we will need to, among other things, continue to add substantial numbers of paying
subscriptions, upgrade our customers to fully featured versions such as our Unlimited Edition or arrangements
such as a social enterprise license agreement, provide high quality technical support to our customers and
encourage the development of third-party applications on our platforms. Our plans to invest for future growth
include the continuation of the expansion of our data center capacity. We also plan to continue to hire additional
personnel, particularly in direct sales, other customer-related areas and research and development. As part of our
growth plans, we intend to continue to focus on retaining customers at the time of renewal.
Additionally, we plan to: expand our domestic and international selling and marketing activities; continue to
develop our brands; add additional distribution channels; increase our research and development activities to
upgrade and extend our service offerings; develop new services and technologies and integrate acquired
technologies; and add to our global infrastructure to support our growth. We also regularly evaluate acquisitions
or investment opportunities in complementary businesses, joint ventures, services and technologies, and
intellectual property rights in an effort to expand our service offerings. We expect to continue to make such
investments and acquisitions in the future. As such, we plan to reinvest a significant portion of our incremental
revenue in fiscal 2013 to grow our business and continue our leadership role in the cloud computing industry.
During fiscal 2012, we acquired several businesses and technologies to strengthen and extend our service
offerings. In May 2011, we acquired Radian6 for a total purchase consideration of approximately $336.6 million,
net of cash acquired. Radian6 is a cloud application vendor that provides customers with social media
monitoring, measurement and engagement solutions. We acquired Radian6 for its developed technology,
assembled workforce, expected synergies and expanded market opportunities when integrating Radian6’s social
solution technology with our current product offerings. In September 2011, we acquired Assistly for a total
purchase consideration of approximately $58.7 million. Assistly is a cloud-based provider of customer service
solutions. We acquired Assistly for its developed help desk application technology in order to expand our
customer service market opportunities in the small and emerging business market. In order to expand our mobile
and social consulting services, in December 2011, we acquired Model Metrics, a cloud computing professional
services company, for a total purchase consideration of approximately $66.7 million.
We expect marketing and sales costs, which were 52 percent of our total revenues for fiscal 2012 and 48
percent for the same period a year ago, to continue to represent a substantial portion of total revenues in the
future as we seek to add and manage more paying subscribers, and build greater brand awareness.
Fiscal Year
Our fiscal year ends on January 31. References to fiscal 2012, for example, refer to the fiscal year ended
January 31, 2012.
34